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Pennsylvania PUC announces new variable-rate regulations for electricity suppliers

By: Michael Sanserino |

Pennsylvania’s Public Utility Commission unveiled a new set of regulations today aimed at electricity suppliers that sell variable rates, a response to thousands of consumer complaints about unexpectedly high electricity bills this winter.

The new regulations, which must be approved by the state Attorney General’s office and House and Senate committees in the General Assembly, seek to give consumers more information about rate plans they adopt.

“It’s called truth in advertising – making sure that the disclaimers are approved and affirmatively signed off by the customer, that they knowingly understand those terms,” PUC Chairman Robert Powelson said in a statement, “and we think today’s actions really set the stage for greater notification to customers. In the age of transparency, we think that’s a good thing.”

Included in the proposed regulations: clearer contractual language about the volatility of variable rates, improved notifications for contract expirations, and better customer access to historical pricing data, among other modifications.

The new regulations are in response to thousands of customer complaints stemming from this winter, when a bitter cold snap put a strain on the electricity grid and sent prices on the spot market skyrocketing.

For some customers, electricity prices increased by more than 300 percent compared to an average winter month.

More than 9,100 residents contacted the PUC in February and March with concerns about electric supply prices. More than 5,700 filed formal complaints with the PUC.

In all of 2013, about 1,300 Pennsylvania electricity consumers filed such complaints.

Variable rates, unlike fixed rates offered by default electric utilities such as Duquesne Light and West Penn Power, rise and fall with the daily energy market. Often, this results in savings for customers, as companies with fixed rates tend to recoup high costs in the winter with higher rates in the off-season.

The commission launched an expedited rule-making proceeding March 18, seeking comment on some proposed regulations.

In addition to the PUC, the Pennsylvania Attorney General’s office and the General Assembly are separately investigating the variable rate problems many experienced this past winter.