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Variable Electric Rate Spikes Subject of House Committee Hearing, Says Kauffman
3/20/2014
HARRISBURG – The House Consumer Affairs Committee today held a public hearing to further examine the variable electric rate issue, which resulted in huge spikes in consumer electric bills this winter, said Rep. Rob Kauffman (R-Cumberland/Franklin), who serves as chairman of the committee’s Subcommittee on Public Utilities.

“My office has received numerous phone calls and inquiries about the massive increases in consumer electric bills for those who had variable rate contracts,” said Kauffman. “Although there is inherent risk associated with variable rate plans, testifiers at the hearing today agreed that greater consumer education is paramount, as well as the ability to switch suppliers in a more timely manner than up to the 45 days that it currently takes. Individuals and families who wish to switch energy suppliers, for any reason, should be able to make the switch more quickly.”

Rep. Kauffman’s video comments:


According to expert testimony at today’s hearing, the root cause of the rate spikes was the extremely cold weather the Northeast experienced this winter, which put added stress on the electric grid and resulted in higher energy unit prices.

Consumers on fixed rate plans were immune to the spike increases, but those on variable rate plans experienced incredible rate increases, sometime as much as 400 percent. The Pennsylvania Public Utility Commission (PUC) said it has received approximately 4,800 informal complaints and nearly 9,000 phone calls from irate consumers who are concerned they cannot pay their bills or that they may have been taken advantage of by unscrupulous energy suppliers.

During today’s testimony, the PUC said it is investigating consumer complaints and working with consumers and energy suppliers to resolve any other outstanding issues.

Furthermore, the PUC said it is actively working to ensure there is greater consumer education and notification pertaining to variable and fixed rate plans. It is also working to have the ability to expedite the switching of consumers from one energy supplier to another.

“Although variable rate plans have their place in the market, they are certainly not for everyone,” said Kauffman. “Consumers need to better understand the contracts they sign with their energy suppliers. To that end, we need to make certain the marketing and disclosure information coming from electric generation companies is more straightforward. Far too many Pennsylvanians have been caught up in the predatory tactics of some bad actors in the electric generation market. We will work with the PUC and through legislation to make certain this situation doesn’t happen again.”

If a consumer believes he or she is paying a rate that is inconsistent with his or her supplier contract, it is suggested the person contact the supplier and attempt to resolve the issue. If the supplier is unable to resolve the complaint or is unresponsive, the consumer can go to www.puc.state.pa.us to file a complaint with the Public Utility Commission through its website or call 1-800-692-7380.

Consumers who believe the competitive supplier has violated Pennsylvania’s Unfair Trade Practices and Consumer Protection law or has engaged in price gouging, can file a complaint with the attorney general’s office at www.attorneygeneral.gov or call 1-800-441-2555.

Kauffman noted that in addition to the PUC’s efforts, he is also the co-sponsor of legislation that would require specific information be contained in all supplier contracts and that the information is provided in an easily readable and understandable manner. The bill also would place a cap on the amount by which a rate may change under a variable rate contract, prohibit cancellation and early termination fees for variable rate contracts, require the posting of current and historic rates on the PA Power Switch website and reduce the amount of time it takes to switch electric generation suppliers.

House Bill 2104 is currently before the House Consumer Affairs Committee for consideration.

Representative Rob Kauffman
89th District
Pennsylvania House of Representatives

Media Contact: Tricia Lehman
717.772.9840
tlehman@pahousegop.com  
RepKauffman.com

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