News

July 13, 2009

Rate hikes power his candidacy

Dem governor hopeful Knox hopes outcry over electricity prices can lead to 2010 win.

With electricity prices scheduled to jump steeply as rate caps continue to expire in the next few years, Democratic gubernatorial candidate Tom Knox is banking on a public outcry to help carry him to Harrisburg.

Knox’s campaign for the 2010 election has paid for a Web site called “Stop the Pennsylvania Rip-off!,” where voters can sign a petition that calls on legislators to “stop deregulation and protect Pennsylvania families.” The site went up in March, according to Knox’s campaign manager, Josh Morrow.

“We’re going to take this petition up to Harrisburg,” Morrow said. “We’re telling Harrisburg that they need to act now.”

The issue stems from legislation signed in 1996 that deregulated the generation portion of customers’ electricity bills. In exchange for billions of dollars to pay for the power plants they were given, the energy providers were saddled with a decade of rate caps to keep prices low while a competitive market formed.

In reality, however, the low rates stymied such a market because no consumer demand existed to create competitive options. Now that the rate caps are expiring, consumers are being exposed to market rates with little capability to shop around.

Besides the petition, the site also mentions Knox’s plan for alleviating the increases, though it doesn’t call for ending deregulation, as his petition advocates. He has three proposals: a three-year price-increase cap, the creation of a state authority to purchase power in bulk, and added consumer safeguards.

The cap would limit increases to inflation plus 1.5 percent for the next three years to create breathing room for a detailed investigation without squeezing ratepayers. The safeguards would prohibit cutting power in the winter to delinquent accounts and make restoring power easier by reducing the restoration deposit.

The key, however, would be creating the purchasing authority that would buy power in big blocks for the state’s millions of residents. “We’d be able to acquire (energy) … at below-market rates and pass that savings along,” Morrow said.

The site claims it already has 2,140 petition signers and is looking for at least 10,000. Morrow said the hindrance simply has been publicity and that when the word gets out, he predicts the goal will be reached quickly.

Morrow said Knox, a Philadelphia businessman who made his money in insurance and banking, is committed to the electricity issue. “Part of it is the reason he wanted to run. We looked at this and said, ‘No one’s doing anything about this,’ ” Morrow said.

Morrow said the campaign has heard from industry that the increase “is going to put manufacturing out of business in Pennsylvania.” It’s also heard complaints from the energy industry about needing and deserving the increase, Morrow said, but Knox is unsympathetic.

“When these companies are making a lot of money in a regulated market, why do you need to deregulate?” he questioned.

“They’re going to give their money to our opponents, and that’s fine with us. … (Knox) is not going to allow big utility companies to take advantage of anybody in the state,” Morrow said.

TO LEARN MORE

To take a look at gubernatorial candidate Tom Knox’s petition for the state legislature to address expected electricity rate hikes, go to: www.stoptheparipoff.com.

Rory Sweeney, a Times Leader staff writer, may be reached at 970-7418.

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