Press Release

PUC Finalizes Three Proceedings as Part of Overall Strategy for Addressing Electric Generation Rates (Continued)

Published on 5/10/2007

Filed under: Electric

(Continued)

Policies to mitigate potential electricity price increases

The Commission developed policies to mitigate and prepare Pennsylvania electricity customers for potential significant price increase that included a $5 million consumer-education campaign.

“This represents an important milestone in the Commission’s efforts to respond to the potential for significant electricity price increases as generation rate caps expire,” said Commissioner Fitzpatrick.  “I agree with the policies established in the Order for consumer education by utilities, energy conservation and reduction in peak demand, alternatives to abrupt price increases, assistance to low-income customers, and the relationship between wholesale energy markets and retail rates. Together with the policies that will soon be established in related proceedings, such as those involving default service rules and demand side response, the Commission is establishing a reasonable, comprehensive framework to help consumers in Pennsylvania deal with the potential for higher electricity prices.”

Many of the comments filed in the proceeding said that consumer education is a vital element of any plan to mitigate price increases. To be consistent with the Public Utility Code, the Commission will include the $5 million in funding in its 2008-09 budget request to be submitted to the General Assembly and the Governor.

The consumer-education campaign assessment will be paid only by electric utilities as electric generation prices will be the focus of the information presented.  These costs may be recovered from customers similarly to the way they recover other costs assessed by the Commission.  The Commission’s Office of Communications is to convene interested stakeholders within 60 days to begin developing the campaign.

Under the plan, the state’s Electric Distribution Companies (EDCs) also will implement consumer-education plans for their service territory that will help mitigate the impact of price increases or educate customers about energy conservation and efficiency, and demand side response.  The plans would be subject to Commission approval and be tailored to each service territory.

The Commission also will:

• Conclude its Investigation of Conservation, Energy Efficiency Activities, and Demand Side response by Energy Utilities and Ratemaking Mechanisms to Promote Such Efforts;
• Consider proposals to avoid large, abrupt retail electric rates on a case-by-case basis;
• Initiate a rulemaking process to modify its Customer Assistance Programs (CAPs) policy statement and regulations to address funding levels and cost recovery;
• Actively participate in the Universal Service Task Force and the Low Income Home Energy Assistance Program (LIHEAP) Advisory Committee to secure state funding for low-income energy customers;
• Address specific requests for Low Income Usage Reduction Program (LIURP) funding increases when opportunities arise; and
• Continue its policy of active participation in federal and regional proceedings that impact electricity prices.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner. For recent news releases, or more information about the PUC, visit our Internet homepage www.puc.state.pa.us.

# # #

Docket Nos.: L-00040169; M-00072009; M-00061597

Contact:

• Press Secretary
  717-787-5722