Preparing consumers for rising power prices

By Kim Leonard

Thursday, May 8, 2008

Monthly electric bills may rise by a few cents soon, so that utilities can teach customers how to trim their power costs.

Sound contradictory? Here's the gist: The state Public Utility Commission last year told electric distribution companies to come up with education plans to help consumers save on electricity, as the capped rates imposed under the state's 1996 deregulation law continue to expire.

Utilities serving Western Pennsylvania say they will spend $340,000 to $776,000 this year on programs ranging from savings tips on bill inserts and Web sites to elementary school lectures and displays at home shows.

Three of the plans -- including Greensburg-based Allegheny Power's -- have tentative PUC approval, including an OK to surcharge customers for the costs. After a comment period ends on June 6, the PUC can make the orders final or put the plans through a hearing process.

Duquesne Light, Penn Power and three other utilities, meanwhile, are awaiting tentative approvals of their plans, which the PUC returned with questions, spokeswoman Denise DiNunzio said Wednesday.

David Hughes of Squirrel Hill-based Citizen Power said the PUC's efforts fall short. "It is kind of ironic that you're going to be doing things to reduce customers' costs, and charging them a fee," he said.

Electric bills in some parts of Pennsylvania have soared in recent times, as the artificially low rates under deregulation were replaced with new ones that reflect market-rate prices.

State Consumer Advocate Sonny Popowsky sees value in the education plans, especially for customers of companies like Allegheny Power who, for decades, have enjoyed the lowest prices going.

Allegheny Power's cap expires at the end of 2010. Customers "should be thinking now that on Jan. 1, 2011, your rates are going to go up substantially," he said.

While customers can't control that, they can buy energy-efficient light bulbs now, or if they need a new refrigerator, say, they can choose one that eats less power.

Hughes, a longtime critic of deregulation, called for changes to the law when the PUC held hearings in 2006 hearings on how to soften the blow of rising electric costs.

When the PUC called for education efforts, "We were kind of shocked," he said. "Customer education is not sufficient to deal with these things."

Allegheny Power, which has gradually raised rates in recent years, would spend almost $776,000 on education this year, and $8.2 million in all through 2012, on its plan that involves the South Side-based Dollar Energy Fund in outreach programs, and includes bill inserts and mailings.

Surcharge costs haven't been set, spokesman Doug Colafella said, and they'd differ for residential and business customers. Still, the total tab divided by the company's 710,000 customers comes to about $11.60.

Duquesne Light's rate caps ended in 2002, and bills still are lower than 15 years ago. The Downtown-based utility plans to spend $622,000 this year to continue its "Watt Do You Know?" classroom lessons and other education efforts for its 585,000 customers.

Penn Power could spend $340,000 on programs for its 158,000 customers, though figures are preliminary, spokesman Scott Surgeoner said.

DiNunzio said the best education plans will inform customers when and how their rates may change, and tell them how to control their bills "through energy efficiency, conservation and demand-side response measures."

Kim Leonard can be reached at or 412-380-5606.

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