Where's the public outrage? In the next two years Pennsylvania electricity rates could increase as much as 60% in just one year. And nothing could be more regressive – poor and middle-class families will be forced to spend a disproportionate percentage of their income to pay for this hefty increase because of deregulation.
Here's how it this is playing out: In 1996, the Pennsylvania General Assembly enacted the "Electricity Generation Customer Choice & Competition Act" a deregulation measure intended to increase competition and lower rates. Didn't work out too well, though, as StopThePARipoff.com notes. Take utility Pike County L&P: Before deregulation the average monthly bill was $179.80. Now? $314.66.
Thankfully, litigation has slowed the tide of deregulation across most of the state, as utilities have been forced to cap their electricity rates to consumers. The problem is that most of these caps are going to expire in the next two years.
But it isn't too late to stop it. Tom Knox is leading a petition campaign to force the Pennsylvania legislature to take action – to prevent this massive rate increase on consumers. You can sign the petition here:
http://www.stopthePAripoff.com
I'm all for opening up markets to competition. But only where a true competitive environment exists. The underlying problem is that there is no effective retail competition for electric generation in Pennsylvania – thereby eliminating any competitive pressure to keep rates affordable. There isn't a fluid market of firms competing against each other, fighting for new customers, and ensuring the lowest rates and highest levels of service.
Instead, according to a March 2009 study (pdf) conducted by the American Public Power Association, states that deregulate are stuck with pay rates that are, on average, 54% higher than those states that have continued to regulate electric utility rates. And it's consumers and small businesses that lose. Electric rate increases will result in business closure or cancellation of future expansion, job loss, increased bill delinquency rates and higher living costs for working families.
Pennsylvania businessman and Democratic gubernatorial candidate Tom Knox is pressuring the Pennsylvania legislature not to fall into this trap. He proposes a three-part solution:
- Extend caps electric rates increase for 3 years, limiting increases to the cost of inflation plus 1.5%
- Create a state Power Purchase Authority that will obtain electric generation for all residential customers, leveraging the state’s significant buying power for lower rates and pass the cost savings onto customers.
- Provide customer safeguards to prevent winter termination of electric service and make it easier for service to be restored.
Stopping this rate hike, which would be the equivalent to the ‘biggest tax increase in Pennsylvania history,’ is just common sense, good government. We cannot let the rest of Pennsylvania’s utilities hike up their rates at the expense of Pennsylvania’s hard-working families. Please sign the petition and let's be heard in Harrisburg. Tell the Pennsylvania legislature to turn around and avoid this dangerous and costly fall into the dregulation trap.
NOTE: I'm a volunteer for the Tom Knox for Governor campaign.