George Unveils Energy Bills to Ease Electric Rate Shock

HARRISBURG- State Rep. Camille “Bud” George, majority chair of the House Environmental Resources and Energy Committee, today unveiled
legislation designed to reduce energy usage and costs and require utilities to implement energy-efficiency measures.

“The bills go the heart of our energy woes — an economic model that rewards high energy use and prices but does little to spur conservation,” said George, D-74 of Clearfield County. “The legislation would reward and implement conservation efforts and make current wasteful practices increasingly expensive.”

Under House Bill 2200 and Special Session HB 19, utilities would be required to reduce overall energy output by 2.5 percent and peak demand by customers — when energy prices are the highest – by 4 percent. Both benchmarks would be achieved by May 31, 2013.

“Cutting demand by 4 percent can shave more than 15 percent off of the wholesale price of power during summer peaks when prices can be as much as 400 percent higher,” George said. “Meanwhile, we change the dynamic so that utilities promoting energy conservation are rewarded rather than punished.”

George said his measures are designed to work in tandem with House Bill 2201 and SSHB 20, crafted by House Majority Whip Keith McCall, D-122 of Carbon County, which would implement smart meters so consumers could adjust energy use to account for prices, phase in electric-generation rate increases over three years and enable utilities to purchase power through a diverse portfolio.

Both George’s House Bill 2200 and McCall’s 2201 will be the subjects of a public hearing before the House Consumer Affairs Committee beginning at 9:30 a.m. Thursday, Jan. 31, in the Majority Caucus Room in the Main Capitol.

“Studies have shown that improving energy efficiency and demand-side response and implementing conservation programs and technologies to be among the most cost-effective means of controlling the cost of electricity,” George said. “House Bill 2200 would help to counter the massive rate increases coming in 2010 and 2011 across a huge swath of Pennsylvania.”

George said California realized $2 in savings for consumers for every dollar invested by the utilities in efficiency measures.

“Pennsylvania ranks 44th among states in per capita spending on energy efficiency by utilities, which spend a paltry 28 cents a person,”  George said. “We must make it economically viable for efficiency and conservation to be centerpieces in Pennsylvania’s energy policy.”

George’s HB 2200 would direct the state Public Utility Commission to establish the criteria for implementing conservation and efficiency programs and select a program administrator to oversee the programs’ implementation within each utility.

“There are carrots and sticks,” George said. “The PUC and its program administrator will provide incentives for exceeding conservation and efficiency goals as well as penalties for not meeting them.”

George said the programs would be designed to benefit all classes of ratepayers, including measures targeting lower-income consumers.

“House Bill 2200 would implement many of the requirements and recommendations of the 2007 federal energy bill,” George said. “It will give Pennsylvania the freedom and framework to work with utilities to improve energy efficiency, reduce energy use and counter the rate increases.”

George said rate caps, implemented as part of Pennsylvania’s ill-fated deregulation of the electric market in 1996, will create economic turmoil as they expire.

PPL’s 1.4 million customers in 29 counties already face rate increases projected at 35 percent when its rate cap expires after Dec. 31, 2009. More than 2.7 million customers of PECO and FirstEnergy’s Penelec and Met-Ed subsidiaries face double-digit rate increases when their rate caps expire after Dec. 31, 2010.

George said the House last week unanimously approved his House Resolution 506, which urges the state Department of Environmental Protection and the PUC to evaluate measures taken by other states to mitigate rate shock.

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