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Pa. Dems warn of electric bill 'shock' as rate caps end
Tuesday, July 01, 2008

HARRISBURG -- Senate Democrats say something must be done to ease the "electric rate shock'' that is coming to most parts of the state in 2010, when the current caps on rate increases expire.

"The jump in electric rates will be the equivalent of the biggest tax increase Pennsylvania has ever seen,'' contended Sen. Vincent Fumo, D-Philadelphia, who was supported at a news conference today by Sens. Jim Ferlo of Highland Park, Sean Logan of Monroeville and Wayne Fontana of Brookline.

Rate caps for one large Western Pennsylvania utility, Duquesne Light, have already come off, but another one, West Penn/Allegheny Power, could have a rate increase of as high as 63 percent when the rate caps come off, said Mr. Fumo, based on information from the state's consumer protection office.

Other companies where the rate caps will come off in 2010 include FirstEnergy, PECO Energy, Penelec and PPL Electric Utilities, which service communities in central and eastern Pennsylvania and in Philadelphia.

Mr. Fumo said he'll soon introduce legislation to limit yearly electric rate increases to the rate of inflation (as measured by the Consumer Price Index) or 5 percent, whichever is lower.

But he said there will be a major battle in the Legislature, as he expects strong opposition from utility companies. Another alternative is to keep the rate caps in place for 10 more years, he said.

The rate caps that will expire in two years were put into place as part of electric company deregulation enacted in 1996, which Mr. Fumo said has been a failure because few customers have taken advantage of it to lower their rates.

First published on July 1, 2008 at 2:39 pm
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