By The River

I ran into Fran Mansberger while picking up some groceries with my wife at the Weis Market in New Cumberland this past Sunday. Fran is executive director of the Industrial Energy Consumers of Pennsylvania, whose members are the steel mills, cement plants, hospitals of the state. In other words, places with really big electric bills. A large steel mill can use as much as 750 million kilowatt hours of electricity per year. My own home, by comparison, uses about 16,350 kwh in the same period. You get the drift.

Fran said the big players in the state economy are worried about the coming expiration of electric rate caps in Pennsylvania at the end of 2009 and 2010. In relative terms, it will be as bad or worse for them as for homeowners. She sent me some numbers when she got home, grocery carts not yet being equipped with Internet and e-mail. She also offered to send a blueberry recipe she liked, having noted the four pints in our cart that were destined for a pie and general good eating.

Anyway, I looked at the numbers she sent and saw her point. Depending on who their local utility is, the large industrial customers are looking at post-rate cap increases ranging from a minimum of 45 percent in the PECO Energy service territory around Philadelphia all the way up to 136 percent in the Allegheny/West Penn Power territory that includes State College. PPL industrial customers are looking at a 72 percent increase, Met-Ed industrial customers about 97 percent.

In real terms, that large steel mill I mentioned can expect to pay an additional $30.7 million per year in the PPL territory and $37.1 million if they are Met-Ed customers. A typical hospital, Fran said, which uses 70 million kwh per year, would pay PPL another $2.9 million and Met-Ed another $3.5 million. A mid-sized industrial facility using 35 million kwh per year would pay PPL another $1.4 million and Met-Ed another $1.7 million.

That's money going to a few large and already quite profitable electric utilities and their shareholders instead of into plant improvements and employee wages and benefits. The electricity doesn't get any better. It just gets way more costly. Which is why Sen. Fumo and some other members of the Legislature are talking about finding a way to limit annual increases to 5 percent or less.

Perhaps in response to these numbers, PPL yesterday send out a news release offering to help industrial customers manage and reduce their power bills during periods of high demand and congestion on the transmission lines. Prices typically soar at these times. The release didn't detail how this would be accomplished. But clearly, the utilities are worried about big customer backlash.