Electricity Rate Caps' Expiration Pending

The Pennsylvania Public Utility Commission says electricity prices would be only a small amount higher if rate caps expired now. However, spokeswoman Jennifer Kocher says nobody can say what market prices will be like on New Year’s Day 2011, when rate caps will end. “We released these numbers so people can see the volatility that is out there in the electric market. If rate caps had expired a year ago, and people started paying market rates, Allegheny Power customers would have been looking at a 104% increase in their rates. So the market has swung wildly,” says Kocher. She says some companies, like Allegheny Power, have already purchased much of the electricity they’ll use that year, so their rates are almost assured to increase 10.6% two years from now.

Kocher says in an effort to keep bills reasonable, the PUC is requiring companies to reduce electric usage in coming years. She says companies will probably give incentives for reduced usage. Kocher maintains that Pennsylvanians have options, though they might not realize it. “There’s not a lot of it happening right now, but customers can shop for a competitive generation supplier, meaning that the Allegheny price is set, buy they do not have to buy their energy. They can shop around and look at other electric generations suppliers and choose a separate company if that company is lower [in price],” says Kocher.