At issue is "excess capacity." The bill would require the PUC to disallow construction costs for generating capacity deemed to be in excess of realistic energy needs.
Pennsylvania utilities currently can generate 32 percent more power than is needed during periods of peak demand. (The electric association recently changed its way of calculating that figure and now says the excess is 24 percent.)
While a certain amount of excess generating capacity is needed as a margin of safety, many experts argue that the state has far more than it will need into the foreseeable future. Demand isn't expected to grow, so the surplus will increase with the addition of a number of planned cogeneration projects and if PE's second reactor at Limerick and reactors at Duquesne Power's Perry and Beaver Valley plants are completed.
The PUC bill - stalled in a House-Senate conference committee - is similar to that enacted by many other states. It would make Pennsylvania utilities more accountable for their management decisions and would ensure that ratepayers would not be required to shoulder the financial burden that properly should be borne by utility investors.
As the reform bill sits in conference, the PUC is about to vote on a 14 percent rate increase request sought by PE. If approved, the increase will give the company money to continue construction of Unit 2 at Limerick. The PUC informally has voted 2-1 to approve PE's request. The formal PUC vote is scheduled for Thursday. That increase would be cut by about one-third, however, if the PUC bill were enacted. There is still time - admittedly very little time - to vote on the measure and sign it into law before Thursday.
Ironically, the need for utility reform became a major issue during the primary election. The legislators and Gov. Thornburgh have a chance to act. If they sit on their hands, utility customers across the state will be the losers.
