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Protection Against Wild Winter Utility Bills
June 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 financially.

Consumers 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.

Ray 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.

He says legislation on the table in Harrisburg would offer better protection.

"This 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.

The 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.

And it requires providers to disclose, on a monthly bill, the rate to be charged in the next billing cycle.

Landis 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.

"In 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 explains.

Landis says House Bill 2104 would add layers of security for consumers in a marketplace that's becoming more competitive and complex.

"Everyone 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."

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