A House lawmaker worries two new regulations will further stall legislation that caps price increases on variable rate electricity contracts for residential customers to just 30 percent in one billing cycle. Without that rate cap, Rep. Robert Godshall, R-Montgomery, says his constituents won’t receive any relief from fluctuating electricity bills that can double and triple in just one month. “You’re still going to get burned,” he said. “The only thing that will stop this is a 30 percent rate cap.” The cap is in House Bill 2104, which Godshall introduced in March, six weeks after two polar vortexes spiked wholesale electricity prices and smacked customers signed onto variable rate contracts statewide with bills in excess of $1,000. Many of those residents, Godshall says, didn’t realize the terms of the contracts to which they committed — or worse, didn’t know their expired fixed rate agreements had been switched to variable terms. Consumers lodged close to 10,000 informal complaints with the Public Utility Commission,who responded with two regulations of their own designed to benefit both consumers and the retail electricity market lawmakers established more than a decade ago. But the regulations — passed unanimously Thursday by the Independent Regulatory Review Commission — don’t address the problems associated with variable rate contracts at all, Godshall says, which can inflate prices daily based on demand. The new regulations will require energy suppliers to provide customers with accelerated switching times between electricity contracts and provide beefed-up disclosure policies that alert customers to a change in terms at the end of a contract period.
Opponents of the regulations — including House Speaker Sam Smith, R-Punxsutawney, and House Consumer Affairs Minority Chairman Peter Daley, D-Washington, who each sent letters to the IRRC — say accelerated switching times, while beneficial, will be costly for suppliers to implement in the next six months. That cost, Smith wrote, could be passed onto the consumer — a concern electric distribution companies, including PPL Electric Utilities, echoed in a letter to the IRRC. IRRC commissioners say the regulations will provide interim relief until lawmakers pass legislation that could give the PUC authority to implement rate caps — something Chairman Robert Powelson says he personally opposes. “We haven’t had an internal discussion about rate caps,” he told IRRC commissioners during Thursday’s meeting. “I’m personally opposed … I think the market will respond accordingly to these new regulations.” Powelson insists the regulations will provide a mechanical fix that “will go a long way” toward shielding customers from the volatility of the wholesale electricity market. Godshall remains unconvinced. “The disclosures and the transparency and the education is fine,” he told IRRC commissioners. “If you can get people to read.” IRRC Commissioner Lawrence Tabas said regulations shouldn’t be designed to free consumers of all responsibility and discourage them from reading their contracts. “These regulations don’t go far enough or address any of the issues,” Godshall said. “Consumers have no control. They are at the mercy of 355 companies licensed to sell variable rate contracts by the PUC … I’m not sure consumers are being protected.” Powelson rejected the notion that some companies take advantage of residents without consequence, saying that the PUC fines offending suppliers and continues to investigate the variable rate electricity market as a whole.“We have taken this issue very seriously,” he said. The House delayed a final vote on Godshall’s legislation two weeks ago. Smith said in a letter to the IRRC that the bill could come up for another vote next month.