PA Electricity Rate Cap Due to Expire in 2010: Consumers Will Suffer

The article, Who Will Pull The Plug on The Rising Use of Electricity? by Marc Levy of the Associated Press carries a sub-heading that says, “In a couple of years, caps expire and rates are expected to soar.

It’s time to pull the plug on electricity waste. And we need everybody to pitch in and do their fair share. The effects of energy waste hurt all of us and the time to end the waste is now.

This is a theme that the Post Carbon Institute, the ECLA PA, and others have been pushing uphill for years. It’s good to see this story in print in the mainstream press. Maybe we’re reaching the crest.

Consumers who use the next three years preparing for a major rate hike will be amply rewarded. Those who wait too long will paty a heavy price. When the rate caps were lifted in Maryland recently the utility proposed an 82% rate hike.

It’s also gratifying to read, “The subject is getting attention this year, and figures to get more this fall, as Rendell ratchets up pressure on the Legislature to approve his sweeping plan to subsidize clean energy projects and cut electricity costs. A pillar of his plan is conservation, and one of the ways he wants to do it has utilities worried.

Rendell wants to require utilities to invest in conservation projects when it’s cheaper than buying more electricity to meet rising demand. The idea is to flatten demand instead of letting it continue to rise every year, advocates say.
“That’s a lot cheaper than building another power plant,” said Sonny Popowsky, the state’s utility consumer advocate.
It also could mean stringing fewer new transmission lines across the land, Popowsky and others say. And at 4 cents per kilowatt hour, conservation programs are substantially cheaper than the 10 cents or so it costs for every kilowatt hour of electricity, conservation advocates say.”
Utilities have been paying consumers to cut demand for decades.

When the local power company in Southwestern Connecticut, Connecticut Light and Power, reimbursed their customers for the incremental (additional costs over the usual) costs of energy efficient devices like compact fluorescent lamps which cost around $25 each in the late 1980’s. This kind of deal gave rise to the now popular saying, “negawatts are cheaper than megawatts.”
Since more than half of all energy used in the northeast is wasted there are ample opportunities to avoid the worst of the rate cap effects. Energy audits and surveys will soon be worth their weight in gold. The roughly $400 cost of a home energy audit could pay for itself in less than a year. Yet few people are aware of the real story of the energy they waste. Few people even know what they pay annually for electricity.

Today, there are a lot more choices for introducing energy efficiency in homes, offices, and factories. A quick trip the the federal government’s “Energy Star” website will demonstrate that point. And today many electrical generators are reaping high dividends for financially helping their customers install energy efficient appliances and other technologies.

Some greedy, regressive power generators prefer to continue the discredited “business-as-usual” strategy. After all, meeting the rising demand for electricity without helping consumers to be energy efficient creates a lot of business and growth for them. And, it helps big coal because that’s where more than half of our electricity comes from. And that’s also where a lot of pollution comes from. It’s a primary source of acid rain, athsma, lung cancer, and other health miseries.

It’s good for the health care system and insurance companies because the commonized, or deferred costs of wasting electricity makes a lot of money for a lot of influential people. It kills and shortens the lives of many of them, too, but they seem to be less concerned than they ought to be. If they vacation often enough in pristine regions like Kennebunkport, west Texas, Santorini, and Cannes their exposure is lessened and superb preventive medical care handles the rest.
If there is a moral to this it might be, “let the consumer beware”. Today it is relatively inexpensive to remediate energy waste. Simple conservation measures like turning off lights that aren’t needed, installing a digital 7 day programmable thermostat, to automatically turn the heat and air conditioning down when buildings are unoccupied can go a long way to cut electricity bills. Energy Star appliances also help. Any refrigerator or air conditioner more than five or ten years old is an energy hog compared to products of todays technology.

As we approach the end of the rate caps there will be a scramble to find the quick fixes. But by then it will be too late for many. In the atmosphere of further deregulation and the end of “caps” it will be a seller’s market. Hapless consumers will pay through the nose for whatever they can get and miss out on energy savings that can be enjoyed today and for the next three years. This savings can buy a lot more efficiency for those who recognize the advantage.

As usual the low-income consumers will suffer most and be least able to pay the increases. Maybe Pennsylvania should consider a remedy already in use in more energy-wise regions of the world. We could ban the sale of incandescent light bulbs and other outmoded, inefficient technologies. In that way, we’d automatically lower home lighting demand by almost 75%, while significantly cutting our electricity bills.
We could require utilities to help their consumers cut energy use. We could require “smart metering” to lower peak demand, a large driver of high electricity rates and the construction of unneeded new generators. We could end the subsidies for coal and include the cost of treating black lung disease as a user fee for anyone burns coal. We could end the commonizing of the incredibly high costs asociated with electricity generation. If we were really efficient we could save a lot of mountain tops in West Verginia and other coal rich states. We could save a lot of rivers and streams. We could save a lot of lives and make life easier for those many of us who live downwind of a coal-fired power plant.
The AP article didn’t offer much in the way of solutions. It conceded that “everyone from governments to owners of large homes has to be willing to undergo a major attitude change in an electricity-loving society”. I don’t think we are conscious enough of our energy use to love electricity that way. We’ll find out what people really love when we see our bills double, and peak oil will see to that in short order with or without lifting the rate caps.
For those of us who love our children and grandchildren the choice, when we think about it, will be easy. The time to think about it is now, while we still have the time, the money, the health, the environment, life as we know it, and choice. On January first, 2011 we’ll all have our fingers in the sockets. How badly we get shocked will depend on whether or not we had the sense to change our bulbs, turn off the switches, and pull the plug on energy waste.

Larry  Menkes's picture

Posted by Larry Menkes on October 1st, 2007 at 7:54 pm | 0 Replies Yesterday’s AP article on the coming expiration of electricity rate caps in Pennsylvania, printed in today’s Intelligencer is tepid warning about what PA consumers will be facing in 2010.

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