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Electricity rate caps have already ended in six utility service territories and will end everywhere in Pennsylvania by January 1, 2011. When they do, rates will rise. That result is not surprising, since rates have been capped for 14 years (what other price or wage has been capped for such a long time) and the world now is in the middle of an energy crisis.
The bargain that Pennsylvania electricity consumers have enjoyed since 1996 when rates were capped will end, and prices will include increased costs of the raw materials that are used to generate electricity, mainly coal and natural gas. And our growing demand for electricity will work to push prices even higher.
That's the bad news.
But here's the good news. Our state senators can help families and businesses keep electric rates down by passing HB 2200, the Energy Savings Bill. When it comes to rising electricity prices, HB 2200 spells relief.
Passed by the Pennsylvania House of Representatives last February on a bipartisan vote of 152 - 45, HB 2200 would create comprehensive energy conservation programs in all parts of Pennsylvania to reduce the overall demand for electricity and cut peak electricity demand on our hottest days.
The programs would give Pennsylvania's families and businesses the tools they need to use energy smarter, from LED and compact fluorescent light bulbs to rebates and incentives for energy saving appliances to help for home improvements.
The legislation would also require electric utilities to provide all electricity customers with smart meters, as PPL, Inc. has already done, to give households more control over how much energy they use and how much they pay for it. Utilities would also be required to offer flexible rate plans that pay customers to voluntarily shift some of their electricity use to times when the demand is low. Consumers would also have the option of staying with their current rate plan.
Unfortunately, the state senate failed to take any action on the bill before it broke for summer vacation. Now, when the senators return in September, they will have only 10 legislative session days to act before they recess in October for the elections.
What will happen if the senate fails to pass HB 2200 this fall? The bill will die with the end of this legislative session. There would be no chance to enact energy savings legislation until 2009, and the process would start from scratch. Once the legislation is passed, it will take as long as a year to implement the programs. So, the practical effect would be that no comprehensive energy conservation programs would be in place in time to help people minimize increases in their electric bills as rate caps expire.
The energy conservation programs that will be available to consumers would be cost-effective and practical. In states with similar programs, like Vermont and California, consumers can get rebates for buying energy efficient lighting, air conditioners, dehumidifiers, refrigerators and clothes washers. Homeowners can get home energy audits, receive financial incentives for energy efficiency home improvements and qualify for low-interest loans to finance projects like upgrading heating and cooling systems, air sealing and improving insulation. By taking advantage of these programs, consumers can shave about 20 percent off of their electric bills.
As consumers save energy and money by taking advantage of these programs, they also keep down the demand for electricity. Consumers who shift their energy use to evenings and weekends, when the demand for electricity is typically lower, help to make the supply of electricity more reliable and affordable for all. A 1 percent drop in the demand for electricity during times of peak use can lower the wholesale price of electricity by a full 10 percent, which saves everybody money. And cutting peak demand would also reduce the need to build more power plants and transmission lines.
Since it is so central to helping people save money, ensuring the reliability of the electric system, creating jobs and cleaning the air, we've asked all of Pennsylvania's state senators to sign a pledge to pass HB 2200. Please join us in asking the Senate to pass HB 2200 and to provide relief from rising electricity bills.
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Harrisburg, PA 17101