Residents anxious about power bills

January 04, 2009|By JENNIFER FITCH

WAYNESBORO, Pa. -- Rate caps in place since Pennsylvania deregulated its electric industry in 1996 will expire at the end of 2010, leaving many customers anxious about how their power bills will be affected.

For residents of Chambersburg and Mont Alto boroughs, the full conversion to a market rate will go mostly unnoticed because their municipalities buy power wholesale.

"There will be some (changes), but for right now, it'll be pretty fluid. It won't be much like people are anticipating in other places," said Tom Lowson, a Mont Alto councilman.

Elsewhere in Franklin County, Allegheny Power customers can expect an 11.9 percent increase in rates effective last Thursday. That increase was put in place to partly mitigate the potential for a dramatic increase in 2011.


"For a customer using 1,000 kilowatt hours, the increase will be $9.34," Allegheny Power spokesman Jeff Straight said.

The power company has raised rates every year since 2006 in an attempt to bridge the gap from the regulated rate to the market rate, according to Straight.

However, the past two rate increases were each about 5 percent, so the 11.9 percent will hit customers' wallets harder. Straight said initial estimates are that the 2010 increase won't be as high.

The market price of energy largely depends on the price of its coal production, Straight said.

"It's determined through a competitive bidding process," he said.

Chambersburg and Mont Alto have current contracts with DTE Energy of Michigan.

"We don't have any rate caps. ... The borough has been reflecting the additional cost of doing business over the past six years," said Ron Pezon, assistant superintendent of electricity in Chambersburg.

Chambersburg customers aren't without a rate increase for 2009 and can expect their increase to be between 15 percent and 20 percent. Pezon said borough officials hope it will be the last significant increase for some time.

The 1996 law that created rate caps was designed to allow electric companies to compete for customers. Corresponding rate caps were meant to protect customers from sudden, dramatic increases on their bills.

Did you know?

Starting in a few months, Allegheny Power customers in Pennsylvania will be able to purchase wind-produced energy. Customers can buy 100 kilowatt hours for $2.50 more than their regular rate.

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