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Monday, July 14, 2008

Prepare for a shock

The real energy crisis is still a year or two away for most Pennsylvania residents.

Two Southeastern Pennsylvania newspapers are warning their readers to brace for outrageous increases in electricity rates in 2009 and beyond thanks to another botched job by state politicians.

Electricity deregulation was supposed to create competition and lower prices. It hasn't worked out that way. Caps imposed by the state to ease into the era of deregulation are about to come off, prompting utility companies to increase their rates dramatically.

From The Mercury:
The caps, which froze electric rates at 1990s levels, were imposed on utilities as part of a deregulation designed to deliver lower bills in a competitive marketplace. Once those caps expire, utilities can bill customers for the true price of the power they buy.

But some legislators say it has actually decreased competition.

State Sen. John Rafferty, R-44th Dist., said lawmakers are looking at several ways to help consumers. One allows rates to increase by a certain percentage each year, a method that would avoid huge shocks in 2010 and 2011. Another proposes to freeze rate caps for up to five more years.

A bill sponsored by Rafferty would allow municipalities to purchase power from the grid — just like major utility companies do — but only after public hearings with constituents.
Read "Energy prices could jump by 63 percent by January 2010" in The Mercury.

Read "Electric deregulation could zap your checkbook" at The Delaware County Daily Times Web site.

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