How Legislators Are Increasing Your Electricity Bill

Pennsylvania electricity consumers are in danger of a triple whammy. Three separate energy policies are likely to increase your electric bill (not even counting federal Cap and Trade legislation, which President Obama has already noted, “will necessarily cause the price of electricity to skyrocket).

• Rate Cap Extensions: In less than a year, customers in central Pennsylvania will probably see an increase in their electricity bills as rate caps expire and consumers pay the actual price of electricity. If the General Assembly successfully passes rate cap extensions it will only cost consumers more in the long run.

• Conservation Mandates: In 2008, legislators passed Act 128, which requires utilities to cut electricity consumption to a level that is almost impossible to obtain without manipulating consumer behavior (most likely through rate increases).

• HB80: Now the General Assembly is considering a third mandate that will increase the cost of electricity by increasing the Alternative Energy Portfolio Standards for companies producing electricity, and implement a carbon sequestration network in PA. The requirements would force investments in expensive solar and wind generation, while cheaper coal energy (one tenth the cost of a solar PV unit) would be discouraged. Of course, wind and solar are intermediate power sources, meaning they require back up generation, often in the form of natural gas or coal power.

HB 80 would require 33% of electricity produced in Pennsylvania to come from alternative sources by 2021 (including 3% from solar power), this is an 83% increase over what the standards that have barely begun being implemented call for. Today only about 6% of energy comes from those defined as alternative sources by the state, and about 0.01% from solar.

It’s not just the rising cost of electricity in the short term that is a concern. Deregulation efforts designed to give consumers more choice and spark competition have been stunted through regulations like HB 80 because they work against market forces and skew the playing field in favor of more expensive technologies regardless of consumer demand. Policymakers cannot accurately predict what technologies will exist or be economically viable in 20 years.