HARRISBURG, September 17, 2008 - As I said it would more than 10 years ago, electric deregulation has failed.  Pennsylvanian’s are now faced with astronomical rate increases.  A recent Penn State study projects that deregulation could cost the Commonwealth as many as 67,000 jobs, and will increase residential rates up to 70%, perhaps more.

These impending utility rate increases and the prospect of thousands of Pennsylvanians getting their electric service shut off or losing their jobs, the legislature needs to act and aggressively take action to protect families.  In an already unstable and recessing economy, these rising electric costs could ultimately cripple the economy and break the backs of hard-working Pennsylvania families.

Sadly, but not surprisingly, much of these rate hikes can be attributed to electric generating companies that are more interested in profiteering than providing service at a reasonable cost to their customers.  In its 2007 financial statement, PPL Company, which operates in central and eastern Pennsylvania, boasted that its corporate earnings would nearly double to $3.3 billion by 2010.  The report added that the deregulated marketplace would enable them to produce electricity at a cost of $16 per megawatt-hour -- yet sell it to their customers at up to $91.42 per megawatt-hour.

This practice of price gouging has to stop. Unless we act soon, the utility shut-off rate, which has already gone up 37 percent compared to last year, will victimize thousands of additional families across the state.

Much of the blame for this deregulated mess we are now facing rests squarely with deregulation and the electric competition zealots who assured us that a bold and competitive new market would actually lower people’s electric bills.  No such market place has developed and we are about to pay the price.  Additionally, FERC and PJM Interconnection, which control the electric grid, have designed markets that enrich generation companies rather than protect consumers.

To combat the failure of electric competition, electric company greed and lax federal regulations, my colleagues and I plan to introduce numerous bills that would place new caps on rate increases -- and force the electric generating companies to take a responsible role in stabilizing and minimizing consumer costs.

These proposals include:

• Requiring a portfolio of contract lengths where electric companies must enter into short, medium and long term contracts and purchase at “least cost” electricity;
  
  
• Banning winter terminations in nearly all cases to protect customers when they are the most vulnerable;
  
  
• Requiring tougher notification requirements before a utility can shut off a resident’s power;
  
  
• Allowing municipalities to aggregate their residential and small commercial rate classes for the purpose of purchasing electricity in bulk at lower prices.

We must 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.

It is time for the General Assembly to step up and pass legislation that finally tells corporate monopolies that we will not tolerate price gouging; and that we will not stand back idly and allow them to take advantage of a deregulated market to reap colossal windfall profits at the expense and ruination of Pennsylvania families.

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