BOSCOLA SAYS PENNSYLVANIA SHOULD “PULL THE PLUG”

ON ELECTRIC DE-REGULATION 

Wants power companies to pay
“de-regulation dividend”
owed to Pennsylvania ratepayers
 

     HARRISBURG (JAN 24) – State Senator Lisa Boscola began the 2008 legislative session by calling on her colleagues to “pull the plug on electric de-regulation.”
 

     “After 10 years of waiting for electric de-regulation, we’re still waiting to see real competition, more choices and lower electric prices,” Boscola said.  “Thanks to de-regulation, electric customers will only see record rate increases, instead of the lower prices they were promised.  On the other hand, corporate shareholders won’t have to wait long to see huge profits and record dividends.” 

     During the 10 years following the enactment of de-regulation, Pennsylvania ratepayers paid $12 billion in “transition costs” to state electric companies – to relieve them of public debt, to allow them to become more competitive in a “free market,” and to invest in building new generation, Boscola said.

 
     “Thanks to $12 billion of ratepayers’ money, Pennsylvania power companies bought up power plants in other states and even in other countries,” Boscola said.  “These same utility companies have become huge energy conglomerates and holding companies. They are now global companies. 

“Our state-regulated utility companies have grown into global energy conglomerates and huge, multi-national holding companies.  They no longer exist to serve you and I with affordable and reliable electricity.  They only exist to make as much profit as they can possibly get away with.” 

     That’s not “real competition,” she said.  It’s not what Pennsylvanians paid $12 billion for. 

     “Despite all of the technological advances and the blessing of State and Federal law, the competitive market that was promised to the people of Pennsylvania is nowhere in sight,” Boscola said.  “That promise has not been kept – a promise that all of the stakeholders pledged to abide by 10 years ago.  I don’t want to hear anymore of this whining that it was forced upon the poor power companies.  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.” 

     $12 billion represents a significant investment by ratepayers – a huge down payment on the benefits they were promised under de-regulation: more choices, more competition, and lower electric prices, she said. 

“You’d have a better chance right now of seeing a UFO in Pennsylvania than you’d have finding a real competitive market for electricity somewhere, anywhere in our Commonwealth,” Boscola said. 

     In fact, even under rate caps, some of Pennsylvania’s largest power companies are making record profits.  Their profits are as high or higher than they’ve been in decades, she said.  They’re making more money and more profits than at any time in history. 

     “If you believe this happened just by accident, I have a bridge in my Senate District I want to sell you,” Boscola said.  “Today we’re being told that our $12-billion investment in de-regulation guaranteed just two things: record profits for electric companies and record rate increases for electric customers.” 

     That may be the reality when rate caps expire in 2010, she said, but that’s not what electric customers agreed to – and paid $12 billion for. 

     “Make no mistake, power companies have made record profits these past 10 years and their corporate stockholders have been rewarded with record dividends,” Boscola said.  “Now it’s time to give ratepayers the ‘de-regulation dividend’ they are due, because they upheld their end of the bargain and played by the rules everyone agreed to in 1996.” 

     The “de-regulation dividend” that should be immediately refunded directly to Pennsylvania ratepayers could be as high as $6 billion, she said. 

     “I’m not just looking at stranded costs, I’m looking at the bigger picture,” Boscola said.  “I’m looking at record profits, at market manipulation, and at cartel pricing schemes that allow each company to still enjoy the advantage of being a monopoly power player that can squash any real competition.” 

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