HARRISBURG, September 12, 2008 –State Sen. Jim Ferlo (D-Pittsburgh) is introducing legislation aimed at reducing the impact of the rate shock expected to hit residential and small business customers once rate caps come off electric prices at the ends of 2009 and 2010.

Senator Ferlo’s legislation will:

• Require a portfolio of contract lengths so that electric companies must enter into short, medium and long term contracts and purchase for “least cost” electricity;
  
  
• Ban winter terminations in nearly all cases to protect customers when they are the most vulnerable;
  
  
• Require tougher notification requirements before a utility can shut off a resident’s power;
  
  
• Allow municipalities to aggregate their residential and small commercial rate classes for the purpose of purchasing electricity in bulk at lower prices;
  
  
• Call attention to pricing models that further increase electric rates and ask Congress and the Federal Energy Regulatory Commission to review these policies for the sake of consumers.

“We need to take strong steps to protect consumers from being gouged,” said Senator Ferlo.  “While generation companies are predicting record profits, I expect my constituents will see their pocketbooks stretched to their limits.”  

Residential and small business electric customers are expecting to see up to 70% increases in their electric prices overnight once rate caps come off.  At the same time, electric power companies, which are already collecting record profits, are expecting to see their profits soar.

Senator said his goals are to design an electric market in Pennsylvania that provides effective consumer protection laws, maximizes the buying power of residential electric customers through aggregation, and holds utility companies to the highest standards for rate making.

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