June 4, 2014 —
HARRISBURG, PA — Electricity rates for hundreds of thousands of electricity consumers spiked this winter as record cold sent electricity prices skyrocketing, especially for consumers with variable rate contracts. Some consumers saw their bills jump by as much as 400%, and many of those customers were not aware they had contracts with variable rates.
The Pennsylvania Public Utility Commission (PUC) is taking steps to try to minimize the impacts of spikes in the future. On May 27, the Independent Regulatory Review Commission (IRRC) approved two changes to regulations intended to deal with the issue.
The changes would make the contracts easier to understand and provide more information about electricity suppliers. The changes also would allow customers to change suppliers more quickly, thus limiting the amount of time the consumer would be stuck paying higher bills. Previously the PUC had voted to approve the changes.The vote by the IRRC gives the changes the force of law.
The PUC has also made changes to its website, PAPowerSwitch.com that, according to PUC chairman Robert F. Powelson “will help customers assess their risk tolerance, which in turn will help them decide whether to choose a variable rate, which can be riskier, or a fixed rate, which is often less risky.”
Some lawmakers think the changes don’t go far enough. Rep. Bob Godshall said that only a cap on the monthly increase in price is going to stop gouging by some electricity suppliers. In a press release issued on May 30, Godshall explained that deregulation of the electric market 10 years ago led to as many as 355 providers, and “Many providers are little more than marketing operations that offer low introductory rates to lure consumers away from their local default supplier, then collect handsomely when the low rate expires.”
Godshall, who is chairman of the House Consumer Affairs Committee, introduced legislation in March that would put a 30% cap on the monthly increase of rate payments. His legislation, which may get a vote by the full House in June, would also require the PUC to post current and historic electric rates on the PUC website.
State Sen. Lisa Boscola has also introduced a bill to address the issue. Her legislation would order that consumers be notified when the rates are going to increase by more than 20%, to shorten the period for switching providers and to mandate consumer alerts, such as 24-hour notice for residential customers when variable rates go up by more than 200%, as well as requiring a real-time website for electric rates and person-to-person interaction for shoppers looking at variable-rate plans.
Boscola said that while she approves of the changes adopted by the IRRC and the PUC, there are further changes that she would like to see, and she has introduced them in a senate bill. Her bill would mandate the consumer be given access to historical pricing information and that suppliers “provide a separate contract summary with a full-disclosure statement to ensure that key terms and conditions are highlighted in a uniform, consistent way.”
In a press release after the PUC vote, Boscola said, “I applaud the PUC for responding to the public outcry on these issues. In this case, it underscores what can be accomplished when an active and involved citizenry speaks out.”