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Many Pa. electric customers feeling rate shock

Published on NewsOK Modified: March 9, 2014 at 11:02 am •  Published: March 9, 2014
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JOHNSTOWN, Pa. (AP) — When a third-party power generation supplier tempted Robin Hagins with a low rate in 2012, it was too good to pass up.

Then, this winter, temperatures plummeted. And the Upper Yoder Township woman's electric bill seemed to rise just as fast.

"When I opened my bill, I was in complete shock," Hagins said.

The bill: $756.23.

"I thought it was an error," she said.

No such luck.

While the monthly energy usage in her three-bedroom home hardly budged from January, her invoice was $520 higher than the month before, she said.

As it turns out, she wasn't alone.

Thousands of electricity customers statewide enrolled in variable rate plans are outraged about their February bills, which have doubled and in some cases, tripled, from the month before.

Who's to blame?

Third-party suppliers and others in the industry agree that Mother Nature's frigid temperatures deserve at least some of the blame. Much of the country has faced near-record cold. And when temperatures dropped, demand surged.

But the mammoth bills also have attracted the state attorney general's attention.

The Public Utility Commission also is considering options that would further regulate marketing practices used by companies participating in the state's Electric Choice program - one that more than 2.2 million customers in the state enrolled in as of a month ago, the program's website shows.

"These spikes in the price of electricity are alarming and have put many consumers ... in a dire situation," Attorney General Kathleen Kane said. "We are looking at these price increases and will be prepared to take action to protect affected customers."

Dozens of suppliers, such as Pennsylvania Oil & Gas, NextEra Energy Services and IDT Energy - Hagin's supplier - serve the Cambria and Somerset areas alone. Through the state's deregulation on the electric supply side of the industry, customers can choose from a growing pool of providers that compete for customers' business or stick with current providers such as Penelec or Pennsylvania Rural Electric for both distribution and transmission.

The nation's suppliers have blamed frigid temperatures for the increased costs. But they say blame also falls on the nation's energy transportation system, citing "inadequate" electric grids and gas pipelines that get congested when demand spikes.

"What customers are feeling are the results of a strained transportation and infrastructure system that delivers electricity and gas," the American Coalition of Competitive Energy Suppliers said in a media release.

"The underlying driver of the price spikes has been the eight-fold increase in electric costs in the wholesale market," added William Ulrey, an IDT Energy spokesman.

Ulrey said the price his company paid for energy on Pennsylvania's hub - or power transmission market - jumped from $50 per megawatt hour to more than $400 "as a result of an unexpected demand surge."

He said his company is committed to resolving customer complaints "to the best of our ability" and directed IDT customers to call their toll-free customer service line at 877-887-6866.

A scan of variable rates offered this week by generation suppliers serving the Johns-town area produced wide-ranging price quotes through the PUC's Pa. Power Switch website.

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