PECO senior vice-president Lisa Crutchfield explains:
It [extending rate caps] would force us to purchase generation supply at market prices but then sell to our customers at capped rates that are below market price. We would estimate that in three to four months after the end of our transition, we would file for bankruptcy.
Thankfully many legislators understand that expensive electricity is better than no electricity. Phasing in higher rates appears to be a popular solution among lawmakers and power companies including PECO. Meanwhile, the PUC continues to ignore PPL’s own phase-in plan. The proposal introduced in December allows PPL customers could choose to make additional payments before rate caps expire.
There is no simple answer to rising energy prices, but one thing is clear. Deregulation consistently lowers costs, examples include the transportation and telecommunications industries.