State senator out to kill electric deregulation in Pa.

With PPL’s residential electricity prices expected to jump 34.5 percent when rate caps come off in 2010, one state senator is calling for a halt to deregulation, but local senators have reservations.

Sen. Lisa Boscola, D-Bethlehem Township, asked her fellow senators on Tuesday to “pull the plug on electric deregulation,” saying ratepayers’ $12 billion payment to power companies to secure a competitive market isn’t working.

In 1996, state government worked with the industry to create a roadmap to competitive, affordable energy. Since then, the public and government have upheld their end, she said, but industry has not.

“You have a better chance right now of seeing a UFO in Pennsylvania than you’d have trying to find a real competitive market for electricity somewhere, anywhere, in our Commonwealth,” Boscola’s written remarks said. Power companies “were at the table, they were part of the process, and they did everything they could to cover their assets … if you know what I mean.”

However, local senators were less enthusiastic about scrapping the decade-old plan.

“It’s very easy to comment and take a popular position,” Sen. Raphael Musto, D-Pittston Township, said. “It sounds very well, but how is it going to affect the ratepayer in the long run?”

“There could be some serious downsides, potentially, to her approach. If we just delay without doing anything, we could see even higher prices when the rates come off,” Sen. Lisa Baker, R-Lehman Township, said. “I don’t have a proposal in front of me that does everything that needs to be done.”

Baker said her caucus is looking at ways to phase in the price increases and to reduce energy consumption. “Slowing down the demand will be one way to help keep increases lower,” she said.

That’s because the real problem with the energy issue is the wholesale market, state Consumer Advocate Sonny Popowsky said. The price structure works so that no matter what price companies offer their electricity at, they will be paid the highest price accepted for the power bought during that auction. Large blocks of electricity from cheap producers will be bought at the same price as small blocks bought from expensive producers.

“You can’t go shopping down the block for cheaper kilowatt-hours, but you can use less kilowatt-hours,” he said.

While he agreed that deregulation has caused problems in other states, Fran Cleaver, a member of state Sen. Tommy Tomlinson’s staff who is deeply immersed in the issue, noted waiting would likely spark litigation from power companies. Besides, she said, companies could simply sell their energy in higher markets elsewhere.