Monday, March 30, 2009

Lawmakers and Power Companies Debate Rate Caps

A measure Democratic House leaders characterize as a top priority would phase in likely electricity rate cap increases over a three-year period rather than all at once. But utility companies have a big problem with some of the bill's language. Electricity rate caps in Pennsylvania begin expiring next year, which means some consumers could see their bills shoot up by as much as 40 percent. House Bill 20 would limit the increase to an annual maximum of %15 over a three-year period. It would also allow consumers to defer payments. The measure is currently before the Consumer Affairs committee, and will likely see a full House vote at some point this spring. George Lewis is a spokesman for electric company PPL. He says the corporation and other utilities agree with the spirit of the measure, but want the option of charging interest on those deferred rate hikes. He says, “Allowing customers to defer payments is, in effect, a loan that the utility company is making to its customers. We still will have to borrow money in order to pay the electricity suppliers that we have under the contracts we've already signed.” A spokesman for House Majority Leader Todd Eachus says House leaders are willing to negotiate details, but insists easing the financial burden on consumers, and not utilities, is the top priority.

No comments: