Against Wild Winter Utility Bills
9, 2014- Tom Joseph
HARRISBURG- This past winter was one many in Pennsylvania would rather forget,
especially those pushed to the brink by electric bills that nearly broke them
with variable rate electricity plans experienced firsthand how volatile the
market can be when costs aren't locked in and conditions aren't always clear.
Landis, AARP's advocacy manager for Pennsylvania, says those variable-rate
plans are often sold to consumers through deceptive marketing practices that
exaggerate potential savings without laying out the risks.
says legislation on the table in Harrisburg would offer better protection.
is a big problem and House Bill 2104 attempts to address it by capping
variable-rate electric rate increases at 30 percent per month, so no one's
electric rate could increase by 300 to 400 percent," he says.
measure also dramatically reduces the amount of time it takes a consumer to get
out of a variable rate electric plan to a maximum five days.
it requires providers to disclose, on a monthly bill, the rate to be charged in
the next billing cycle.
says the wild price swings are brought on, in part, because more than 350
electricity marketing companies are now actively vying for consumers' business,
and don't have the buying power that larger utilities do.
many cases, these smaller companies don't purchase their electricity the way
that the larger companies do where they're protected by the large volume of
electricity they're purchasing from these kinds of rate increases," he
says House Bill 2104 would add layers of security for consumers in a
marketplace that's becoming more competitive and complex.
in Pennsylvania is probably getting calls and mailers asking folks to switch
their utility service," he says. "With this bill not having been
passed yet, some of the protections that we hope will be there later this year
are not in place yet, so it's definitely needed."