To: STATE EDITORS

Contact: Chuck Ardo of the Pennsylvania Office of the Governor, +1-717-783-1116

H.B. 2200 Will Help Consumers Save $500 Million by 2013, Position PA Among Leading States to Conserve Electricity

HANOVER TOWNSHIP, Pa., Oct. 15 /PRNewswire-USNewswire/ -- Pennsylvania families and businesses facing double-digit increases in electricity rates are poised to save more than $500 million over the next five years now that Governor Edward G. Rendell has signed into law a measure that equips consumers with the tools they need to conserve electricity and to make more informed decisions about their energy use.

The Governor signed House Bill 2200 today during a visit to the B. Braun Medical Products headquarters near Bethlehem. The company is a major regional employer that will face at least $1 million in higher annual electricity costs once the rate caps for PPL expire in December 2009.

The Governor said that while the bill will help consumers save money through conservation, more must be done to mitigate future rate increases.

"This bill marks a great step forward in our efforts to help electricity consumers save on their energy bills by reducing consumption and its establishes Pennsylvania as a leader among states working to encourage conservation," said Governor Rendell, noting that the commonwealth's energy conservation mandates are now stronger than 44 other states. "While this measure will help save the average household more than 20 percent on their electricity bill - savings that will add up to $500 million by 2013 for all consumers - work remains to avoid the punishing blow our families and businesses are facing once rate caps expire.

"I am deeply disappointed that we were unable to provide relief to consumers by enacting a rate mitigation proposal," said the Governor. "Electricity consumers are facing rate increases of between 20 and 60 percent once caps come off and that is unacceptable. I will not stand by while the utilities pursue record-breaking profits on the backs of our families and businesses.

"I urge the legislature to make rate mitigation a top priority when it returns, so we can avoid this crushing blow to our economy and our citizens, and ensure that employers like B. Braun Medical Products can better anticipate what their electricity rates will be."

Under House Bill 2200, utilities will be required to work with customers to cut electricity use 1 percent by 2011 and 3 percent by 2013.

By 2013, utilities must also cut energy use 4.5 percent during peak demand periods when prices are highest - typically the hottest days of summer and the coldest days of winter. Electric utilities that fail to meet the law's requirements will face steep penalties.

The electric utilities will be directed to offer customers new pricing plans that reward customers who shift heavy use to off-peak hours. Consumers can choose to continue using traditional rate plans where they pay the same cost regardless of when energy is used or they can take advantage of two new plans that offer savings for making smart energy choices.

One plan will charge the customer two prices -- either a peak rate or an off-peak rate depending on what time of day they use energy - while the second option would offer bills based on real-time pricing, or the actual cost of energy every hour. Consumers using the real-time pricing option could benefit by consuming in the hours when costs are lowest.

To help consumers take maximum advantage of these new choices, H.B. 2200 will require that every home and business in the state to be equipped with "smart meters" within 15 years. A smart meter gives consumers the information they need to better control their energy consumption, such as the current cost of power or whether they are in a peak rate period. Armed with this information, consumers can choose to use energy when it is cheapest and cut back at times when it is most expensive.

The new act also will provide Pennsylvania's utilities with the tools they need to purchase sources of energy at the lowest possible cost. This required "least cost" purchasing by utilities ensures that the commonwealth's utility customers don't foot the bill for bad energy purchasing decisions by utilities. Utilities will now be required to use a "prudent mix" of energy purchases conducted via auctions, limited long-term contracts, spot market purchases, and short-term contracts.

For larger businesses, this bill permits them to enter into long-term contracts with utilities and give the state's largest energy users, who are also some of Pennsylvania's largest employers, predictability in their energy purchases.

For more information, visit www.depweb.state.pa.us and click on the "Fueling Energy Savings" icon.

The Rendell administration is committed to creating a first-rate public education system, protecting our most vulnerable citizens and continuing economic investment to support our communities and businesses.To find out more about Governor Rendell's initiatives and to sign up for his weekly newsletter, visit www.governor.state.pa.us.

CONTACT:

Chuck Ardo

717-783-1116

SOURCE Pennsylvania Office of the Governor

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