Utility Rate Increases A Senate power play

Posted: September 29, 2008

With Pennsylvania electricity consumers facing record rate increases in the next few years, what's the state Senate doing guarding the bottom line of Peco Energy Co. and other utilities?

Having delayed action for months on a House-approved energy-savings measure, the Senate last week suddenly gutted key consumer protections in the bill. Utilities will be the winners; consumers and the state's business climate the losers.

The Senate approach would leave consumers even more vulnerable to looming double-digit rate increases. The hikes starting in 2010 are due to the expiration of rate caps under deregulation.

Energy-savings measures voted by the House were meant to ease the crunch by encouraging conservation - consumers' best and maybe only defense against higher costs.

Rather than aid customers by mandating conservation tools such as "smart meters" to gauge electricity use, a Senate committee Tuesday offered only lip service to conservation.

The House ordered utilities to phase in smart meters over 10 years and cover the cost through rates. These meters have been piloted in the Lehigh Valley, so there's no question they can help consumers.

But proposals emerging from a committee chaired by Sen. Robert M. "Tommy" Tomlinson (R., Bucks) made the meter switch voluntary, and customers would have to request and pay for installation.

Likely result: Few customers will benefit from this cutting-edge technology, while utilities rake in ever-higher profits from kilowatt sales.

That would make it far less likely the state would achieve its overall targets for reducing electricity use. Both House and Senate bills set the targets at 2.5 percent by 2013.

These conservation goals are meant to help consumers, slow climate change, and reduce pollution - while sparing utilities the staggering cost of adding new power plants to meet ever-growing demand.

Even though utilities would have to create programs to encourage conservation under the Senate proposal, the penalty for failing to meet conservation goals would be meager fines that are a fraction of the revenue utilities would forgo if consumers actually used less power.

The Senate is offering a plan that's "unfriendly to consumers and creates disincentives for utilities to conserve," says Jan Jarrett, head of the PennFuture environmental organization. PennFuture is right to call for the Senate to remove the "crippling amendments" from the House bill.

Senate leaders need to do just that, and put the state back on track to reduce electricity consumption.

The General Assembly may yet offer utility customers short-term relief by ordering that higher electricity rates be phased in. But that's no substitute for the aggressive conservation program proposed by a bipartisan majority in the Democratic-led House, and favored by Gov. Rendell.

Rather than doing the utility companies' bidding, Republican Senate leaders need to put more energy into reaching agreement on a true conservation strategy.

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