| Letter to the editor | FOR IMMEDIATE RELEASE |
| State Rep. Phyllis Mundy
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Editor:
It should come as no surprise that Terrence Fitzpatrick, president and CEO of the Energy Association of Pennsylvania, advocates for legislation to allow utilities to automatically raise their rates in his June 26 letter to the editor. He is, after all, head of an organization that refers to itself as the "Voice of the Electric and Natural Gas Utility Industries in Harrisburg."
Mr. Fitzpatrick wrote his letter in response to my June 12 guest column on Rep. Robert Godshall’s House Bill 1294, which would allow the Public Utility Commission to approve requests of natural gas, electric and wastewater utility companies to automatically increase their customer rates without having to prove that these increases are necessary.
Mr. Fitzpatrick naturally wrote his letter in support of H.B. 1294, and Rep. Godshall has also responded with a guest column of his own.
One thing the three of us can all agree on is that utility companies must repair and replace their aging infrastructure. However, I stand by my original statement that H.B. 1294 would result in unjustified automatic rate increases. Once utilities obtain the right to raise rates automatically, they would no longer have to prove they need to increase rates on an overall basis - that their increased costs to update or expand their infrastructure outweigh any cost savings or revenue increases.
Neither Mr. Fitzpatrick nor Rep. Godshall dispute this fact in their recent comments on the bill.
Many utilities like PECO Gas have gone 10 to 20 years without a single base rate increase. They have managed to expand and replace infrastructure while saving customers money through the use of new technologies, increased sales, operational mergers and other efficiencies.
Mr. Fitzpatrick and Rep. Godshall are correct that water utilities have been allowed to place automatic surcharges on customer bills for 15 years now. However, that has not prevented water utilities from filing base rate cases for more revenue as Mr. Fitzpatrick and Rep. Godshall seem to suggest. These companies continue to file for base rate increases about every two years.
The PUC recently released an audit stating that PA-American Water Co. could realize an annual savings of up to $2.6 million by following audit recommendations. Assuming that the water company were to save that money, however, those savings do not have to be reflected in their automatic charges on your water bill. H.B. 1294 would give the same latitude to other utility companies.
I agree that ratepayers must pay 100 percent of what it costs to repair or replace utility infrastructure, but they should not have to pay any more than that.
State Rep. Phyllis Mundy
120th Legislative District
Democratic Chairman, House Finance Committee
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