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Senate wants answers to January's sky-high electric rates - abc27 WHTM

Senate wants answers to January's sky-high electric rates

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HARRISBURG, Pa. (WHTM) -

The Senate Consumer Protection and Professional Licensure Committee is the latest state body to investigate electric bills that spiked in January and February.

Chairman Robert Tomlinson - (R) Bucks County - made it clear from the outset that he believes consumers need protection.

"There's not a single senator here who hasn't been contacted by friends and neighbors desperate about the size of their electric bill and how they would pay for it," Tomlinson said in his opening statement to the three-hour hearing that brought together myriad stakeholders.

Industry representatives presented charts and graphs and tried to explain why electricity prices were off the charts.

"We set a new, all-time winter, peak electricity demand," explained Frederick Bresler, Vice President of PJM, which oversees the electrical grid for 13 states including Pennsylvania.

The Public Utility Commission also testified before a government body for the third time in as many weeks.

Chairman Robert Powelson said it expects to act this week and push utilities to shorten switch times from the current 30 days down to three. Customers have complained that they can't get out of what they think is a bad deal quickly enough.

"It will allow customers to not get trapped in another billing cycle," Powelson said.

Deceptive marketing by energy suppliers was also discussed.

"Some of these companies are targeting seniors because they know they can get them to switch with a teaser rate or whatever," said Senator Lisa Boscola - (D) Lehigh, Monroe, Northampton Counties.

The PUC promised to crack down on that as well. It has gotten 12,000 phone calls and registered nearly 5,000 official complaints from variable-rate customers who feel deceived. By comparison, Powelson said, last year at this point the PUC had gotten less than a thousand calls and for all of 2013 registered less than 3,000 official complaints. 

He promised to find bad actors and punish them.

"We have to now demonstrate zero tolerance for suppliers that have potentially hoodwinked customers, slammed customers, and misinformed customers," Powelson said.

First Energy Solutions, based in Akron, Ohio, is charging fixed-rate customers a one-time fee of $5-$15 to recover losses during the Polar Vortex.

But the PUC chairman isn't comfortable with that because, he said, fixed should mean fixed.

"I think there's a stench associated with the request put forward by this company to recover these costs," Powelson said.

Stench or not it's legal according to First Energy Spokeswoman Diane Francis who came to Harrisburg for Tuesday's hearing. She says there is language in the fixed-rate contracts of 300,000 Pennsylvania customers allowing the company to collect the fee.

She said the company's legal department is confident the surcharge is legal and that language in the contracts supports it.

But is that in the fine print on the back of page 7?

"It's not on page 7, but it is there," Francis said.

The Senate has now joined the House, the Attorney General, the PUC and the Pennsylvania Consumer Advocate in investigating sky-high electric bills. Changes are likely coming. Companies probably won't like them. Caps on spikes in variable rates are being discussed, so is a complete ban on variable-rate contracts for residential customers.

"I think people were victimized in some instances and I also believe people did not have enough consumer education," Tomlinson said. "I also didn't get my questions answered today. I think we absolutely need another hearing on this."

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