Floor Remarks - January 16, 2008

Senator Lisa M. Boscola

 Rate Caps

            Thank you, Madam President. 

For the past 10 years, the people of Pennsylvania have been paying for the promise and the benefits of a de-regulated electric market. 

This “free market” appealed to everyone’s common sense – more choices, more competition and lower electric bills because everyone would finally be able to pick up the phone to “shop around and get a better deal.” 

At that time, electric customers were at the mercy of a legally protected monopoly . . . and you only had 2 choices: “pay your bill or we’ll cut off your power.” 

     A lot has happened in the past 10 years. 

A whole “new” energy debate is now taking place in our Commonwealth and across our country. 

But, 1 very important thing has NOT happened. 

Despite all of the technological advances and the blessing of State AND Federal law . . . the competitive, “free” market that was promised to the people of Pennsylvania – 1 that would virtually guarantee some “blue-light specials” for smart people who could find them (and if you clip coupons, you know what I mean) . . . 

That promise – that ALL of the stakeholders pledged 10 years ago . . . and I don’t want to hear anymore of this whining that it was “FORCED UPON” the poor power companies . . . has not been kept. 

They were at the table, they were part of the process, and they did everything they could to cover their assets . . . if you know what I mean. 

There is NO competitive market in Pennsylvania today. 

It has NOT happened. 

In fact, it’s nowhere in sight. 

You have a better chance right now . . . of seeing a UFO in Pennsylvania than you’d have trying to find a real competitive market for electricity somewhere . . . ANYWHERE! . . . in our Commonwealth! 

            Once again, ratepayers are at the mercy of their electric company.  But, this time the stakes are much higher. 

            Under state law, regulated utilities were guaranteed a “just and reasonable” return that guaranteed reasonably higher rates in return for the guarantee of building more power generation. 

More power plants equaled more supply to meet growing demand. 

            But, when 5 of Pennsylvania’s largest power companies – affecting 85 percent of all Pennsylvanians – will no longer be regulated, beginning in 2010, the ONLY guarantee is that your monthly electric bill is going to get higher and higher . . . before you even know it. 

           For the past 10 years, the people of Pennsylvania paid and paid . . . and did their part . . . 

          We paid 12 BILLION DOLLARS in “stranded costs” so that power companies in Pennsylvania would not be so mired in public debt that they would be less competitive and less able to finance new generation projects . . .

          So THEY would not be at the mercy of out-of-state competitors in a free market . . . competitors like ENRON, for example . . . 

          And what have we received in return? 

          If your monthly electric bill has gone DOWN lately . . . raise your hand! 

         Anyone? 

         (Neither has mine!) 

         BUT, in these past 10 years . . . after we gave them 12 BILLION DOLLARS . . . these same “utility companies” have become huge energy conglomerates . . . and holding companies. 

        They are now global companies. 

        Thanks to our 12 BILLION DOLLARS . . . Pennsylvania power companies bought up power plants in other states and even in other countries. 

        Their stock went up.  Shareholders were happy. 

        And we kept waiting for that day when we could finally “get government out of the way,” “shop around for a better deal,” and make competing power companies FIGHT for our business!

        Like that 1 ad on TV . . . that Internet ad where the guy in the sweater goes to mortgage.com instead of his long-time local banker . . . then tells the big-shot banker that he’s personally “pulling for him” and hopes he’ll be able to compete with all of these other mortgage companies and give him the lowest possible price – and keep his business. 

        Well, guess what . . . ?  It’s still a game of Monopoly. 

        Sure, some of them divested the generation side of the utility from the transmission and distribution side . . . 

        But, forming a “separate” . . . “but still closely related” company . . . and both companies being under the same “umbrella” of the parent company . . . 

        It makes you wonder how much they really wanted to “compete” against each other. 

        But, at least we know why there is no “competition.” 

        Why we have no choice and no opportunity to go out there and “shop around” for lower prices. 

        The people of Pennsylvania paid 12 BILLION DOLLARS and they deserve something in return. 

         Something better than corporate excuses . . . and something a lot better than a monthly electric bill that’s so high that you think it must be wrong . . . so you call the 800 number listed there on your bill . . . and you hear a recording that says, “Welcome to de-regulation!  Enjoy the free market while you can afford it!”

         We deserve the promise of choice and the benefits of true competition.

         We all deserve it . . . because we ALL paid for it.

         We agreed to it . . . “fair and square” and we upheld OUR end of the bargain. 

         Today, some of these same companies are making RECORD profits. 

         Their profits are as high – or higher than they’ve been in DECADES! 

         More money and more profits than at any time in history. 

         So, 10 years later . . . we stand here today . . .

        And we are being told that OUR 12 BILLION DOLLARS really just guaranteed 2 things are going to happen under full de-regulation:

        RECORD profits . . . and . . . 

        RECORD rate increases. 

        If you believe that this happened “just by accident,” I have a bridge in my Senate District that I want to sell you! 

       That’s the truth . . . you know it and I know it. 

       Higher gas prices.

       Higher heating oil prices. 

       Higher food prices. 

       Higher medical bills. 

       And the higher cost “of everything” doesn’t leave much room in your household budget to afford a monthly electric bill that’s 50-percent higher than last month’s bill. 

       That’s what the power companies call “de-regulation” in Pennsylvania.

       That’s what the people of Pennsylvania get in return for their 12-BILLION-DOLLAR down payment for electric choice and electric competition. 

       And that’s why we need to PULL THE PLUG on de-regulation. 

       10 years ago, Congress and this State Legislature and more than a dozen other states voted on “WHAT IF?” 

       WHAT IF we could give the people of Pennsylvania LOWER electric rates by opening up our Commonwealth to “real” competition? 

      WHAT IF customers could choose for themselves, instead of being under the thumb of 1 giant monopoly of a utility company? 

     Today, 10 years later . . . we have the chance to vote on WHAT IS. 

      Today, there is NO real, competitive market for electric customers anywhere in Pennsylvania.

      There is no choice, there is no “shopping around,” there is no “better deal.”

      There is only “pay your bill or sit in the dark.”

      Ratepayers are once again at the mercy of huge energy conglomerates.

     That’s WHAT IT IS today.

      That’s what we get for 12 BILLION DOLLARS.

      An empty promise . . . and false hope . . .

 A consumer rip-off . . .

      Because our state-regulated utility companies have grown into global energy conglomerates and huge, multi-national holding companies that do not exist anymore to serve you and I with affordable and reliable electricity . . .

      They exist to make the most profits they can possibly get away with.

      It’s time that consumers get the rate relief they were promised.

      They deserve a “dividend,” too.

      I look forward to working with everyone in this chamber in the months ahead to make sure they get what they paid for.

      Thank you, Madam President.

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