Electric Generation Rate Caps

You have likely heard that electric rate regulation will end in the central Pennsylvania region at the close of this year.  To assist my constituents with this significant event, I have put together this web page that I hope you will find useful.

A little historical perspective might be helpful.  Regulation of rates in Pennsylvania began in 1997 with an agreement between the legislature and electric utility generators to “cap” or limit rates for a period of ten years.  Rate caps were designed to be a transitional period towards deregulation of electric rates and a move towards open market or competitive pricing.  The cost of electricity at the time of regulation was divided into two components, transmission (distribution) and supply (generation).  Essentially, the per-kilowatt per hour price that we pay for the supply or generation of electric has been frozen since 1996. 

The rate caps expiration was staggered over the course of several years.  Once rate caps expire, Pennsylvanians will be able to purchase electricity at market prices just like consumers in many other states.  Pennsylvanians will also be able to shop between different companies for electricity.   It is widely anticipated that after being frozen for over 13 years, electric rates will rise after rate caps expire.

During this tough economic time, the last thing you want to hear is that utility rates will be increasing.  Some have suggested that the legislature extend rate caps, however, such a move would not be legal since the agreements signed with the utility companies are legally binding.  Any such move would trigger significant legal fees on top of higher rates.  However, there are several things that that will help ease any such increases in electric rates.  

As a consumer of electricity, you can help reduce your electrical costs by focusing on increasing energy efficiency.  Energy efficiency can mean making simple changes like installing higher efficiency lighting and appliances, repairing or replacing heating and cooling systems, and weatherizing your house or business.

The electric distribution companies are taking a part to help minimize rate increases to consumers after the caps expire.  Some utility companies are establishing phase-in or pre-payment plans to help consumers slowly absorb rate increases.  Many companies are also instituting programs to help level out the differences between high and low demand periods of electrical loading.  Additionally, there may be an opportunity to review a portfolio of energy contracts that will expire at different points in time to help mitigate large fluctuations in market prices.  Lastly, the utility companies will have to compete amongst each other for customers in the market place. 

Helpful Links

Understanding Rate Caps
The PA Public Utility Commission provides explanations as to what is happening this winter with rate caps.  This information page discusses ways to take action and ways to protect your heating and electric bills once the rate caps are removed.  You may access this PDF file here.

Click here for more information about the rate changes after the rate caps expire.  The PUC provides updated information on the estimates for rate costs as well as what measures are being taken to help Pennsylvania families and businesses handle the increased costs.

Electric Suppliers List
For more information about the different utility companies offering service in Pennsylvania, visit the PUC's Electric Suppliers List.  They provide updated information on the various electric companies that are authorized to sell electricity in Pennsylvania.

Ways to Conserve Energy
For more information on simple things you can do to make your house more energy efficient, visit the U.S. Department of Energy's website.  They provide a brief list of various actions a homeowner can take to make his or her house more energy efficient. 

The PA Department of Environmental Protection (DEP) put together 16 ways to make your house energy efficient and provides other websites that will you save money and energy, visit the DEP website.

The PUC has included ways to save on your heating bill and energy consumption.  You can find these ideas here. 

Assistance With Energy Bills
For more information on different local and federal energy payment assistance programs that you may be eligible for, visit the PUC'S Energy Assistance Webpage.  They provide information about the various programs and how to apply for them.  You can also visit CAP of Lancaster County's website website for more detailed information about energy assistance programs in Lancaster County.  Information on the Low-Income Home Energy Assistance Program (LIHEAP) can be found on the PA Department of Public Welfare's website  or by calling the local offices in Lancaster, 717-299-7543, or York 1-800-991-0929.

Choosing A New Energy Generation Supplier
The decision to use an energy generation supplier can be based on price, services, and incentives offered by the competitive supplier.  For more information including the "price to compare" and a list of licensed energy generation suppliers, see the state Office of Consumer Advocate's Electric Shopping Guide on its website, www.oca.state.pa.us.  

If you are interested in choosing a new energy generation supplier, carefully check the terms of the agreement offered by the company, especially the length of the contract and penalty clauses.  For more information write or call: