Broke in Philly

Could electric bills in PA become more affordable? This agency holds the key

All the info you didn’t know you needed about the Pennsylvania Public Utility Commission.

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Mark Henninger / For Billy Penn
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On a scale of one to pocket-depleting, how would you rate your utility bills?

The monthly salary deduction also known as your electricity payment can feel even more draining in the summer, while the gas bill spikes during cold season. But there’s good news: a state agency is considering setting a new limit on how much public utilities can charge relative to a customer’s annual income.

The bad news: they’ve been mulling over this same idea for something like two years now — and there’s still no resolution in sight.

Every time you submit your hard-earned cash to the HVAC gods, you probably wonder, Who sets these prices in the first place? The answer is the Pennsylvania Public Utility Commission, a little-known governing body that has almost all the power over regulating service in the state.

The five commission members (and their ~500 employees) have a ton of responsibility, from setting rates to maintaining cyber security among utility agencies — but few Pennsylvanians even know they exist.

So what’s up with the PUC, and are they about to lower your bill?

What exactly is the Public Utility Commission?

Headquartered in Harrisburg — shoutout to the satellite office at 8th and Market — the PUC manages roughly 7,000 public utilities in these various categories:

  • Electricity
  • Natural gas
  • Phone
  • Water
  • Steam heat
  • Disposal of wastewater/hazardous materials
  • Some transportation

With five commissioners and hundreds of staffers in tow, the bill-setting behemoth has the broad power to determine rates, ensure widespread access to service and hold utilities to a standard of safety.

The board was founded in 1937, when the General Assembly replaced the previous Public Service Commission with the PUC to better “supervise and regulate” the state’s collection of public utilities.

How much money do they get to spend?

The Commission’s budget for the 2018-19 fiscal year was $80,252,000. (Roughly 718,000 times the average electric bill.)

That’s made up from a mix of state and federal dollars, plus fees collected from the utilities themselves. The budget is approved every year by the General Assembly.

Who are the commissioners?

  • Gladys Brown Dutrieuille, chair; a former state Senate aide of 22 years
  • David Sweet, vice chair; once a senior advisor to Gov. Wolf on energy and economic development and a liaison to the Philadelphia Regional Port Authority
  • Norman Kennard; used to be counsel to former Commissioner Robert Powelson, providing policy advice on various utilities
  • Andrew Place; former corporate director for energy and environmental policy at Pittsburgh-based EQT Corporation
  • John Coleman, Jr.; spent 12 years as the CEO of the Chamber of Business and Industry of Centre County

How’d they get there?

Commissioners are nominated by the governor, then confirmed by the Pa. Senate.

The current board includes four Gov. Wolf appointees, one Tom Corbett appointee, and one who’s been there since Ed Rendell was leading the state.

How long do they have the gig?

Each commissioner’s term is 5 years, after which they can be reapppointed.

Who do they report to?

No one! It’s an independent agency, only interacting with government when they get a new commish or have to set a new budget.

What are they working on?

Right now the PUC is in the middle of a three-year evaluation, specifically looking at rates for people enrolled in the Customer Assistance Program (CAP).

The review began in May 2017, when the agency ordered a study to determine “what constitutes an affordable energy burden for Pennsylvania’s low-income households” — and whether its own rates were compatible.

It took a year and a half, but the report finally came out in January 2019.

What did they find out?

Pennsylvania’s utility rates for customers with lower incomes are much higher than those of neighboring states. Here’s how they stack up:

  • Pennsylvania’s maximum energy burden for CAP enrollees can be as high as 17% of annual income, depending on the energy source
  • Ohio: 10%
  • New Jersey: 6%
  • New York: 6%

Also, even though they were receiving a built-in discount, CAP customers still spend a higher percentage of their paycheck on utility bills than traditional customers, the report found.

Perhaps most important: The study determined it would cost an additional $102 million a year to reduce the state’s max utility rate to 10% for CAP customers.

What’s next?

More reports are coming.

As of July 17, PUC is undergoing a staff review of CAP Final Billing Methods — basically seeking input from utilities and other stakeholders on whether new regulations should be developed.

Why is it taking so long?

Policy change moving through the bureaucratic machine, experts like to say, is slower than a herd of snails traveling through peanut butter.

To be fair, this is a super lengthy process. When the PUC conducts a review like this — and especially when they consider changing final billing rates for some customers — they’ve got to consult thousands of stakeholders.

Dozens and dozens of utilities have been instructed to weigh in, and they request extensions about as often as they comply with deadlines.

“There has been a lengthy and detailed effort to compile and analyze data from utilities across the state, to help develop a clearer understanding of what the actual energy burdens are in Pennsylvania,” PUC spokesperson Nils Hagen-Frederiksen told Billy Penn.

So are they about to lower my bills?

That depends.

Even if the changes eventually go through, the new rates would only be seen by folks who participate in CAP. You might be eligible if you meet certain federal poverty income guidelines, or if you’re “payment-troubled” (aka you’ve missed a bill or established some kind of payment plan).

For the customers who don’t qualify, a CAP rate adjustment would likely mean your gas and electric bills will go up, but only by a small amount: an average of $15 per utility each year.

Want some more? Explore other Broke in Philly stories.

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