Lawmaker wants to ban variable-rate electric contracts in Pa. - abc27 WHTM

Lawmaker wants to ban variable-rate electric contracts in Pa.

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Lawmakers have gotten the memo.

It was sent out Monday by Senator John Gordner—(R) Columbia, Dauphin, Luzerne, Montour, Northumberland, Snyder—and it asks for support of his bill that would ban variable-rate contracts for residential electric customers in Pennsylvania.

It's a direct result to shockingly high electric bills that filled mail boxes across the state, and the complaints that followed. 

"What we've seen in the last four to six weeks was unconscionable," Gordner said. "Nobody who signed up for a variable rate was expecting their rate to quadruple or quintuple."

"We all know something has to be done," said Senator Robert Mensch—(R) Bucks, Leghigh, Montgomery, Northhampton counties—speaking about a legislative fix to those high bills.

What Mensch is doing is trashing his bill that would've auctioned off consumers to electric suppliers.

More than six in ten Pennsylvanians have not shopped in the open marketplace of electricity. They're choosing not to choose a supplier, instead getting the utility's default rate, and Mensch says they're losing money in the process.

"People are leaving money on the table," Mensch said. "Seniors are leaving money on the table. They could be saving $150 to $200 a year."

But recent complaints about shocking electric bills put Mensch's bill (SB1121) in the cross hairs. Critics feared it would force uneducated customers onto the open market. Electric suppliers would pay the state $100 for every customer it got, and it was estimated it would raise $300 million for the state.

Critics also said Mensch was supporting electric companies at the expense of consumers. Mensch still says his motivation was to help seniors save a few bucks. But he is up for reelection and has backed off the bill.

"It had flaws," Mensch concedes. "Serious flaws, so it will die a slow death."

Mensch said he's redoing a bill that will include reforms like allowing customers to quickly switch out of a bad contract. He would also put caps on how much a variable rate can spike in a given month.

Senator Rob Teplitz agrees reforms are needed, but he prefers the complete elimination of variable rates.

"If we're going to ask people to make the choice, we need to make it as easy as possible," Teplitz said. "And it has to benefit them as much as possible. There's too much of a downside to variable rates."

The Pennsylvania Public Utility Commission said Monday it has received nearly 10,000 phone calls and has registered nearly 4,000 complaints about variable rate electric bills.

The Attorney General's office has gotten 8,716 phone calls, which have resulted in 3,081 official complaints.

Energy experts are warning the more than 60 percent of Pennsylvanians who have not shopped for an energy supplier to do so soon. Every three months the default rate is reevaluated, and the spike that hit variable customers last month is expected to force the default rates higher when the price is adjusted.

Best advice: Find the lowest fixed rate plan and sign up.

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