Protecting ratepayers
Other legislation aims to protect ratepayers from predatory billing and other practices that impact residents.
Pennsylvania law allows utilities to recover costs and earn returns on their system upgrades. However, an American Economic Liberties Project report found that utilities have earned returns above their financing costs, and that practice has driven rate increases.
Fiedler announced legislation yet to be introduced that she says would ensure rates of return that investor-owned utilities earn from infrastructure expansion are equal to the demonstrated cost of capital.
“This bill does not tell utility companies that they can’t make profits. It’s simply saying, ‘Please, let’s recognize how hard it is for regular working people in Pennsylvania, and make sure the profit that you are making is in line with returns you could expect elsewhere,’” she said.
The Democratic lawmakers have proposed several other measures that aim to prevent independent electricity suppliers from taking advantage of ratepayers who opt to purchase their power on the retail market through PAPowerswitch.com. State Rep. Heather Boyd, D-Delaware, has introduced legislation that aims to protect these customers from hidden fees, unclear contract renewals that have variable rates and electricity plans they didn’t sign up for.
The legislation, which awaits committee consideration, would strengthen notice requirements before contracts expire, require customer choice when contracts end and eliminate “junk fees.”
“Too many people sign up for electric contracts, expecting one price, a term, and one set of rules, only to get hit later with confusing notices, surprise fees or automatic rollovers that cost more,” Boyd said.
“Your electric bill shouldn’t read like a trap. Pennsylvanians are already juggling higher costs at the grocery store, at the pharmacy, at the pump. So the last thing they need is a utility bill full of fine print, or gotchas.”
PECO’s spokesperson said the utility “strongly supports” Boyd’s legislation.
The lawmakers are also calling for banning so-called “weather normalization adjustments.” The legislation was introduced almost one year ago, but has yet to be considered in the House.
Weather normalization adjustments allow utilities in Pennsylvania to charge or credit bills based on extreme temperatures. Energy companies may include additional charges when the winter is warmer than normal, or apply credits if the summer is unusually cool. Ratepayers have spoken out against the practice, arguing they shouldn’t have to pay for the cost of climate change.
“Basically, our utility and energy companies are telling us that we really don’t care what you’re using. It’s what we feel like charging you,” said state Rep. Tarah Probst, D-Monroe, who is sponsoring the bill. “Although weather normalization adjustments are supposed to even out, they often result in higher than expected winter utility bills for Pennsylvanians.”
POWER Interfaith, a nonprofit which advocates for reduced energy costs, has argued for years that weather normalization adjustments unreasonably penalize residents for reduced energy usage.
The organization said they applaud efforts to protect ratepayers, and urge lawmakers to further address the impacts of climate change on residents.
“Across our congregations, we’re hearing a consistent story: energy bills are rising, and families are being pushed to the edge while they’re already struggling to afford groceries, rent and other basic needs. In too many cases, utility companies are seeing significant profit increases at the same time,” said Randy Libros, an organizer for POWER Interfaith’s climate justice team, in a statement.
“Any serious affordability effort has to both ease immediate financial strain and hold utility providers accountable, so families aren’t left carrying costs they didn’t create.”
While PECO does not currently have a weather normalization adjustment, the spokesperson said the utility believes the mechanism limits high customer bills during extreme cold and heat seasons and is concerned about its potential elimination.