Pennsylvania Businesses Appeal to Governor on Rate Caps

National and Pennsylvania-based businesses are urging Pennsylvania policymakers to allow competition in the state’s retail electricity market to flourish.  The businesses -- which collectively represent 1387 facilities and 97,941 workers in Pennsylvania and purchase more than $125 million of electricity annually in the state -- asked Governor Rendell and all state policymakers for their “support for a competitive energy marketplace for the region by allowing the wholesale and retail electricity markets, with independent oversight, to continue to grow.”

In their letter, the businesses urged lawmakers to oppose legislation that would extend rate caps because of the negative impact these caps can have on reliability and costs. They referred to California’s rolling blackouts and market instability as examples of the unintended consequences of rate caps and voiced support for an orderly transition to a competitive electric market.

“When California capped retail electric rates during a time of rising wholesale rates the result was disastrous,” the letter states. “The state suffered rolling blackouts and lost thousands of jobs. Because utilities collected $11 billion less than they paid for electricity, one went bankrupt and another narrowly escaped bankruptcy. The State was forced to step in and purchase power at peak rates resulting in billions of dollars in higher rates for Californians.

The signatories to the letter included representatives from: 7-Eleven, Inc.; ACME MARKETS, a SUPERVALU Company; Best Buy Co. Inc; Big Lots Stores, Inc.; Einstein and Noah Corporation; J. C. Penney Company, Inc.; Leggett & Platt, Inc.; Macy’s, Inc.; PetSmart, Inc.; Safeway Inc. / Genuardi’s; Wal-Mart Stores, Inc.; and Yum! Brands, Inc.

COMPETE, a national coalition promoting the continued evolution of competitive electricity markets, commended the businesses for their efforts.
 
“As electricity prices rise due to surging fuel costs it is no wonder that competition is up for discussion, but extending rate freezes will only temporarily mask the true costs of generating and delivering electricity,” said Joel Malina, Executive Director of COMPETE.  “Pennsylvania is at the forefront of competitive electricity, paving the way for other states to pursue self-determined energy markets. These businesses recognize the value of choice, and how the ability to manage your own energy supply ultimately benefits consumers statewide,” said Malina.
 
A copy of the letter to Governor Rendell can be found below.