HARRISBURG — Deregulation of electric rates in 2010 in many areas of the state could constitute “the biggest tax increase in Pennsylvania history,” state Senate Democrats said yesterday.
Since 1996, the rate at which many Pennsylvania energy companies have been able to recoup power plant construction costs from consumers has been capped.
But by 2010, the rate caps will expire for customers in parts of western Pennsylvania served by West Penn Power, plus many residential and business customers in northeast and central Pennsylvania, along with the Lehigh Valley and Philadelphia areas. Rate caps for Duquesne Light already have ended.
“Nobody is going out of business” in the state’s electricity industry, said Sen. Vincent Fumo, D-Philadelphia, noting high profit margins and well-salaried executive of electric utilities. “[Allowing these caps to expire] would be the biggest tax increase in the history of the Commonwealth since Ben Franklin.”
He was joined in his criticism by Democratic Sens. Jim Ferlo of Highland Park, Wayne Fontana of Brookline and Sean Logan of Monroeville.
“Utility shutoffs have already risen 37 percent compared to last year,” said Mr. Logan. “Unless we take decisive steps soon, I fear for how many people will be unable to pay and will have their electricity shut off when deregulation hits its statewide peak in 2010.”