Rep. Robert Godshall (R-Montgomery)
Majority Chair House Consumer Affairs Committee
When politics gets in the way of good public policy, citizens inevitably lose. That is precisely what happened to electric ratepayers when the Independent Regulatory Review Commission (IRRC) met May 22 and, by a 3-2 vote, approved regulations put forth by the Pennsylvania Public Utility Commission (PUC) that fail to adequately protect the public against electric rate price gouging.
In fact, the PUC regulations even go so far as to block the citizens’ right to provide public input when the PUC determines a decision must be expedited.
Following severe weather in January thousands of variable electric rate customers were hit with electric bills as much as 600 percent higher than normal. While variable rates are subject to change based on fluctuations in the wholesale electric market and at the will of the electric supplier, one cannot reasonably be expected to accept rate increases as high as 600 percent!
As chairman of the House Consumer Affairs Committee, it is my job to examine and put forth legislation that will protect consumers from harm. I held hearings after my office and many of my House colleagues were slammed with phone calls and letters from constituents complaining about exorbitant electric bills. Many of these calls were emotional – even desperate. For some, the rate shock represented certain default.
About 10 years ago, Pennsylvania deregulated its electric market and consumers were urged to shop for more favorable rates. I fully support the concept of electric competition, but the process must be improved to protect consumers and mitigate future occurrences of “rate shock.”
The problem with deregulation is that it led to a dramatic rise in the number of new electric service providers, more than 355, and oversight became more challenging. Many providers are little more than marketing operations that offer low introductory rates to lure consumers away from their local default supplier, then collect handsomely when the low rate expires. Many electric customers never realized they were committing to a variable rate contract − many not even receiving a hard copy of the agreement.
The hearings before my committee demonstrated that consumers were not being provided with information that clearly spelled out the nature of their variable rate contracts. Then, once a customer gets hit with a high bill, it can take one or more billing cycles before they are able to change electric suppliers.
In March, I introduced House Bill 2104, which was passed by the House Consumer Affairs Committee and is now before the full House. This legislation would protect consumers by limiting the amount variable rates can rise in a 30-day period, shortening the time necessary for consumers to switch electric providers, and requiring electric companies to fully disclose, in plain language, the terms of their variable rate plans. My bill would also require the PUC to post current and historic electric rates on the PA Power Switch website.
On May 22, I testified against the regulations proposed by the PUC as I firmly believe it is in the public’s interest for the PUC to provide proper public notice and a public comment period before rules and regulations are adopted.
Pennsylvania law pertaining to “final-omitted rulemaking” permits exceptions to the public notice/public comment law only in the following circumstances:
-- When comments from the public are not appropriate, necessary or beneficial.
-- When all persons subject to the regulation are named and given personal notice.
-- When notice is impractical, unnecessary or contrary to the public interest.
I remain at a loss to understand how the PUC regulations met the threshold that would preclude the public from weighing in on matters that impact them directly. The public, who in some cases reportedly suffered exponential increases in electric rates, should have a voice.
The recent unprecedented electric rate hikes demonstrated that the public is at substantial risk. This is no time for the public to be silenced. House Bill 2104 is the only guarantee that consumers have to be assured that never again will they be slammed with electric rate increases of up to 600 percent in a single month.
