37% if you’re on PPL, 50% if you’re on Penelec / FirstEnergy, and 54% if you’re on MetEd / FirstEnergy. Courtesy of the companies who were caught with their pants down during last winter’s ice storm, my $55-a-month electric bill will soon be $84.70. The utility companies would have you believe that they’re on the verge of bankruptcy due to the soon-expiring rate caps, but a cursory review of their annual SEC filings suggests quite the opposite.
I’m hesitant to recommend government intervention in a capitalist economy. Market forces should generally be relied upon to keep prices in check. But electric companies — like the phone companies — have enjoyed being monopolies for decades. Starting about ten years ago, you actually can choose a different generation company, but you’ll still pay a fee to your local electric company for the priviledge. Worse, most consumers still either aren’t aware of PA Electric Choice, or aren’t served by a competing company. The exact extent to which those factors harm competition can be debated in volumes, but at the end of the day, we still have price gouging on the horizon.
Really; in what other industry would this work? What if Sheetz, Exxon, and Sunoco got together with the local fuel distributors and agreed to raise gas another 50% to $6 / gal? What if AT&T, Verizon, T-Mobile, and Sprint all got together and greed to raise the average consumer’s bill 50% to $75? What if Giant, Weis, and Karns got together and decided to raise the price of everything 50%?
There is one big difference between the electric companies and the phone companies mentioned two paragraphs up. The ILEC phone companies (SBC, Verizon, etc) are in bad shape. They’ve been bleeding subscribers for years. With the explosion in wireless usage and the advent of VOIP, customers have finally said “enough!” to awful customer service and arcane billing practices and are dropping their home phones in droves.
But since we’re not at the point where solar power, wind turbines, or other alternative forms of electric generation are practical at large scales, and since nearly everybody needs electric power, it may be time to re-introduce government intervention.
ABC27 published a response from PPL, in which PPL stated that re-introducing rate caps would be bad for consumers.
Sure it would.