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Pa. House holds hearing on variable-rate electric bills - abc27 WHTM

Pa. House holds hearing on variable-rate electric bills

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HARRISBURG, Pa. (WHTM) -

They brought charts and graphs to the House Consumer Affairs Committee hearing.

Numerous energy executives tried to explain why low temperatures in January plus high demand equaled sky-high electric bills for variable rate customers.

Lawmakers say couple that with uninformed, and possibly duped consumers, and it created the perfect storm that has led to a tsunami of complaints.

"The big, big, big problem here has been the lack of education to the consumer," said Representative Robert Godshall (R-Montgomery), who urged the Public Utility Commission to do a better job on that front and also suggested capping those rates may be the only answer.

"No matter what we do, education wise people still won't understand it," Godshall said. "We're gonna have to put caps on variable rates. I don't see any other way."

Godshall also said three suppliers have already been fined for fleecing customers in Maryland and he asked PUC Chairman Robert Powelson how many companies have been fined here in Pennsylvania.

When Powelson said it's still investigating, Godshall followed up:

"Well, the three companies that were fined in Maryland also have companies here in Pennsylvania. That's why I asked the question."

Representative Rob Kauffman (R-Franklin) is a free-market conservative, but says consumer complaints shows him a legislative fix is necessary.

"Some of these companies preyed on people," Kauffman said. "And they didn't just prey on the vulnerable, they preyed on people of every level. Every socio-economic level, every education level, you name it, they preyed on Pennsylvanians."

Godshall's legislation, House Bill 2104, is in the works and it would put caps on how much variable rates can spike.

When one testifier at the hearing suggested that was an overreaction by lawmakers, Godshall shut him down.

"I know you. I've known you a long time and I know you're sincere. But some things have happened here and we're gonna have to protect our consumers," he said.

Several times during the three-hour hearing it was stated that many suppliers also lost money because of the polar vortex and the spiking wholesale energy market. They too were victims, the argument goes.

But who's checking that? When a company says it paid 44 cents a kilowatt hour and passes the cost on to customers, who exactly is checking on whether that company, in fact, paid 44 cents?

"That total responsibility is the PUC," Godshall said.

When I counter that PUC officials have told me nobody is checking, Godshall added: "In reality, it's nobody. That's exactly right."

Representative Peter Daley (D-Fayette/Washington) is co-chair of the Consumer Affairs Committee and he supports a cap on variable rates. In fact, he wonders what's taken so long.

"In 1996 when we deregulated the industry, nobody ever foresaw this. We should have," he said. "We should have been prepared for this and had a cap on this. It's time the PUC steps up to the plate and do what they have to do immediately."

But there's a difference of opinion over what the PUC can do. A spokeswoman insisted it does not have authority over competitive supplier rates. It cannot legally check the books of the various companies and it cannot cap rates.

Lawmakers could give the PUC that power or just implement caps on its own.

It should be noted that just this week, the PUC rolled out several initiatives aimed at educating consumers about variable rate electric contracts.

PUC commissioners have also been calling for laws to make it easier and quicker for customers to switch from one supplier to another. Many consumers have complained they're being held for 30 days or more in what they believe is a bad deal.

 

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