Stopping the Electric-Powered train wreck

    The price of oil is now over $80 a barrel.  But, the rising price of gasoline is not the only challenge facing us on the energy horizon.  In fact, it may not even be the biggest challenge to Pennsylvania’s economy and the quality of life of our citizens.

     Beginning in 2010, electric rate caps will expire.  Power companies will be free to charge customers the “market price” for electricity.  Analysts predict electric bills will increase by 50%.  When rate caps were lifted in Maryland, the price of electricity increased 72%.  In Delaware, electric bills went up 59% once rate caps came off.

     When rate caps expired in Maryland, Delaware, Illinois, Rhode Island, Maine, and Connecticut, their state legislators suddenly had to deal with an electric “price crisis” and widespread public outrage.  Drastic measures were necessary to deal with the “free market” fall-out.  What happened in other states can – and will – happen in Pennsylvania.  We must ensure that consumers are protected before the rate caps expire, rather than after the damage has already been done.

     In the months ahead, the State Senate will work to enact various parts of the Governor’s “Energy Independence” proposal.  I will also be proposing that we move beyond basic utility restructuring and ensure reasonable and stable rates, least-cost procurement, and system reliability that includes energy resource diversification, distributed generation, and load management.

     While it’s important that we encourage solar and wind power and provide tax credits for clean energy and bio-fuel plants and advanced energy technologies, we must not add to the heavy burden of Pennsylvanians’ electric bills.  And we cannot pretend that “phony competition” and “self-dealing” and “market abuse” is what anyone envisioned when Pennsylvania started down the path of de-regulation 10 years ago.

     I believe, as does the Pennsylvania Consumer Advocate, that it is better for the Legislature to take positive, proactive steps to protect consumers from greater price volatility and higher prices before the rate caps expire, rather than after.

     Most importantly, I want to protect all consumers – including residential, commercial and industrial customers - from the massive rate increases that occurred in other states when electric rate caps expired.  If we act boldly, we can work together to help provide all Pennsylvanians with cleaner, cheaper and more sustainable sources of energy for years and years to come.  But, if we just cross our fingers and take a “wait-and-see” attitude until the electric rate caps come off, we will not be able to prevent the “economic train wreck” that is not just heading our way, but also picking up speed.

 # # #