Testimony of State Rep. Mark B. Cohen to the Act 129 Hearing

July 29, 2009-Philadelphia, Pennsylvania

 

            Tonight I want to suggest that this proceeding and the Pennsylvania Public Utility Commission take special notice of a specific situation in the PECO service area and take appropriate action in modifying and implementing the Act 129 Plan.

 

            IF you were to take a look at PECO’s electric tariffs, or rates, on file with the Pennsylvania Public Utility Commission- and available on the internet- you will note a special tariff, or rate, called the RATE RH RESIDENTIAL HEATING SERVICE.  Under this special rate, consumers who have all electric heat receive a lower rate for higher use.

 

            Rate RH is available for homes that are heated by specified types of electric space heating systems. The systems eligible for this rate are permanently connected electric resistance heaters where such heaters supply all of the heating requirements of the dwelling or heat pump installations where the heat pump serves as the heating system for the dwelling.

 

            Unlike regular rates which have an energy and capacity charge of 6.6 cents/kw for all electric use, under rate RH, the electric heating rate starts at 6.85 cents but after 600 kilowatts of use, the rate drops almost in half to 3.89 cents per kilowatt.    This electric heat discount is helpful to consumers who used electric resistance heaters, which can also be described as baseboard heaters, because these baseboard heaters can use tremendous qualities of electricity even to heat a small room in the winter.  I have included a spreadsheet from US Department of Energy’s Energy Information Service to demonstrate the high cost of the electric resistance heat.

 

            Unfortunately, it is my understanding, that when the rate caps come off, the discounted rates for electric heat use will disappear, with disastrous impacts on many Philadelphians who now rely on electric baseboard heat.   While every customer in the PECO area will face increase rates when the caps expire, electric heat customers may face close to a doubling of their rates over three years.

 

            It is my suggestion that in reviewing this Act 129 Plan, special attention be given to identifying those customers in this service territory who are using baseboard electric heat or other electric resistance heating sources.  First, there should be significant outreach done as soon as possible to identify these customers.   Second, there should be a focused effort to assist these customers, particularly – but not exclusively - those who qualify within the low-income designation as defined by the Act in converting to more cost effective method of heating their homes.  Such assistance should include both loans and grants as well information and education outreach.   Such assistance makes financial sense given the savings in energy use to the consumer and the utility.

 

            I understand that the Act 129 process includes reviewing lists of options and calculating formulas from a broad menu of energy efficiency choices that a customer may chose from if they are interested.   That is fine, but for these specific electric heat customers, Government and utilities need to be much more proactive, because the status quo will lead to up to an unacceptable doubling of electric bills and continued use of baseboard heat. 

 

            There may be other Commission based venues where the transition to the end of the rate caps will be discussed.   However, the topic of this commission hearing is to discuss options to reduce electric use.    We should provide significant focus in the proposed Act 129 plan on reducing electric use in homes where the current heating methods are the most inefficient and where electric rates are going to rise the most.   These plans should also target those low-income customers who will be most significantly affected by the rate increases to reduce their electric use.  In the final analysis that is the public policy goal of Act 129. 

 

            I may not be able calculate the energy efficiency of this effort at this point because I don’t know how many consumers in this service territory use electric base board heat and how much electricity those heating systems use.    But the Commission and utilities in this case, clearly do have the ability to disclose this information and put together a plan to help these electric heating customers reduce their electric use before their electric rates come close to doubling.

 

            I thank you for your consideration of this matter and I look forward to the continuing efforts in this important matter.

           

HEATING FUEL COMPARISON CALCULATOR

7/14/2009

 Version:    HEAT-CALC-Vsn-D_1-09.xls

This "calculator" can be used to compare residential heating fuel prices and costs.  To use this calculator, enter information into

 

the yellow-colored cells as necessary. The information in the green cells is calculated for you. Scroll down to see all

 

information on this page. Detailed instructions are provided in the Instructions (click on tab at bottom of your screen).

Contact local suppliers for most accurate prices.  This calculator will not provide an estimate of the cost to heat your home.

 

Fuel Type

Fuel Unit

Fuel Price Per Unit (dollars)

Fuel Heat Content Per Unit (Btu)

Fuel Price Per Million Btu (dollars)

Heating Appliance Type

Type of Efficiency Rating 4

Effiency Rating or Estimate

Approx. Efficiency (%)

Fuel Cost Per Million Btu (dollars)

Fuel Oil (#2)

Gallon

$2.57

138,690

$18.53

Furnace or Boiler

AFUE

78.0

78%

$23.76

 

 

 

 

 

 

 

 

 

 

Electricity

KiloWatt-hour

$0.16

3,412

$46.89

Furnace or Boiler

Estimate

98.0

98%

$47.85

 

Air-Source Heat Pump 5

HSPF 5

7.7

226%

$20.78

 

Geothermal Heat Pump

COP

3.3

330%

$14.21

 

 

 

 

 

Baseboard/Room Heater

Estimate

100.0

100%

$46.89

 

 

 

 

 

 

 

 

 

 

Natural Gas 1

Therm 2

$1.26

100,000

$12.61

Furnace or Boiler

AFUE

78.0

78%

$16.16

 

Room Heater (Vented)

AFUE

65.0

65%

$19.40

 

 

 

 

 

Room Heater (Unvented)

Estimate

100.0

100%

$12.61

 

 

 

 

 

 

 

 

 

 

Propane

Gallon

$2.25

91,333

$24.66

Furnace or Boiler

AFUE

78.0

78%

$31.62

 

 

 

 

 

Room Heater (Vented)

AFUE

65.0

65%

$37.94

 

 

 

 

 

 

 

 

 

 

Wood 3

Cord

$200.00

22,000,000

$9.09

Room Heater (Vented)

Estimate

55.0

55%

$16.53

 

 

 

 

 

 

 

 

 

 

Pellets

Ton

$250.00

16,500,000

$15.15

Room Heater (Vented)

Estimate

68.0

68%

$22.28

 

 

 

 

 

 

 

 

 

 

Corn (kernels)

Ton

$200.00

16,500,000

$12.12

Room Heater (Vented)

Estimate

68.0

68%

$17.83

 

 

 

 

 

 

 

 

 

 

Kerosene

Gallon

$3.24

135,000

$24.02

Room Heater (Vented)

Estimate

80.0

80%

$30.03

 

 

 

 

 

 

 

 

 

 

Coal

Ton

$200.00

22,069,000

$9.06

Furnace/Boiler/Stove

Estimate

70.0

70%

$12.95