Power (not) to the people
Several large power suppliers were as merciless as the brutal winter this year, gouging many thousands of Pennsylvania consumers through variable-rate contracts that produced utility bill increases of up to 600 percent.
The industry pretty much shrugged its shoulders amid the justified outrage that attended the vastly higher bills. It cited market conditions produced by unusually cold weather for prolonged periods and, well, a contract is a contract. The PUC announced new regulations in April requiring clearer contract language and enabling consumers to switch suppliers.
There was little public examination of the marketing or regulatory framework that led to those contracts. Lawmakers harrumphed and placed the badly needed consumer reforms on their vast pile of unfinished business.
Now, state Consumer Advocate Tanya McCloskey and Attorney General Kathleen Kane have filed complaints with the PUC, asking the regulatory body to suspend or revoke the state licenses of four companies that marketed the variable rate deals - Energy Providers Inc., doing business as Pennsylvania Gas & Electric; IDT Energy Inc., Respond Power LLC and Blue Pilot Energy LLC.
Ms. McCloskey and Ms. Kane allege that the suppliers marketed low or "competitive" rates, but that the prices ultimately charged to consumers did not reflect the actual costs of delivering the electricity.
The PUC alone received more than 7,000 rate complaints from consumers during the winter, including from some who said that they automatically were switched into a variable rate program when their fixed-rate contracts expired. The agency is investigating such a complaint against Pennsylvania Gas & Electric.
As the cases continue, the Legislature should bass a pending bill to strictly cap rate increases under variable rate contracts, and to ensure that prices bear some resemblance to the actual costs of acquiring and distributing power.