Alexander Pope's 1709 Essay on Criticism is one of those works that nearly everyone has quoted but almost nobody has actually read. It gave us famous quotes like "a little learning is a dangerous thing," and perhaps the most popular "fools rush in where angles fear to tread."
If it were not for that work, folks who write about happenings in our legislature would have fewer clichés at their disposal. Those clichés are used often because of the amount of bills that seem simple and harmless at first glance, but in reality are very risky and deserve careful consideration.
Next week, we may see our state Senate vote on a bill that falls into this category—Senator Boscola's Senate Bill (SB) 805, the large commercial and industrial opt-out of Act 129.
SB 805 is based on the idea that large electricity consumers have enough incentive to cut electricity costs without requiring them to do so under the Act 129 program. That is a nice concept, but the data seems to indicate that is not the case.
If there weren't any cost effective measures available, we would expect the utilities (that are charged under Act 129 with proving large consumers achieved reductions) would have trouble meeting their targets. However, not only are they consistently reaching their targets, they have been coming in under budget. That suggests we should do more under Act 129, not less.
Additionally, SB 805 isn't limited to large industrial consumers claiming they have increased efficiency as much as possible. It would also exempt all of their subsidiaries. Thus, if a large factory opts out, then they can opt out all of their offices as well. The fact of the matter is, we don't even know how many sites this will impact.
Why should we care if they opt out?
Once a company opts out, the overall energy efficiency targets for Act 129 will decrease along with the amount of money available to invest in energy efficiency. In other words, the utilities will not be able to take the investments they would have made at large consumer facilities and use them for other consumers (like us residential customers). Therefore, once the opt outs start occurring, we will no longer achieve the amount of energy savings we have historically seen under Act 129. This will end up raising everyone else's electric bills.
Historically, about 10 percent of the efficiency improvements from Act 129 have come from large industrial customers. In fact, they have accounted for roughly $100 million in net benefits during each phase of Act 129 from savings like avoided cost of generation and avoided operation and maintenance expenses. $100 million is a lot of money to lose, but the actual net benefits are even higher if you account for fuel and water savings, the value of public health and environmental benefits, avoided compliance costs from other regulations, and the wholesale price suppression effect that lowers all of our electric bills.
What does SB 805 really mean for our electric bills?
That is exactly what the senators poised to vote on the bill should be asking themselves. There are other options besides rushing the bill through the Senate. For starters, the Senate could require the Public Utility Commission (PUC) to study the impacts, or at the very least they could hold hearings. We should expect our Senate to give far more consideration to a bill aimed at providing a handout to large companies at the expense of homeowners and smaller businesses.
Alexander Pope's essay also contained the quote "To err is human, to forgive, divine." A noble sentiment, but us voters are only human and probably won't be as forgiving of a senator responsible for raising our electric bills.
Rob Altenburg is director of the PennFuture Energy Center and is based in Harrisburg. He tweets @RobAltenburg.