Like most Pennsylvanians today, you're probably struggling to fill up your gas tank and your grocery cart at the same time. You know we're having an energy crisis when gas is at 4 dollars a gallon and milk and bread costs twice what it used to.But, the REAL crisis for Pennsylvanians is not even here yet - it's about 18 months away. That's when, beginning in 2010, rate caps will come off for Pennsylvanian's 5 largest energy companies.
Together, these 5 power companies serve 85% of all of the electric customers in our Commonwealth. Once the caps are lifted, electric rates will immediately increase between 50%-60% for every residential customer, every small business owner, and every large manufacturing plant we have across our state.
Family budgets will be decimated. Small business owners will not be able to absorb 50% higher costs and they certainly won't be able to pass all of it along to their customers. So they will go OUT of business.
But, that's only part of the real economic train wreck that will happen. Industrial customer will see their electric bills double! That's too big of a hit to the bottom line for even our biggest companies to absorb "job-killing rates" that high.
As if that's not bad enough, school districts will have to raise property taxes to be able to pay their higher electric bills. Hospitals will be forced to raise the price of health care. And every local borough and municipality will be forced to raise taxes to keep their streetlights on and provide services to the residents they serve.
Instead of delivering real competition, more customer choice and lower electric prices, electric deregulation in 2010 guarantees just 2 things: record rate increases and record company profits.
That's because there is no competitive market in Pennsylvania for electric customer to shop around, make an informal choice, and get a better deal. The PJM grid is an "organized market" of energy producers. It operates like a cartel, just like OPEC countries in the Middle East set the price of oil as high as they want.
That's why I've proposed extending the rate caps for 2 more years while we work on a resolution that guarantees reasonable company profits and fair and reasonable rates.
Forcing customers to pay 60% higher electric bills has nothing to do with "rising fuel costs" or with keeping any of the these huge, global conglomerates from "going bankrupt." As far as "supply and demand" goes, Pennsylvania is an electricity EXPORTING state! We produce more electricity than we consume!
These huge rate increases have nothing to do with anything except run-away profiteering and pure greed.