Friday, February 12, 2010

Electric Rate Caps Ending Locally in 2011

Residents of Northwestern PA Can Expect Dramatic Increase in Electric Bills
By Attorney Harry Geller, Executive Director, PA Utility Law Project


Beginning next year (2011), residents of northwestern Pennsylvania can expect a dramatic increase in their electric bills.

For more than a decade, electric rates have been frozen and electric prices have remained stable. On December 31, 2010, these rate caps will end for the major electric distribution companies serving northwestern Pennsylvania. Companies such as Penelec, Allegheny Power and Met Ed will begin to pass on the cost of electric generation to their customers.

Unless low-income consumers of regulated utilities begin to act now, the impact of these higher rates may have devastating effects.

In some areas of the state where electric rate caps have already come off, customers have seen increases of about 30 percent in their electric bills. While northwestern Pennsylvania rate increases may not be quite as dramatic, they will certainly be substantial.

The actual rate charged to consumers will be subject to market conditions such as energy supply and demand, and global economic conditions.

We expect price increases for electricity to have the greatest impact on low-income households. Those households, who already must choose between paying for electricity or for other essentials, simply may not be able to fit increased electric costs into their budgets.

You Should Act Now

Since the change is coming soon, consumers should act now before their electric bills increase next year.

Low-income households can enroll in and/or receive assistance from utility Customer Assistance Programs ("CAP"s) and the three programs providing free weatherization and conservation services.

These conservation programs are the Weatherization Assistance Program (WAP), and the utility company Low Income Usage Reduction Programs (LIURP), and the Act 129 Energy Efficiency and Conservation Programs.

Customer Assistance Programs

Customer Assistance Programs (CAPS) can help low-income consumers lower monthly utility bills. The household income is determined and bills are based on a percentage of income or on a discounted rate so that monthly payments are generally reduced.

Some CAPs also include the forgiveness of outstanding past debts. In order to continue receiving CAP benefits, full and timely payment of CAP bills is required.

Weatherization Assistance Program

The Weatherization Assistance Program(WAP) is administered in Pennsylvania by the Department of Community and Economic Development ("DCED"). WAP provides low income households free weatherization services that help reduce energy consumption and energy bills. The services available under this program include a home energy audit, the installation of energy efficiency measures and in-home education about energy conservation. The energy efficiency measures can range from the installation of roof or wall insulation to the replacement of inefficient furnaces and appliances.

For the next three years, the weatherization program will receive additional 'federal stimulus' funding to assist low income households weatherize their homes. As a result, the average weatherization job on each household will be more extensive and thousands of additional homes will be served.

Low Income Usage Reduction Program (LIURP)

LIURP is administered by local electric companies under the oversight of the Pennsylvania Public Utility Commission. LIURP is an education and conservation program targeted to high energy users. Qualifying households receive services similar to those in WAP such as an energy audit, free installation of energy efficiency and conservation measures and free information about energy conservation and usage reduction.

Act 129 of 2008

Act 129, enacted by the Pennsylvania legislature in 2008, requires the Pennsylvania Public Utility Commission to administer and oversee the design and implementation of Energy Efficiency and Conservation Plans by regulated electric utility companies such as Penelec.

The overall goal of Act 129 is to reduce electricity consumption throughout Pennsylvania. The law requires that low-income households receive special programs and attention. Electric companies will be providing targeted, free energy efficiency and conservation programs to help low-income customers reduce their electric consumption and reduce their overall electric bill.

Apply For Help Now

In conclusion, electric rate caps will end within the year and electric rates are expected to increase significantly. Low income consumers need to act now. The CAP and energy conservation programs provided by electric distribution companies and weatherization providers will assist to reduce the impact of the higher rates. Apply.