Proposals to Increase Monthly Fixed Charges on Electricity Bills Discourage Conservation and Unfairly Penalize Low Income Consumers

Recent proposals by Pennsylvania's two largest electric companies to substantially boost fixed monthly charges for consumers would hurt low-usage and low-income customers the most, many of whom are living on fixed incomes and are struggling to pay for food, rent, medicine, and utility bills.

At hearings before the Public Utility Commission in Harrisburg, Allentown and Philadelphia this month, AARP volunteers told a PUC judge that proposals by PPL and PECO to significantly increase their fixed monthly customer charges are unfair and actually give consumers less control over their monthly electric bill.

PECO, in a filing submitted March 27, proposes increasing its monthly customer charge 68 percent, from $7.13 a month to $12. PPL's monthly fee, already the highest in the state at $14.13, would go up to $20 a month, a 42 percent increase. Most utilities in the state charge about $10 a month, with West Penn Power billing only $5.81 monthly.

"It's poor public policy," said Bill Malcolm, a senior legislative representative for AARP. "Raising the fixed monthly charge lowers the variable per-kilowatt charge, which creates a disincentive for conservation and energy-efficiency.”

Increasing fixed customer service charges stands in contrast with how electric service has evolved over the past decade.  Many ratepayers now work hard to conserve home energy usage and keep their energy bills more affordable. In addition, many Pennsylvania electric customers have comparison shopped for lower electric rates. Approving significant fixed service charge increases would effectively reduce any savings customers have seen through conservation and shopping.

The utilities justify the rate increases by claiming the additional payments would go toward infrastructure improvements and providing a fair return on investments.  The truth is, past rates have already accounted for, or should have accounted for, any infrastructure maintenance and improvements.

AARP Pennsylvania asks the Public Utility Commission to reject the proposed hikes in fixed customer charges.  Pennsylvania’s electricity customers work hard to live within their means, and the electric utilities should do so as well.