HARRISBURG – State Rep. Camille “Bud” George, majority chair of the House Environmental Resources and Energy Committee, urged the Pennsylvania Legislature to consider actions taken by Texas to delay deregulation-spawned increases in electric costs.
“Last week, the Texas state Senate voted unanimously to delay deregulating a Texas electric market that would face sharply higher electric bills,” said George, D-74 of Houtzdale. “Most Pennsylvanians soon face rate shock — double-digit increases in their electric bills — and their lawmakers should be looking at how other states are trying to solve the deregulation debacle.”
George said the Texas legislation would delay deregulation in northeast Texas for as long as 10 years and is expected to win quick approval in the Texas House of Representatives.
“We need to put safeguards in place to protect customers from dramatic rate increases that could result from a deregulated market,” Texas Republican Sen. Kevin Eltite, the bill’s author, said when he introduced the bill in January. “Residential rates in our area are on average 45 percent lower than those in neighboring cities that have entered the competitive market.”
George, who is drafting legislation that would extend Pennsylvania’s rate cap protections for an additional two years, said utility shills are fond of pointing to Texas’ deregulation experience, claiming, “The experience of Texas demonstrates how competition can lead to lower prices and greater consumer choice.”
“The claim is patently wrong – in Texas, Pennsylvania and nationwide,” George said.
A March 20 editorial in the Dallas Morning News said, “Ten years after the state deregulated the market, residents are looking for relief.”
In a March 26 copyrighted editorial, The Houston Chronicle wrote, “Today, however, most research not linked to the electric industry confirms what Houstonians know just by opening their mail: for almost the whole period of deregulation, electricity prices have skyrocketed.”
Three days later, another Houston Chronicle copyrighted editorial noted, “But most consumer advocates say deregulation just hasn’t done what was promised. Texas electricity prices were lower than the national average before deregulation. Now we pay above the national average.”
The editorial endorsed a proposal that would enable cities, counties and other entities to negotiate electricity rates on behalf of residents who “are stuck with an electricity system they didn’t ask for – and that has done them little good.”
George said the proposal endorsed by the Houston newspaper is somewhat similar to his proposal to create a Pennsylvania Power Authority to purchase electricity on behalf of Pennsylvania electric-distribution companies such as PPL, whose rate cap ends Jan. 1, and Met-Ed, Penelec and PECO, whose rate caps expire a year later.
“A power authority would protect customers from what a Public Utility Commissioner last summer called a ‘lethal combination of a dysfunctional wholesale market and a retail framework that adds unnecessary costs to already-high wholesale prices,’” George said. “Regulators, industries, consumer advocates and even utilities without generation capacity have described the wholesale power market as broken, consumer unfriendly and fatally flawed.”
George said Illinois established a power authority in 2007, and is predicting lower electric bills for its ratepayers.
“Transparency is good for consumers,” George said. “We need to give consumers confidence in the market process, confidence that is sorely lacking by all except the utilities and their mouthpieces.”
George said he supports efforts like House Bill 20, which would cap electric rate increases to 15 percent and offer the consumers the option to phase-in rate increases.
“However, at some point we have to ask ourselves whether such moves amount to putting new brakes on a vehicle with four bad tires and never worked as promised,” George said. “Other states — Texas, Connecticut, Virginia, Illinois and Maryland – are taking a hard look at deregulation and are considering switching to other models.”