DEP Secretary Says Energy Independence Strategy Will Help All Around

YORK – Speaking at a town hall meeting in one of Pennsylvania’s historic manufacturing centers Friday, Environmental Protection Secretary Kathleen A. McGinty said electricity price increases will severely challenge businesses and homeowners once rate caps end statewide by 2011, but these price spikes can be mitigated with Gov. Edward G. Rendell’s Energy Independence Strategy.

“The Energy Independence Strategy is an opportunity to keep Pennsylvania’s electricity costs affordable and stable,” McGinty said. “Our manufacturers and our families need affordable, reliable power to continue growing here in Pennsylvania. We need to act now to ensure that our businesses can remain competitive, our families can enjoy a high quality of life, and that we can continue to create new opportunities for our workers.”

As electricity rate caps expire, Pennsylvania’s manufacturers will face soaring or rapidly changing energy prices that will make the state’s business climate less attractive, McGinty said while noting the statewide support the initiative is gathering.

“Affordable energy prices are an important consideration for companies when determining where to invest and grow,” said McGinty. “We recently heard that without a stable electricity-pricing environment, companies will look to expand and create jobs outside of Pennsylvania. This uncertainty is what has led so many manufacturers, renewable energy companies, business advocacy groups, and labor unions to support the governor’s proposal.”

The Energy Independence Strategy will help reduce electricity prices by enabling large energy consumers to sign long-term contracts with energy suppliers that offer stable and cheaper prices, or to generate power through “microgrids.” Electricity providers would also have to demonstrate
efforts to keep prices down by investing in conservation before purchasing expensive generation and transmission, and by buying a portfolio of
electricity resources at wholesale prices through long- and short-term contracts, instead of relying solely on unpredictable “spot market” deals.
“We cannot afford to do nothing in the face of rate cap removals, which in Maryland and Delaware resulted in rate increases of 50 to 70 percent,” McGinty said. “If we adopt the Energy Independence Strategy, we can turn these challenges into economic opportunities. By making new strategic investments in our economy, we can make Pennsylvania a world leader in the production of clean energy and create 13,000 jobs along the way.”

The strategy would accelerate the production and purchase of clean energy products and systems by making more than $100 million available in the form of venture capital, loans and grants so Pennsylvania firms can attract private sector investors and grow.

New state resources would direct up to $500 million for infrastructure improvements, construction, early project development costs and equipment purchases to attract private investment in energy related economic development projects – including solar manufacturing, biofuels, advanced coal technologies, and advanced conservation and efficiency projects.

The governor's initiative also will provide consumers and small businesses with $244 million in new funding to help purchase and install state-of-the-art energy technologies.

Old, inefficient air conditioners and refrigerators are two of the biggest energy-using appliances in the home. The Energy Independence Strategy would provide rebates of $100 to customers who turn in these old appliances for new models that use at least 15 percent less energy.

In addition, the proposed Pennsylvania Sunshine program will help residents pay for up to 50 percent of the cost of installing solar panels on their home or small business. At current electricity rates, the average household could save about $300 a year with a 2.5 kW system, or solar panels that generate about one-quarter of the electricity consumed in the home.

The strategy would allow consumers to have smart electric meters installed in their home, providing a new tool to reduce energy spending. Smart meters enable customers to use less electricity during peak times—when electricity is most expensive—and can save customers up to 15 percent on annual electricity costs.

Funding for the Energy Independence Strategy will be generated by a minimal charge on electric power consumption. Similar charges are in place in 15 states and the District of Columbia. The charge is proposed at $0.0005 per kWh of electricity used — lower than all but two of the 16 jurisdictions.

This charge would cost the average residential customer 45 cents per month, the average commercial customer about $3 per month, and the average industrial customer $74 per month. For large industrial customers, the fee would be capped at a maximum of $10,000 per year.
By contrast, the Energy Independence Strategy, as a whole, is expected to save consumers nearly 15 times more than the cost of this fee. The average residential customer is expected to save $73 per year, the average commercial customer $425 per year, and the average industrial customer $10,500 per year. For more information on the Energy Independence Strategy, including a list of supporters, visit the DEP Web site.