The George Report

Beware of the Electric Party-Pooper on New Year’s Day 2011

By State Rep. Camille "Bud" George, D-74 of Clearfield County

New Year’s Eve on Dec. 31, 2010, might be merry. However, New Year’s Day 2011 promises to be gloomy – and expensive.

The moment the clock strikes midnight, the electric-generation charges on your Penelec bill are projected to jump by 50 percent. If you’re paying $100 a month in December 2010, you can expect to pay around $150 for January 2011.

I think the projected increase will only grow over the next 30 months before the rate cap expires.

 Pennsylvania’s consumer advocate pegged Penelec’s increase at 50 percent. "Needless to say, while the actual rate increases that we experience may be higher or lower than these estimates, increases of this order of magnitude will have a dramatic impact on millions of households and businesses across Pennsylvania," he wrote.

Gov. Rendell already knew that Pennsylvania is facing a cataclysmic jolt to its economy. He’s been pushing the Energy Independence Strategy for 15 months, only to see major parts of it bog down in the state Senate.

One of the initiatives is my House Bill 2200, which would save consumers $1.3 billion by 2012 through conservation and decrease the cost of electricity during peak usage when electricity is the most expensive. It also would implement smart meters, enabling ratepayers to adjust usage to changing electric prices.

Another key part still stalled in the state Senate is Special Session House Bill 1, which would make it easier for consumers to purchase and install solar panels and acquire high-efficiency heating/cooling equipment and appliances.

Senate action on these key bills reportedly is nearing. I fear even their enactment will not be enough. I have introduced Special Session House Bill 54, which would extend the rate caps by another two years and give Pennsylvania some breathing room.

I’ve also been preparing legislation that would re-regulate electric generation. Virginia has re-regulated after deregulation didn’t produce lower rates. Lower rates also were promised in Pennsylvania, but that is but one of deregulation’s hoaxes on citizens.

Some of the same lawmakers who voted for deregulation in 1996 – only 27 other House members joined me in voting no -- are now arguing that an unfettered utility industry answerable only to shareholders is the way to proceed.

 Memories must be short on the broken promises, the higher rates in deregulated states and Enron, whose market manipulations cost consumers billions of dollars.

 It takes brass for the same lawmakers who dug the hole we’re in to propose digging it deeper.

The utilities, most enjoying record profits, are not dummies. They’ve spun off separate companies to generate power. When the utility parent company – such as FirstEnergy and PPL -- purchase power for a year or two down the road, their subsidiaries often are the ones submitting winning bids.

However, ratepayers don’t know that the utilities have purchased power from their own subsidiaries until weeks or months later.

The utilities are laughing all the way to the bank. FirstEnergy – Penelec’s parent company – reported first quarter net income of $276 million on revenues of $3.3 billion.

"Our record first-quarter generation output reflects our continued success in positioning our generation business as the platform for our future growth," said FirstEnergy’s CEO.

Ratepayers can’t be so giddy.

In the next 30 months, we’ll be checking the efficiency of our furnaces, lights and hot-water heaters as we brace for the onslaught of steeper electric costs. So, too, must school districts. Unless their graphics art departments can start printing money, schools’ steeply higher electric bills likely will mean higher school property taxes.

Pennsylvania needs to move fast and forcefully to be able to celebrate on New Year’s Eve in 30 months.

 Otherwise, it will be lights out on New Year’s Day.

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