State Government
5:02 pm
Fri March 14, 2014

Extreme Energy Demand Has State Lawmakers Exploring Rate Caps

A state house committee wants to take a closer look at extreme electricity rates that left consumers shocked this winter. 

High energy demand during extreme cold spikes in January and February caused huge spikes in electricity costs across Pennsylvania. Consumers who agreed to pay variable electric rates are now receiving bills and are finding the numbers hard to believe. According to Rep. Peter Daley (D-Fayette/Washington) who co-chairs the Consumer Affairs Committee, some citizens saw rates far beyond their monthly income.

“I mean I’ve talked to some seniors that went from 300 dollars to almost 2,000 dollars - 2,500 - and when you’re getting 700, 800 dollars a month in income, I mean that’s a non-starter that’s not going to work,” said Daley.

The Consumer Affairs Committee will hold a hearing March 20 to examine the issue and discuss possible remedies with utility officials, representatives from the state Public Utilities Commission, the state Office of Consumer Advocate, and private citizens.

Daley hopes to arrange for caps on variable rates.

“We probably need to put in a trigger mechanism that if consumption hits a certain level that there can’t be this tremendous spike that can occur,” said Daley, “because certain people, people on fixed incomes, will not be to even pay those bills let alone pay for their other costs of living.”

The variable rate contract system is relatively new to the commonwealth and Daley feels that similar regulation might be needed to increase fairness for the consumer. According to Daley, some aspects of electricity production and distribution already have similar caps in place and he hopes to ensure there aren’t any vital gaps left open.

The committee has also begun investigating whether any unfair business practices may have caused the rate spikes.

“We need to look at the suppliers, which are not the generators and see if there was any sort of gouging,” said Daley, “I know the Attorney General, she’s looking into it right now, and we’re working very closely with her office to help with that.”  

Daley says there is no evidence of wrongdoing.