States Such As Pennsylvania Must Begin Protecting Consumers By Getting Congress To Fix the System

ALBANY, NY (09/10/2008)(readMedia)-- One day several years from now, when Pennsylvania businesses and consumers open their electric bills, they'll find huge increases. The nation's non-profit utilities have a solution, but say the states must get Congress to start working on it now.

Pennsylvania deregulated its electricity market but imposed a cap on rates until 2011. Here is a preview of what Pennsylvanians can expect: Both Connecticut and Maryland customers faced increases of over 70 percent when their rate caps ended.

"These experiences should be a warning as those rate caps are set to expire," Mark Crisson, CEO of the American Public Power Association, told a committee of the Pennsylvania legislature today.

The public power association, which represents non-profit utilities owned by cities and counties, "urges state decision-makers to closely review the wholesale electricity markets," Crisson testified, "and take steps to effect changes in those markets by the federal government."

Attending the Philadelphia hearing of the Pennsylvania House's Environmental Resources and Energy Committee were Gov. Ed Rendell; Andrew Ott, Senior Vice President of Markets, PJM Interconnection; Liz Robinson, executive director of the non-profit Energy Coordinating Agency; and Philadelphia City Council member Curtis Jones Jr.

The hearing comes as PECO, Pennsylvania's largest utility, said it anticipates a 20-percent jump in charges when its rate cap ends. State officials say other utilities' rates are likely to increase even more.

The public utilities Crisson represents have purchased from the problematic wholesale markets for years. Now Pennsylvania consumers will be exposed to the escalating prices in the federally-regulated wholesale markets.

With other trade associations and consumer groups, the public power association is asking the Federal Energy Regulatory Commission to investigate why electricity costs are rising so much faster in deregulated states.

So far the regulatory commission has done little.

"We understand this business because we are utilities," Crisson said. "And because we're nonprofits with only our customers' interest at heart, we're urging state legislators to push federal regulators to stand up and protect the people and businesses we serve."

For more information, go to the website of the Campaign for Fair Electric Rates, www.fairelectricrates.net.

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Based in Washington, D.C., APPA is the national service organization for the nation's more than 2,000 not-for-profit community- and state-owned electric utilities serving 45 million customers.

For information: Nicholas Braden, 202/467-2952