Pennsylvania Energy Legislation

Posted on Tuesday 14th October 2008
As the national energy legislation unfolds, the Pennsylvania legislation also gets a surge this fall. The regional implications for utility rate increases may have a significant impact on your household and business budget over the next few years and beyond. 
Consumers across Pennsylvania are facing record rate increases, and the state House and Senate are taking measures to weigh the consumer interests as well as those for Peco Energy Co. and other utilities.

The landscape:

The potential utility rate hikes starting in 2010 are due to the expiration of rate caps under deregulation. Over the summer, the state House-approved energy-savings measure ordering utility companies to phase in smart meters over 10 years and absorb the cost through the rate increases. The smart meters have been piloted in the Lehigh Valley, and they have proved to help consumers save money. The energy-savings measures voted by the state House were designed to encourage conservation, which is typically the best way for consumers to reduce costs since homeowners and businesses cannot individually control the rates. The old adage of ‘Good Management comes from good measurement’ rings true now more than ever. The more that end users can see the cost breakdown, the more likely that they can adapt accordingly.

The latest action:

Over the last week of September, the state Senate has removed certain aspects of consumer protection in the bill, previously approved by the state House. Instead of requiring "smart meters" as a conservation tools to gauge consumption, a state Senate committee on 9/23/08 eased the burden of the cost on utility companies like Peco. State Senator Robert M. "Tommy" Tomlinson (Republican, Bucks) chaired the committee that would make the ‘smart meters’ voluntary. Under this strategy, customers would need to request the ‘smart meters;’ and then pay for the installation.  As an offset, under the state Senate proposal, utility companies would be required to develop and encourage conservation programs.  If they fail to meet certain conservation goals, then the utility companies would be subject to fines.  For short-term relief, the General Assembly may find a way to help consumers by requiring the utility companies to ‘phase in’ the higher rates.

The impact on Pennsylvania Consumers:

The state Senate approach would primarily leave the decision to conserve in the hands of the consumers. With the potential double-digit rate increases due to deregulation, the utility companies could have an advantage, while consumers and businesses bear an increased cost burden to pay for the ‘smart meter’ installation and the higher rates. Given the voluntary status, statistically fewer customers would typically choose to pay for and then benefit from this cutting-edge technology.

The impact on the State:

Overall, the executive leadership under Governor Rendell and the legislature have championed energy conservation and reduction in Pennsylvania. The Pennsylvania state House and Senate both agreed to set a target reduction in energy use of 2.5% by 2013. The ‘voluntary’ aspect of the smart meter program may make it more difficult for Pennsylvania to initially achieve its overall targets for reducing electricity use. As the offset, the quality and impact of the utility company ‘conservation’ programs, certainly remains to be seen. The 2.5% reduction goals were drafted to not only help consumers, but also to slow climate change and reduce pollution. As well, conservation overall helps reduce the need to add new power plants to meet the increasing energy demand in Pennsylvania.

Start Now. Save energy in your own home:

While the state House and Senate work out the details, you can start saving energy. Homes and buildings account for over 40% of our national energy consumption and green house gases according to the US Department of Energy and Environmental Protection Agency, so every house counts! For great GREENandSAVE ways to Save Money and the Environment, you can now see the actual payback on making improvements: Click Here:  Energy Saving Home Improvements  

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