BOSCOLA WANTS PUC TO HOLD PUBLIC HEARING IN BETHLEHEM ON PPL PLAN TO INCREASE RATES

            HARRISBURG, March 13 ‑ State Senator Lisa Boscola today urged the Public Utility Commission to listen to the voices of local residents before voting on a controversial plan by PPL to increase customers’ electric rates.

            PPL wants approval from the PUC to start charging their customers higher “deregulated” electric rates in mid‑2008.  Under state law, electric rates for PPL are “capped” and cannot be deregulated until 2010.

            “Greed, greed, greed,” Boscola said.  “When electric deregulation was enacted in Pennsylvania, PPL agreed to be bound by rate caps under the law.  They also consented to a PUC order at that time to keep their electric rates capped until 2010.  Now they suddenly want to break the law and violate that order so they can start charging their customers 50% higher rates in 2008. That is the very definition of corporate greed.”

            Boscola is leading the fight in Pennsylvania to extend rate caps for an additional two years to give the Legislature time to prevent the “rate shock” that occurred in surrounding states when electric prices were fully deregulated.  In recent years, residents of Ohio, Maryland, Delaware and Illinois saw their monthly electric bills increase between 59% and 85% under deregulation.  In fact, some customers saw their bills double, she said.

            “Deregulation was designed to create competition that would give customers more choices and lead to lower electric bills,” Boscola said.  “That has not happened in any other state that deregulated ‑ and it’s clearly not going to happen in Pennsylvania.” 

            Instead of letting a competitive market drive down electric prices, the energy companies formed regional cartels that actually increased the price of electricity by 20%.  These regional price‑fixing schemes also guaranteed that each company would be able to charge customers the highest so‑called “market price” for electricity even if they bought or generated that power for a mere fraction of that cost, she said.

            “We have nuclear power plants that can generate electricity for one or two cents per kilowatt hour ‑ and that’s very cheap today,” Boscola said.  “But, instead of that low cost being passed onto ratepayers, energy companies can turn around and charge their customers ten cents per kilowatt hour for that same power, which is about what it costs gas‑fired plants to produce. That doesn’t sound like competition to me ‑ it sounds like they are ripping people off!”

            Deregulation was designed to move these formerly regulated utility companies from being monopolies to a free market where they would have to compete for customers by offering more choices and cheaper prices, she said.

            During this transition, electric companies received $12 billion from ratepayers to shed their public debt and enter a competitive market of buying and selling power.  Electric customers ‑ in return for the $12 billion in “stranded costs” they paid as part of their monthly bill ‑ were guaranteed that rates would be capped for a period of ten years.

            “Both Pennsylvania’s deregulation act and the PUC order issued to PPL are consistent and clear ‑ PPL’s electric rates are capped until 2010,” Boscola said.  “There are provisions in the law to allow energy companies to petition the PUC for emergency relief ‑ to prevent a company from going bankrupt and no longer being able to serve their customers, for instance.  But, PPL is making record profits ‑ the highest in company history.”

            PPL’s corporate lawyers think they see a loophole in our deregulation statute the size of an electrical outlet, she said, and they’re trying to drive a Mack truck through it to make more money. 

            “PPL is pretending that their plan to raise their rates in June of 2008 is a ‘new service’ to ‘benefit’ their customers,” Boscola said.  “Rate caps cannot be applied to new, competitive services under deregulation, whether they are applied to all of their customers or voluntarily chosen by some their customers.  They want to increase your electric bill ‑ plus add another new charge on top of that ‑ and they call that a service?  It’s an insult to the intelligence of hard‑working people who are already struggling to pay their current electric bill.  If they really want to help their customers afford to keep their lights on, they should lower their rates.  That would be a real service, instead of some phony scam to grab more cash as fast as they can.”

(PLEASE SEE THE FULL TEXT OF SENATOR BOSCOLA’S LETTER TO PUC CHAIRMAN HOLLAND BELOW)

March 13, 2008

Honorable Wendell Holland
Chairman
Pennsylvania Public Utility Commission
Commonwealth Keystone Building
3rd Floor ‑ North
Harrisburg, PA 17105‑3265
VIA MESSENGER

Re: P‑2008‑2021776

Dear Chairman Holland: 

In light of all of the circumstances surrounding the issue of electric rate deregulation, I am requesting that the Public Utility Commission hold an additional public input hearing on the above filing in Bethlehem in my legislative district.

I know that the Commission has already heard from the various parties that intervened in this case.   However, it is my duty to allow the voices of electric customers in my district to be heard from, as well.

The outcome of the Commission’s Order regarding this settlement could have far‑reaching economic implications for these working families ‑ and I believe they actually have more at stake in this proceeding than any of the other parties.

Again, I believe exigent circumstances exist that would warrant my request.  Thank you for your consideration.

Sincerely,

LISA M. BOSCOLA
State Senator ‑ 18th District