in the commonwealth court of pennsylvania · 2021. 7. 14. · 2011 collections data for major gas...

IN THE COMMONWEALTH COURT OF PENNSYLVANIA Irwin A. Popowsky, Consumer Advocate, : : Case No. 1179 C.D. 2012 Petitioner : : v. : : Pennsylvania Public Utility Commission, : : Respondent :

BRIEF AMICI CURIAE OF THE PENNSYLVANIA UTILITY LAW PROJECT and AARP

IN SUPPORT OF PETITIONER

Respectfully submitted:

PENNSYLVANIA UTILITY LAW PROJECT Patrick M. Cicero, Esq., PA ID: 89039 Harry S. Geller, Esq., PA ID: 22415 118 Locust Street Harrisburg, PA 17101 Tel.: 717-236-9486 Fax: 717-233-4088 [email protected]

AARP FOUNDATION LITIGATION Julie Nepveu, Esq., (Pro Hac Vice Pending) DC Bar No. 458305 601 E Street, NW Washington, DC 20049 Tel: 202-434-2060 Fax: 202-434-6424 [email protected]

Date: October 12, 2012

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Table of Contents

I. Statement of Interest of Amici Curiae ............................................................... 1

II. Introduction and Statement of the Issue ............................................................ 3

III. Argument ........................................................................................................... 6

A. The PUC Erred In Dismissing Price Stability As An Essential Component Of A Default Service Procurement Portfolio. ....................... 6

B. Price Stability Must Be A Component Of Default Service And Cannot Be Left To The Whims Of The Competitive Electric Market. ................. 8

C. Price Stability Is Particularly Important To Low-Income Households And Older People Living On Fixed Incomes. .........................................11

D. Volatile Default Service Rates Harm The Utility, Other Consumers, And Create Public Health Hazards ..........................................................17

IV. Conclusion .......................................................................................................20

Table of Authorities

Statutes

Act 129 of 2008 ................................................................................................ passim

52 Pa. C.S. §§ 54.181-54.189 .................................................................................... 7

66 Pa. C.S. § 1402(2) ...............................................................................................18

66 Pa. C.S. § 2802(10) ............................................................................................... 9

66 Pa. C.S. § 2807(e)(3.1) .......................................................................................... 3

66 Pa. C.S. § 2807(e)(3.2) .......................................................................................... 7

66 Pa. C.S. § 2807(e)(3.4) ................................................................................. 3, 7, 9

66 Pa. C.S. § 2807(e)(7). ............................................................................................ 7

The Electricity Generation Customer Choice and Competition Act, Act 138 of 1996, 66 Pa. C.S. §§ 2801 et seq. ......................................................... 3

Other Authorities

2011 Cold Weather Survey Results, available at http://www.puc.state.pa.us/ general/publications_reports/pdf/Cold_Weather _Results_2011.pdf. .................19

2011 Collections Data for Major Gas and Electric Companies, available at http://www.puc.state.pa.us/general/publications_reports/pdf/Chapter14- Biennial _2011RCD.pdf .......................................................................................19

2012 Poverty Guidelines, Department of Health and Human Services, available at http://aspe.hhs.gov/poverty/12poverty.shtml. ..................................12

AARP of Pennsylvania Survey, Detailed Findings .................................................14

Center for Financial Services Innovation, A Complex Portrait: An Examination Of Small-Dollar Credit Consumers (2012), available at http://cfsinnovation. com/system/files/A%20Complex%20Portrait-%20An%20Examination% 20of%20Small-Dollar%20Credit%20Consumers.pdf ..........................................15

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Roger D. Colton, Identifying and Addressing Barriers That Impede Use of Budget-Billing, 09-4 FSC’s Law and Economics Insights (July/Aug. 2009), available at http://www.fsconline.com/downloads/FSC%20Newsletter/ news2009/n2009_ 0708.pdf ........................................................................... 16, 17

Frank C. Graves & Joseph B. Wharton, The Brattle Group, Edison Electric Institute White Paper, New Directions for Safety Net Service -- Pricing and Service Options (2003), available at http://www.eei.org/whatwedo/ PublicPolicyAdvocacy/State Regulation/Documents/new_directions_ safetynet.pdf. .................................................................................................. 10, 17

Implementation of Act 129 of October 15, 2008; Default Service And Retail Electric Markets, Docket No.-L 2009-2095604 (Final Rulemaking Order entered Oct. 4, 2011) ................................................................................ 7, 8, 9, 11

Insuring Consistent Application of 52 Pa. Code § 56.12(7), Equal Monthly Billing; Doc. No. M-00051925, Order of Nov. 10, 2005 .............................. 16, 18

Diana Pearce, Pathways PA, The Self Sufficiency Standard for Pennsylvania 2010-2011 (May 2010), available at: http://www.pathwayspa.org/10-11_SS_Standard.pdf .............................................................................................11

Petition of Pike County Light & Power Company for Approval of Its Default Service Implementation Plan, at Docket No. P-2011-2252042 (Opinion and Order dated May 24, 2012) .......................................................................... 5, 7, 11

Population and Housing Narrative Profile: 2008-2010, 2008-2010 American Community Survey 3-Year Estimates, available at http://factfinder2.census .gov/faces/nav/jsf/pages/searchresults.xhtml?ref=top &refresh=t. Select Topics, dataset, 2008-2010 ACS 3-year estimates. Next select geographies, state, Pennsylvania. Select file NP01, Population and Housing Narrative Profile: 2008-2010 ................................................................................... 12, 14, 19

Recommended Decision of the Administrative Law Judge ..................................4, 5

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John Shingler, Consumer Services Information System Project, Penn State Univ., Long Term Study of Pennsylvania’s Low Income Usage Reduction Program: Results of Analyses and Discussion (2009), available at http://www.puc.state.pa.us/General/publications_reports/pdf/PSU-LIURP_Report 2008.pdf .................................................................... 12, 13, 17, 18

Bruce Tonn & Joel Eisenberg, The Aging US Population and Residential Energy Demand, 35 Energy Policy 743 (2007) ....................................................13

U.S. Consumer Product Safety Commission, CPSC Warns of Deadly Fire and Carbon Monoxide Hazards with Winter Home Heating, Release #09-109, Jan. 28, 2009, available at http://www.cpsc.gov/cpscpub/prerel/prhtml09 /09109.html ...........................................................................................................18

Rules

Pa.R.A.P. 2154(b). ..................................................................................................... 1

Rule 531(a)(2) ............................................................................................................ 1

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I. Statement of Interest of Amici Curiae

Pursuant to Pennsylvania Rule of Appellate Procedure 531, the Pennsylvania

Utility Law Project, (PULP), and AARP, (collectively “Amici”), hereby submit this

Brief Amici Curiae in support of the positions advanced by Petitioner, Irwin A.

Popowsky, Consumer Advocate, in the captioned proceeding.1

PULP is the designated statewide project of the Pennsylvania Legal Aid

Network, (PLAN), of civil legal aid programs, and acts in coordination with PLAN

programs, their clients, other nonprofit agencies, and community groups that serve

low income people. Specifically, PULP provides statewide representation, advice,

and support in energy and utility matters on behalf of low-income, residential

utility customers within Pennsylvania.

AARP is a nonpartisan, nonprofit organization with a membership that helps

people 50+ have independence, choice and control in ways that are beneficial and

affordable to them and society as a whole. AARP is an advocate nationwide for the

rights of people 50 and older. A substantial percentage of AARP’s members live

on fixed or limited income. A major priority for AARP is to protect consumers

from utility expenses that may endanger their health and financial security. In 2011

1 The Consumer Advocate, as Petitioner in this proceeding, has elected to defer reproduction of the record pursuant to Pa.R.A.P. 2154(b). Pursuant to Rule 531(a)(2), Amici are electing to file a definitive copy of this brief amici curiae, without citation to the record below, at the time prescribed for the filing of the Consumer Advocate’s advance brief.

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alone, AARP advocacy saved more than 17 million people aged 50+ in excess of

$572 million in excess utility charges.

Amici have an interest in these proceedings because older and low-income

households are some of the most vulnerable residents who will be affected by the

decision. Reasonable, predictable, and stable utility rates and service are essential

for older and low income people’s health and wellbeing. People living on low or

fixed incomes are particularly vulnerable to high utility costs and are often forced

to reduce expenditures on other basic needs, including food and medicine, or to

reduce their levels of heating and cooling beyond safe levels if they cannot afford

their utility bills. Older people are less able to maintain their internal body

temperature and disproportionately suffer from certain medical conditions that

make them especially sensitive to temperature extremes, such as diabetes, lung

disease, and heart disease. High or unpredictable utility costs also threaten the

ability of older people to continue to live independently, forcing some into nursing

homes prematurely or even into homelessness.

Both AARP and PULP advocated in the General Assembly in favor of the

provisions of Act 129 that ensure default service providers acquire electric energy

through a “prudent mix” of resources that are designed to provide stable, reliable

utility rates at the least cost to customers over time. The interpretation of these

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provisions is at the heart of this appeal. Amici’s participation in this case will assist

this Honorable Court in reaching its ultimate decision on the merits.

II. Introduction and Statement of the Issue

The Electricity Generation Customer Choice and Competition Act, Act 138

of 1996, (“Competition Act”), as amended by Act 129 of 2008, (“Act 129”), 66 Pa.

C.S. §§ 2801 et seq., requires that default service providers acquire electric energy

through a “prudent mix” of resources that are designed: (i) to provide adequate and

reliable service; (ii) to provide the least cost to customers over time; and (iii) to

achieve these results through competitive processes that include auctions, requests

for proposals and/or bilateral agreements. 66 Pa. C.S. §§ 2807(e)(3.1) and 2807

(e)(3.4). Act 129 was enacted to ensure that when an electric distribution company

procures energy for its default service customers, the long-term affordability of

electricity is preserved.

Despite the requirements of Act 129, the Pennsylvania Public Utility

Commission, (“PUC”), decision of May 24, 2012, allows the Pike County Light &

Power Company, (“Pike” or “the Company”), to procure 100% of its default

service generation through hourly spot market purchases, the price of which is

highly volatile. As argued by the Petitioner, this decision constitutes an error of

law and an abuse of discretion. Specifically, the procurement plan approved by the

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PUC fails to comply with the Act 129 requirement to ensure that vulnerable

customers will remain protected from spikes in default service energy prices.

The mandates of Act 129 are correctly addressed in the Recommended

Decision of the Administrative Law Judge (“ALJ”), which was erroneously

rejected by the PUC. Quoting the preamble to the 2008 amendments, the ALJ

stated:

The General Assembly established the policy goals of Act 129 in its Preamble. There, in declaring the purpose of Act 129, the General Assembly found that price stability was a key concern that needed to be addressed. The General Assembly stated in pertinent part:

Preamble

The General Assembly recognizes the following public policy findings and declares that the following objectives of the Commonwealth are served by this act:

(1) The health, safety and prosperity of all citizens of this Commonwealth are inherently dependent upon the availability of adequate, reliable, affordable, efficient and environmentally sustainable electric service at the least cost, taking into account any benefits of price stability over time and the impact on the environment.

(2) It is in the public interest to adopt energy efficiency and conservation measures and to implement energy procurement requirements designed to ensure that electricity obtained reduces the possibility of electric price instability, promotes economic growth and ensures affordable and available electric service to all residents.

(3) It is in the public interest to expand the use of alternative energy and to explore the feasibility of new

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sources of alternative energy to provide electric generation in this Commonwealth.

See, Preamble to Act 129, 2008 Pa. Laws 129 (emphasis added [by ALJ]). As the highlighted portions above demonstrate, the General Assembly required that default service providers work to ensure price stability. In addition to price stability, the Act requires that default service be designed to be adequate, reliable, affordable, efficient, and available. The General Assembly established a series of policy objectives that each [electrical distribution company] must work to achieve through its default service plan.

Petition of Pike County Light & Power Company for Approval of Its Default

Service Implementation Plan, at Docket No. P-2011-2252042 (Opinion and Order

dated May 24, 2012) at 15-16, citing ALJ’s Recommended Decision at 10-14.

The PUC ignored the requirements of Act 129 and its own regulations by

dismissing price stability as an essential component of a default service

procurement portfolio, stating that “the ALJ relied too heavily upon the Preamble

to Act 129 in recommending that Pike employ a financial hedge within its default

service portfolio.” Id. at 31. In reaching its decision, the PUC erred by not

requiring the Company to include an on-peak fixed price hedge contract for a

portion of the on-peak residential default service load. The Company’s low-income

and older households require a level of price stability that can most readily be

brought about through the use of a prudent mix of contract types designed to hedge

against the possibility of energy price spikes. Moreover, the Company’s customers

are entitled to a default service product that meets the goals and requirements of

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Act 129 and the PUC’s regulations. The PUC must ensure that these obligations

are met.

Amici urge this Court to find that the PUC failed to interpret properly the

Act 129 requirement for price stability and reverse the decision as a matter of law

and require the Company to follow the plan proposed by the OCA and adopted by

the ALJ. This is the only plan on the record that meets the legislative intent of Act

129. In the alternative, Amici urge the Court to remand this case for further

proceedings that will protect default service consumers from an unnecessary spike

in their home energy prices.

III. Argument

A. The PUC Erred In Dismissing Price Stability As An Essential Component Of A Default Service Procurement Portfolio.

The PUC erred as a matter of law because it failed to consider price stability

as a significant component of the default service portfolio. Through enactment of

Act 129, the Pennsylvania General Assembly rejected the Restructuring Act’s

policy that default service rates should reflect “prevailing market prices,” because

it resulted in unacceptably volatile default service utility rates. The “prevailing

market price” approach was replaced with the portfolio approach requirement and

the “least cost over time” mandate of Act 129. In determining whether a plan

contains the appropriate prudent mix designed to ensure least cost service to

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customers over time, the PUC must not ignore the emphasis that the Pennsylvania

General Assembly placed on price stability.

The importance of price stability in default service is clear from the

language of Act 129, as discussed by the ALJ. It is also reflected in the PUC’s own

recently enacted default service regulations. 52 Pa. C.S. §§ 54.181-54.189;

Implementation of Act 129 of October 15, 2008; Default Service And Retail

Electric Markets, Docket No. L-2009-2095604 (Final Rulemaking Order entered

Oct. 4, 2011) (“Act 129 Final Rulemaking Order”). Specifically, the PUC’s Act

129 Final Rulemaking Order determined that the least cost over time standard

includes rate stability:

Finally, it should be noted that the “least cost over time” standard should not be confused with the notion that default prices will always equal the lowest cost price for power at any particular point in time. In implementing default service standards, Act 129 requires that the Commission be concerned about rate stability as well as other considerations such as ensuring a “prudent mix” of supply and ensuring safe and reliable service. See 66 Pa. C.S. §§ 2807(e)(3.2), (3.4) and (7). In our view, a default service plan that meets the “least cost over time” standard in Act 129 should not have, as its singular focus, achieving the absolute lowest cost over the default service plan time frame but, rather, a cost for power that is both adequate and reliable and also economical relative to other options.

Act 129 Final Rulemaking Order at 11-12 (emphasis added).

By downplaying in its May 24, 2012 Opinion and Order the role that rate

stability has in a properly constructed default service portfolio, the PUC ignored

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the plain mandate of the Competition Act, as amended by Act 129, and its own

regulations.

B. Price Stability Must Be A Component Of Default Service And Cannot Be Left To The Whims Of The Competitive Electric Market.

In the proceedings below, Direct Energy and the Company asserted that

requisite price stability can be left to the competitive markets through the provision

of fixed price contracts from competitive electric generation suppliers. The PUC

should have rejected this argument, as it previously did in its Act 129 Final

Rulemaking Order. There, it recognized that a “spot market” methodology similar

to that adopted in the Order at issue in this case would run counter to the price

stability requirements of Act 129. The PUC noted that:

We disagree with [the assertion by some] . . . as to the proper interpretation of the “least cost” standard as mandating that default service rates approximate, on a prospective basis, the market price of energy. Such an interpretation would signal retention of the “prevailing market price” standard that has been expressly replaced under Act 129. Moreover, this interpretation conflicts with the Act 129 objective of achieving price stability which dictates consideration of a range of energy products, not just those that necessarily reflect the market price of electricity at a given point in time. Price stability benefits are very important to some customer groups in that exposing them to significant price volatility through general reliance on short term pricing would be inconsistent with Act 129 objectives.

Act 129 Final Rulemaking Order at 39-40 (emphasis added).

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The Company’s premise that the requisite stability can be left to the

competitive markets not only has been rejected by the General Assembly, it also is

flawed because electric generation suppliers do not have an obligation to pursue

price stability and the least cost over time. See 66 Pa. C.S. § 2807(e)(3.4); Act 129

Final Rulemaking Order at 11-12. Unlike the default service provider, which is

required to pursue both, retail suppliers may design and sell their own mix of

contracts based on their own judgments and motives.

Furthermore, the Competition Act places affirmative duties on the PUC to

ensure that electricity distribution companies “continue the protections, policies

and services that now assist customers who are low-income to afford electric

service” in the competitive environment. 66 Pa. C.S. § 2802(10). This declaration

of policy in the Competition Act recognizes that, although direct access by retail

customers to the competitive generation market was needed to enable competition,

it was to be tempered by the PUC’s continued role in ensuring affordability of

electric service to the Commonwealth’s most economically vulnerable citizens.

This polestar legal principle must be neither lost nor diminished in the midst of the

myriad issues present in this case.

Unlike the PUC’s decision, the Petitioner’s and ALJ’s interpretation of Act

129 is consistent with the electric industry’s well recognized acknowledgement

that “low income customers will have more trouble coping with the volatile prices

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of a short-term procurement strategy and will likely benefit from the longer term

hedging that [default service]2 can provide.” Frank C. Graves & Joseph B.

Wharton, The Brattle Group, Edison Electric Institute White Paper, New

Directions for Safety Net Service -- Pricing and Service Options, 9 (2003)

(acknowledging low income people are “least likely to be served in the competitive

retail market (less so than the average retail customer)”).3 To maintain protections

that low income consumers benefitted from in a regulated electricity market,

industry research advised:

[T]he competitive market can be used to provide a level of price stability for the [default service] offer to low-income customers. It requires that policy makers develop reasonable guidelines and workable approval processes for acquiring longer-term resources at competitive rates in forward markets. While spot markets are volatile, forward markets, particularly long-term forwards, are less so. Therefore, a portfolio of resources acquired in “layers” over time can provide average prices that evolve in a gradual, stepwise fashion. They are low in the sense and to the degree that long-run, average competitive forward market prices are low.

Id.

2 See Graves & Wharton, at 3 (reporting “Safety Net Service [otherwise known as default service] is the group of regulated generation service programs that states pursuing retail restructuring offer to customers as an alternative, or safety net, for the competitive retail offers.”). 3 Available at http://www.eei.org/whatwedo/PublicPolicyAdvocacy/State Regulation/Documents /new_directions_safetynet.pdf.

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C. Price Stability Is Particularly Important To Low-Income Households

And Older People Living On Fixed Incomes.

The PUC’s interpretation of Act 129 in its May 24, 2012 Opinion and Order

will harm low income and older consumers and is contrary to its recognition in the

Act 129 Final Rulemaking Order that “price volatility. . . is inconsistent with Act

129 objectives.” Act 129 Final Rulemaking Order at 40. Because low income and

older households must survive on a shoestring budget, they do not have the

resources or flexibility to absorb price spikes. Indeed, a two adult, two child

household in Pennsylvania needs income levels that are 2 to 2½ times the federal

poverty level to pay all their essential expenses, including their utility bills. See

Diana Pearce, Pathways PA, The Self Sufficiency Standard for Pennsylvania 2010-

2011, 7 (May 2010).4 Households earning below this level must rely on public or

4Available at: http://www.pathwayspa.org/10-11_SS_Standard.pdf. The Self-Sufficiency Standard is a tool that measures how much income a family of a certain composition in a given place must earn to meet their basic needs without public or private assistance. The Self Sufficiency Standard for Pennsylvania includes the following expenses:

• Housing costs (Rent/utilities) • Child care (full-time family are for infancies, full-time center care for preschoolers,

before and after school care for school age children) • Food (food for home preparation only, does not include take-out or restaurant meals) • Transportation (the cost of owning a car (per adult) – insurance, gas, oil, registration, etc.

– or public transportation when adequate. The car or public transit costs are figured only for commuting to and from work and day care plus a weekly shopping trip.)

• Health Care (employer sponsored health insurance & out-of-pocket costs) • Taxes (Federal and state income tax and tax credits, payroll taxes, state and local sales

taxes) • Miscellaneous (clothing, shoes, paper products, diapers, nonprescription medicines,

cleaning products, household items, personal hygiene items, and telephone service.

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private assistance (such as CAP and other Universal Service programs) to meet

their basic needs. Thus, while 13 percent of the households in Pennsylvania in

2008-2010 lived below the federal poverty level of $15,130 annually for a family

of two and $23,050 annually for a family of four,5 a significantly greater

percentage of households cannot afford their utility bills. The median household

income in Pennsylvania is only $50,289, well below the $57,625 that would bring

a family of four up to the self sufficiency standard. See Population and Housing

Narrative Profile: 2008-2010, 2008-2010 American Community Survey 3-Year

Estimates.6

Many low income and older households find it difficult to pay for utility

service because the cost of other essential needs including rent, food, water and

medicine compete for their limited resources. See John Shingler, Consumer

Services Information System Project, Penn State Univ., Long Term Study of

Pennsylvania’s Low Income Usage Reduction Program: Results of Analyses and

The Self-Sufficiency Standard does not include: recreation, entertainment, savings, emergencies, debt repayments, pets, education/training, gifts, broadband/internet service, cable or satellite television or other non-basic necessities. 5 2012 Poverty Guidelines, Department of Health and Human Services, available at http://aspe.hhs.gov/poverty/12poverty.shtml. 6 Available at http://factfinder2.census.gov/faces/nav/jsf/pages/searchresults.xhtml?ref=top &refresh=t. Select Topics, dataset, 2008-2010 ACS 3-year estimates. Next select geographies, state, Pennsylvania. Select file NP01, Population and Housing Narrative Profile: 2008-2010.

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Discussion, 4-5 (2009).7 On a daily basis, they are forced to choose which bills to

pay and which to postpone paying. This is not irresponsibility; it is a matter of

survival and a necessary weighing of the relative consequences of non-payment of

particular expenses. Low income residents of the mid-Atlantic region, including

Pennsylvania, pay a much higher portion of their income toward utility costs—19

percent in 2006, up from 17 percent in 2001— than the national average of 3 to 4

percent. Id. at 4.

Price stability is also particularly important for older households, who tend

to have lower, fixed income and who generally use more residential energy than

younger persons. Bruce Tonn & Joel Eisenberg, The Aging US Population and

Residential Energy Demand, 35 Energy Policy 743 (2007). Pennsylvania, with the

sixth largest population, has the second largest proportion of elderly residents in

the country. Shingler at 4. “Note also that, as the age of the head of household

increases, so does the energy burden, suggesting that the elderly would be more

likely to have higher energy burdens.” Tonn & Eisenberg, at 25.

One reason energy burden increases with age is that their income goes down

when they stop working. A greater percentage of older people have disabilities

and health concerns, which increase costs become a greater drain on their

resources. In Pennsylvania, for example, 36 percent of people over age 65 have a

7 Available at http://www.puc.state.pa.us/General/publications_reports/pdf/PSU-LIURP_Report 2008.pdf.

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disability, compared to 5 percent of those age 18 to 65 and 11 percent of those

under age 18. Population and Housing Narrative Profile: 2008-2010, supra n.6.

Older people rely upon Social Security for a large percentage percent of their

income. In Pennsylvania, 32 percent of households received Social Security, which

provided only $16,140 per household. Id.

In a recent telephone survey conducted by AARP Pennsylvania, 75 percent

of respondents stated that it was either “extremely important” or “very important”

that electric distribution companies continue to provide a standard plan at the

lowest reasonable cost.8 When specifically asked how concerned they were about

their costs of electricity increasing, 72 percent of survey respondents were

“somewhat” or “extremely” concerned.9

The vulnerability of low income and older consumers to price spikes is

exacerbated by the fact that that the Company has little to no payment assistance

available to assist its struggling customers. Unlike larger electric distribution

companies, which are required to have universal service programs designed to

assist low-income households, the Company has a relatively impotent hardship

fund which provides grants of up to $250 to households with incomes at or below

250% of the federal poverty income guidelines. This is hardly sufficient to meet

8 Appendix A, AARP of Pennsylvania Survey, Detailed Findings, at 5 (results of telephone survey to explore the views of age 50+ residents on their electric utilities). 9 Appendix A, AARP of Pennsylvania Survey, at 10.

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the needs of households living at or below poverty, let alone those with moderately

higher incomes who need assistance paying their electricity bills. These

households, which struggle to make ends meet each month, are significantly

impacted by fluctuating prices for essential household goods and services such as

electricity. Their monthly budgets do not include any cushion to allow them to

absorb spikes in energy costs which will occur as a result of the PUC decision.

Despite cutting back on expenditures and going without other essential

needs, low income and older families often face enormous difficulty in paying all

their monthly bills. A major reason households are forced to access high cost short

term loans, such as pawn shop loans, payday loans, and auto title loans, is to pay

utility bills. Center for Financial Services Innovation, A Complex Portrait: An

Examination Of Small-Dollar Credit Consumers, 4 (2012) (showing “the top 3

uses for [a small dollar credit] product included: utility bills (36%), general living

expenses (34%), and rent (18%), even after 48% of borrowers took other steps to

address their cash shortage”).10 Unfortunately, such loans come with high fees or

interest rates and can lead consumers into a cycle of repeat usage and mounting

debt, ultimately making it even harder for them to pay for their essential needs. Id.

Though consumers understand that utility rates are subject to change, it is

difficult for low-income and older households to budget for essential electricity

10 Available at http://cfsinnovation.com/system/files/A%20Complex%20Portrait-%20An%20 Examination%20of%20Small-Dollar%20Credit%20Consumers.pdf.

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when those prices can change substantially or are based on short-term wholesale

market price indicators, which are prone to price spikes. The importance of stable

electricity prices is reflected in the widespread adoption by policy makers of

budget billing options to protect consumers and utilities. See Insuring Consistent

Application of 52 Pa. Code § 56.12(7), Equal Monthly Billing; Doc. No. M-

00051925, Order of Nov. 10, 2005, 1 (finding “budget billing has become a key

tool for customers to mitigate spikes in utility bills and for utilities to manage

account receivables.”). Many utilities provide a budget billing option specifically

to assist customers to avoid price shocks caused by higher energy prices, extreme

temperatures, and seasonal demand. “Budget-billing is generally considered to be

an effective tool for certain limited income customers to use in avoiding short-term

arrears on utility bills.” Roger D. Colton, Identifying and Addressing Barriers That

Impede Use of Budget-Billing, 09-4 FSC’s Law and Economics Insights 1

(July/Aug. 2009).11

There are three distinct advantages for low income people from levelized

billing that help to illustrate the benefits of avoiding volatility from spot markets.

First, a levelized bill helps take the peak off seasonal weather-sensitive usage. High monthly bills that might present a problem in any particular severe weather month –that month can reflect either cooling needs or heating needs—are instead spread over several months.

11 Available at http://www.fsconline.com/downloads/FSC%20Newsletter/ news2009/n2009_ 0708.pdf.

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Second, a levelized bill helps provide certainty to the customer regarding what his/her payment responsibility will be. Rather than trying to “fit” an unexpectedly high summer cooling bill into a warm weather budget that is already strained because of the loss of the children’s participation in the free and reduced school lunch/school breakfast program, a customer will know at the beginning of the summer cooling season what level of utility bill to expect each month. Finally, a levelized monthly budget billing plan represents a type of “forced savings” for economically marginal households. Rather than needing to set aside an estimated portion of the cold weather heating bills, in anticipation of accessing those savings to pay heating bills in cold weather months, the levelized monthly budget-billing creates an obligation to pay the time-shifted winter bill when those bills are rendered a little at a time during the lower-usage months. The “overpayment” is accrued by the utility as a bill credit and applied to the higher-cost months as appropriate.”

Id. at 1-2.

D. Volatile Default Service Rates Harm The Utility, Other Consumers, And Create Public Health Hazards

Default service based on short-term prices puts residential consumers at

enormous risk that the price of their essential electricity service will change

frequently and ultimately be unaffordable. Price shocks, such as those attributable

to seasonal volatility or spot market fluctuations, can result in a customer’s

inability to pay the higher than anticipated bill, resulting in arrears for utility

companies and terminations of service for those who cannot pay. See Shingler, at

7, supra n.7. In addition to harming low income people, utility arrearages increase

costs for all. See Graves & Wharton, at 3, supra n.2. Utility terminations can result

in dangerous health conditions, including fires and carbon monoxide poisoning

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from the use of unsafe heating sources. See U.S. Consumer Product Safety

Commission, CPSC Warns of Deadly Fire and Carbon Monoxide Hazards with

Winter Home Heating, Release #09-109, Jan. 28, 2009.12 The PUC should not set

default rates in a manner that increases these harmful outcomes.

According to the PUC, avoiding price volatility serves to “benefit[ ] utilities

by reducing their exposure to uncollectible expenses.” Doc. No. M-00051925,

Order of Nov. 10, 2005, at 1. Moreover, the General Assembly previously

declared, through the enactment of Chapter 14 in 2004, its policy to avoid rate

increases that may be attributable to non-payment. 66 Pa.C.S. § 1402(2); see also

Shingler at 8, supra n.7 (noting “[t]he intent of the Act was to protect responsible

bill paying [utility] customers from rate increases attributable to the uncollectible

accounts of customers”). Unfortunately for many low income households, Chapter

14 eliminated essential consumer protections and “made it easier for utility

companies to terminate service to low-income households.” Id. Indeed, the result

of Chapter 14 is that “the number of electric, natural gas and major water utility

terminations in Pennsylvania increased from 181,695 in 2004 to 283,598 in 2005.”

Shingler at 7, supra n.7. In 2011, the number of electric and natural gas

12 Available at http://www.cpsc.gov/cpscpub/prerel/prhtml09/09109.html.

19

terminations alone was 272, 961. 2011 Collections Data for Major Gas and Electric

Companies.13

The PUC’s decision to ignore the importance of price stability in default

service procurement, combined with the harsh reality of Chapter 14, puts low

income customers at greater risk of utility service termination. Access to stable

electricity prices that are procured at least cost over time is essential for

maintaining electric service, an important source of heat. See Population and

Housing Narrative Profile: 2008-2010 (reporting 19.6 percent of Pennsylvania

household use electricity to heat their homes). According to the Pennsylvania

Public Utility Commission’s Cold Weather Survey, 14,642 households entered the

winter of 2011 without heat-related utility service. See 2011 Cold Weather Survey

Results.14

13 Available at http://www.puc.state.pa.us/general/publications_reports/pdf/Chapter14-Biennial _2011RCD.pdf. 14 Available at http://www.puc.state.pa.us/general/publications_reports/pdf/Cold_Weather _Results_2011.pdf.

20

IV. Conclusion

Amici urge this Court to find that the PUC failed to interpret properly the

Act 129 requirement for price stability and reverse the decision as a matter of law

and require the Company to follow the plan proposed by the OCA and adopted by

the ALJ. This is the only plan on the record that meets the legislative intent of Act

129. In the alternative, Amici urge the Court to remand this case for further

proceedings that will protect default service consumers from an unnecessary spike

in their home energy prices.

RESPECTFULLY SUBMITTED: ____________________________________ PENNSYLVANIA UTILITY LAW PROJECT Patrick M. Cicero, Esq., PA ID: 89039 Harry S. Geller, Esq., PA ID: 22415 118 Locust Street Harrisburg, PA 17101 Tel.: 717-236-9486 [email protected]

_________________________________ AARP FOUNDATION LITIGATION Julie Nepveu, Esq. (Pro Hac Vice Pending) DC Bar No 458305 601 E Street, NW Washington, DC 20049 Tel: 202-434-2060

Dated: October 12, 2012 [email protected]

mailto:[email protected]


1

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Irwin A. Popowsky, Consumer Advocate : : Petitioners : Case No. 1179 C.D. 2012 : v. : : Pennsylvania Public Utility Commission, : : Respondent :

______________________________

CERTIFICATE OF SERVICE ______________________________

I hereby certify that I am this day serving two copies of the foregoing document, Brief Amici Curiae, upon the persons and in the manner indicated below, which service satisfies the requirements of Pa.R.A.P. 121: Service by Certified Mail, Return Receipt: Bohdan R. Pankiw, Chief Counsel Kriss Brown, Esquire Krystle J. Sacavage, Esquire Law Bureau Pennsylvania Public Utility Commission Commonwealth Keystone Building P.O. Box 3265 Harrisburg, Pennsylvania 17105-3265 [email protected] Representing the Pennsylvania Public Utility Commission

Tanya J.McCloskey, Esquire Aron J. Beatty, Esquire Jennedy S. Johnson, Esquire Office of Consumer Advocate 555 Walnut Street 5th Floor, Forum Place Harrisburg, PA 17101 [email protected] [email protected] [email protected] Representing the Office of Consumer Advocate





2

Daniel Asmus, Esquire Steven C. Gray Esquire Office of Small Business Advocate Suite 1102 Commerce Building 300 North Second Street Harrisburg, PA 17101 [email protected] [email protected] Representing the Office of Small Business Advocate

Daniel Clearfield, Esquire Deanne M. O’Dell, Esquire Carl R. Shultz, Esquire Eckert Seamans Cherin & Mellot, LLC 213 Market Street, 8th Flr. PO Box 1248 Harrisburg, PA 17108-1248 [email protected] [email protected] [email protected] Representing Direct Energy

John J. Gallagher, Esquire 711 Forest Road Harrisburg, PA 17112 [email protected] Representing Pike County Light & Power Company

Respectfully submitted, __________________________________

Jacqueline F. Crawford

Date: October 12, 2012







Appendix A

2012 AARP Survey of Pennsylvania Residents Ages 50+ on Electric Utilities 1

AARP’s Pennsylvania State Office, in response to its commitment to ensure affordable electric rates and consumer protections for all residents, commissioned this telephone survey to explore the views of 50+ residents on their electric utilities. The survey specifically explores the experiences of 50+ Pennsylvania residents with their electric utility service and their opinions regarding the way they are currently required to choose their electric service and how utility companies should be allowed to market their services to consumers. This telephone survey of Pennsylvania residents ages 50+ was fielded March 26 to April 1, 2012. A total of 800 interviews were completed yielding a margin of error of ±3.5 percent. The annotated survey begins on page 8.

Survey-In-Brief Three-quarters of Pennsylvania residents age 50+ are concerned about the rising costs of

electricity in their homes, and the majority believes their elected officials are not doing enough to lower these costs.

46 percent say they are extremely or very concerned about the costs of their

electricity going up; and another 29 percent say they are somewhat concerned.

58 percent say their state elected officials are not doing enough to lower the costs of

their electricity bills, while only 18 percent say elected officials are doing enough to

lower these costs.

Pennsylvania residents age 50+ are aware that state law allows them to choose their electricity provider and most understand the process for switching providers.

93 percent know that Pennsylvania state law allows residents to choose their

electricity provider from companies that offer service in their area.

37 percent, of respondents who are aware that they can switch electricity providers,

say they understand the process for switching very well and another 35% say they

understand the process somewhat well. 25 percent say they do not understand the

process for switching very well (14%) or at all (11%). 23 percent of all respondents say they have switched their electricity provider in the

last 12 months; while 75 percent have not switched providers. Of those respondents who have not switched their electricity provider, 28 percent say

they have considered switching.

Many Pennsylvania residents age 50+ have been contacted by electricity providers to try to get them to switch their electric company and most of these residents have been contacted by mail.

66 percent have been contacted by electricity providers, in the last 12 months, about

switching their providers.

74 percent, of respondents who have been contacted by electricity providers, say

they have been contacted by mail, 38 percent by telephone, four percent by email

and five percent by door to door solicitations. 56 percent of all respondents believe that electricity providers should not be allowed

to sell their services door to door and another 30 percent say these providers should

be allowed to sell their services door to door but with restrictions.

2012 AARP SURVEY OF PENNSYLVANIA RESIDENTS

AGES 50+ ON ELECTRIC UTILITIES


The majority of Pennsylvania residents age 50+ opposes the proposal before the Public Utility

Commission (PUC) to change the “standard plan” and the change to state law allowing electric and gas companies to increase rates annually to pay for infrastructure improvements.

75 percent say it is extremely or very important that electricity providers that are

required to offer service in certain areas continue to provide a “standard plan” at the

lowest reasonable cost.

63 percent say they oppose (strongly or somewhat) the proposal before the PUC that

would alter the “standard plan” and potentially result in higher electricity rates for

customers who have not chosen a new electricity provider. 64 percent oppose (strongly or somewhat) allowing electric and gas utilities to

automatically increase rates every year to pay for infrastructure improvements and

maintenance. 42 percent say they would be more likely to vote for a candidate for state office in

Pennsylvania who commits to strengthening consumer protections with regard to

electric service.

Detailed Findings

Over two in five 50+ residents in Pennsylvania are extremely or very concerned about the costs of their electricity going up and more than half believe their elected officials are not doing enough to lower the costs of electricity.

37 percent say their electricity bill has gone up in the last 12 months and 42 percent say it has stayed

the same.

Concern about Electricity Costs (n=800)

Opinion on Whether Elected Officials Are Doing Enough to Lower Electricity Rates

(n=800)

Extremely concerned,

21%

Very concerned

25%

Somewhat concerned,

29%

Not very concerned,

13%

Not at all concerned

10%

Not sure, 2%

Yes, 18%

No, 58%

Not sure/Ref,

24%

jcrawford

Inserted Text


Over seven in ten 50+ residents in Pennsylvania say they understand the process for changing their electricity provider very or somewhat well. Only about a quarter says they do not understand the process very well or at all.

93 percent say they know that Pennsylvania state law allows residents to choose their electricity

provider from companies that are willing to offer service in their area.

23 percent say they have switched their electricity provider in the last 12 months and 75 percent have

not switched.

Of those respondents who have not switched their electricity provider, 28 percent say they have

considered switching providers.

Understanding of the Process for Switching Electricity Providers

(n=800)

Two-thirds of 50+ residents in Pennsylvania say they have been contacted by electricity providers to try to get them to switch their electric company and most have been contacted by mail.

56 percent believe that electricity providers should not be allowed to sell their services door to door.

30 percent believe electricity providers should be allowed to sell their services door to door but with

restrictions such as the hours they may go to a potential customer’s home.

9 percent believe providers should be allowed to go door to door with no restrictions.

Very well, 37%

Somewhat well, 35%

Not very well, 14%

Do not understand

at all, 11%

Not sure/Ref,

3%


Contact by Electricity Providers (n=800)

Method of Contact by Electricity Providers (n=800)

Three-quarters of 50+ residents in Pennsylvania say it is extremely or very important that electricity providers that are required to offer service in certain areas continue to offer the “standard plan” at the lowest reasonable cost.

Importance of Continuing to Offer a “Standard

Plan”* (n=800)

*Percentages may not add up to 100 percent due to rounding.

Yes, 66%

No, 32%

Not sure, 2%

4%

5%

38%

74%

0% 20% 40% 60% 80% 100%

Email

Door to Door

Telephone

Mail

Extremely important,

37%

Very important,

37%

Somewhat important,

16%

Not very important,

3%

Not at all important,

3%

Not sure/Ref,

3%


The majority of 50+ residents in Pennsylvania opposes the proposal before the Public Utility Commission to change the “standard plan” and the change to state law allowing electric and gas companies to automatically increase rates every year.

About two-thirds oppose the proposal that would change the “standard plan” and potentially result in

higher electricity rates for customers who have not chosen a new electric provider.

About two-thirds also oppose allowing electric and gas utilities to automatically increase rates every

year to pay for infrastructure improvements and maintenance.

Opposition and Support for the Proposal to

Change the “Standard Plan” (n=800)

Opposition and Support for Annual Automatic

Rate Increases* (n=800)

*Percentages may not add up to 100 percent due to rounding.

More than two in five 50+ residents in Pennsylvania say that they would be more likely to vote for a candidate for state office who commits to strengthening consumer protections for electric utility customers and only six percent say they would be less likely to vote for a candidate who supports this.

Likelihood of Voting for a Candidate Who Commits to Strengthening Consumer Protections

(n=800)

Strongly oppose,

48%

Somewhat oppose,

15%

Neither support

nor oppose,

11% Somewhat support,

10%

Strongly support,

6%

Not sure/Ref,

10%

Strongly oppose,

45%

Somewhat oppose,

19%

Neither support

nor oppose,

10% Somewhat support,

18%

Strongly support,

5%

Not sure/Ref,

4%

More likely, 42%

Makes no difference,

45%

Less likely,

6%

Not sure/Ref,

7%


Demographic Profile of Respondents

About two in five survey respondents are ages 50-59 or 60-74, and about one in five are ages 75 or

older. Most respondents are married or living with a partner. The majority is retired and about a quarter

is employed full-time. The majority has a high school or post high school education but no college

degree. The majority has an annual household income of less than $75,000. Over a third are Democrats

or Republicans and less than one in five are Independents. The majority votes always or most of the

time. More than two in five identify themselves as conservatives, about three in ten say they are

moderate in their political views, and about one in seven say they are liberal. Over two in five are

AARP members.

8%

30%

59%

7%

36%

26%

13%

16%

2%

3%

2%

93%

3%

53%

9%

25%

40%

39%

21%

51%

49%

0% 20% 40% 60% 80% 100%

Never married

Separated/Divorced/Widowed

Married/Living with Partner

MARITAL STATUS

No HS diploma

HS diploma or GED

Post HS education no degree

College degree

Post graduate study/degree

EDUCATION

Hispanic

Other

Black

White

RACE/ETHNICITY

Unemployed

Retired

Employed PT

Employed FT

WORK STATUS

50-59

60-74

75+

AGE

Female

Male

GENDER

17%

28%

35%

57%

41%

10%

14%

29%

44%

6%

17%

34%

37%

16%

5%

20%

56%

0% 20% 40% 60% 80% 100%

$75k or more

$35k - <$75k

Less than $35k

INCOME

No

Yes

AARP MEMBERS

Not sure

Liberal

Moderate

Conservative

POLITICAL VIEW

Other

Independent

Republican

Democrat

PARTY AFFILIATION

Seldom/Never

Half the time

Most times

Always

VOTING BEHAVIOR


Full Methodology

The AARP Pennsylvania Electric Utilities Survey was conducted through telephone interviews with a sample of

800 respondents ages 50 and older drawn at random from the state of Pennsylvania. The interviews were

conducted in English by Precision Opinion from March 26 to April 1, 2012. The results from the study were

weighted by age and gender. The margin of error for the complete set of data is ±3.5%.

The telephone sample was provided by Marketing Systems Group according to Precision Opinion

specifications. Sample was drawn using standard list-assisted random digit dialing or Weighted (Type B)

(RDD) methodology. The RDD sample was released for interviewing in replicates which are representative

subsamples of the larger sample. Using replicates to control the release of sample ensures that complete call

procedures are followed for the entire sample. It also ensures that the geographic distribution of numbers called

is appropriate. Calls were staggered over times of day and days of the week to maximize the chance of making

contact with potential respondents.

Respondents were screened to insure that they were residents of Pennsylvania and age 50 or older.

The questionnaire was developed by AARP staff. In order to improve the quality of the data, the questionnaire

was pretested with a small number of respondents. The pretest interviews were monitored by Precision Opinion

and AARP staff.

The response rate for this study was 39 percent and was calculated using AAPOR’s response rate 3 method.

The cooperation rate was 92 percent as calculated using AAPOR’s cooperation rate 3 method.1

1 Calculated using AAPOR’s Outcome Rate Calculator Version 2.1, May 2003


2012 Pennsylvania Electric Utilities Survey

(Survey Sample: 50+ General Population in Pennsylvania)

(N=800, sampling error = ±3.5%)

INTRODUCTION/SCREENER

Hello, this is ______ calling from Precision Research, Inc., a national opinion research firm. We are not

telemarketers and are not trying to sell you anything. We would like to find out your opinions on your

electricity service. Your views are important and we would greatly appreciate your participation. All your

responses will be kept entirely confidential.

S1. We are interested in the opinions of people within certain age groups. Are you at least 50 years of age?

100% Yes [SKIP to S4]

0% No [GO TO S2]

0% Refused [THANK AND TERMINATE]

S2. Is there another member of your household who is at least 50 years of age?

100% Yes [GO TO S3]

0% No [THANK AND TERMINATE]

S3. May I speak with that person?

100% Yes, new person on the line [REPEAT INTRODUCTION AND GO TO S4]


S4. Are you a resident of Pennsylvania?

100% Yes [GO TO S5]


S5. What is the name of the electric company that you buy your electricity from? [DO NOT READ THE

LIST BELOW. THE LIST IS JUST FOR CODING PURPOSES. IF THE RESPONDENT GIVES A

COMPANY THAT IS NOT ON THE LIST BELOW THEN THANK THEM AND TERMINATE THE

INTERVIEW. ALL OF THE COMPANIES LISTED IN BOLD ARE THE LARGEST ELECTRICITY

PROVIDERS IN THE STATE AND PROBABLY THE ONES THAT WILL BE MOST OFTEN

MENTIONED.]


1% 01 Ambit Energy

<.5% 02 Amerigreen Energy

<.5% 03 Blue Star Energy

0% 04 Champion Energy Services

<.5% 05 Clean Currents

0% 06 Clearview Electric

0% 07 Commerce Energy Inc.

1% 08 Con Ed Solutions

<.5% 09 Constellation Energy

<.5% 10 Direct Energy

2% 11 Dominion Energy

10% 12 Duquesne Light

<.5% 13 Energetix Inc.

0% 14 The Energy Cooperative

5% 15 First Energy

<.5% 16 Gateway Energy Services Corporation

1% 17 IGS Energy

5% 18 Met Ed

<5% 19 Mxenergy

<.5% 20 North American Power

<.5% 21 Palmco Power, PA, LLC

7% 22 Peco Energy

16% 23 Penelec

5% 24 Penn Power

1% 25 Pike County Light & Power

<.5% 26 Planet Energy

22% 27 PPL

<.5% 28 Public Power, LLC

0% 29 Reliant Energy

0% 30 Respond Power, LLC

<.5% 31 Spark Energy, L.P.

0% 32 Sperian Energy Corp.

<.5% 33 Stream Energy Pennsylvania, LLC

<.5% 34 Superior Plus Energy Services, Inc.

<.5% 35 TriEagle Energy

1% 36 UGI

1% 37 Verde Energy USA, Inc.

0% 38 Viridian Energy

<.5% 39 Washington Gas Energy Services

20% 40 West Penn Power

0% Other company [THANK AND TERMINATE]

0% Not sure [DO NOT READ] [THANK AND TERMINATE]

0% Refused [DO NOT READ] [THANK AND TERMINATE]


Main Questionnaire

Q1. How concerned are you about the costs of your electricity going up? Are you extremely concerned, very

concerned, somewhat concerned, not very concerned or not at all concerned?

21% Extremely concerned

25% Very concerned

29% Somewhat concerned

13% Not very concerned

10% Not at all concerned

2% Not sure [DO NOT READ]

0% Refused [DO NOT READ]

Q2. In the past 12 months, has your electricity bill….[READ AND RANDOMIZE ITEMS A, B, AND C]?

15% Gone down

37% Gone up

42% Stayed the same



Q3. Do you believe your state elected officials are doing enough to lower the cost of your electricity bill?

18% Yes

58% No



Q4. Did you know that Pennsylvania state law now allows you to choose your electricity provider from

companies that are willing to offer electric service in your area?

93% Yes [GO TO QUESTION 5]

6% No [GO TO QUESTION 6]

1% Not sure [DO NOT READ] [GO TO QUESTION 6]

0% Refused [DO NOT READ] [GO TO QUESTION 6]

Q5. How well do you understand the process for changing your electricity provider? Do you understand the

process very well, somewhat well, not very well or do you not understand the process at all? (n = 745

Respondents who know that state law allows them to choose their electric company)

37% Very well

35% Somewhat well

14% Not very well

11% Do not understand it at all


<.5% Refused [DO NOT READ]


Q6. In the past 12 months, since March 2011, have any electricity providers contacted you about switching

from your current electricity provider?





Q7. How have these electricity providers contacted you? Did they contact you by telephone, mail, email, or

did they come to your home? [ACCEPT MULTIPLE RESPONSES] (n = 532 Respondents who have been

contacted by electricity providers about switching their service.)

38% Telephone

74% Mail

4% Email

5% Came to my home



Q8. In the past 12 months, since March 2011, have you switched your electricity provider?





Q9. In the past 12 months, since March 2011, have you considered switching your electricity provider?

(n = 615 Respondents who have not switched their electricity provider or are not sure or did not answer

question 8)

28% Yes

69% No



Q10. Currently, electricity providers are allowed to sell their services door to door. Which of the following

statements best reflects your opinion regarding electricity providers that sell their services door to door?

[READ AND RANDOMIZE STATEMENTS A, B, AND C]

56% Electricity providers should not be allowed to sell their services door to door at all

9% Electricity providers should be allowed to sell their services door to door with no

restrictions

30% Electricity providers should be allowed to sell their services door to door with

restrictions such as the hours that they go to a potential customer’s home




Q11. [READ SLOWLY] In most areas of Pennsylvania there are several electricity providers that residential

customers can choose from. Customers may also continue to get electric service from the provider that in the

past was the only electricity provider and is still required to offer service in their area; and the law requires that

these providers offer a “standard plan” at the lowest reasonable cost. The electric rates charged under the

“standard plan” cannot be increased more than once every three months. How important is it to you that those

electricity providers that are required to offer service in certain areas continue to provide a “standard plan” at

the lowest reasonable cost? Is it extremely important, very important, somewhat important, not very important,

or not at all important?

37% Extremely important

37% Very important

16% Somewhat important

3% Not very important

3% Not at all important



Q12. A proposal has been made by the Public Utility Commission that would significantly change the

“standard plan” offered by providers that are required to serve an area and could result in increased electric rates

for customers who have not chosen a new electricity provider. How strongly do you support or oppose this

proposal that would alter the current “standard plan” and could result in increased electricity rates for customers

who have not chosen a new electricity provider? Do you strongly support, somewhat support, neither support

nor oppose, somewhat oppose, or strongly oppose?

6% Strongly support

10% Somewhat support

11% Neither support nor oppose

15% Somewhat oppose

48% Strongly oppose



Q13. A new law in Pennsylvania allows electricity and gas utilities to automatically increase rates every year in

order to pay for infrastructure improvements and maintenance like pipes and utility poles. How strongly do you

support or oppose allowing electric and gas utilities to automatically increase rates every year to pay for

infrastructure improvements and maintenance? Do you strongly support, somewhat support, neither support nor

oppose, somewhat oppose, or strongly oppose?

5% Strongly support

18% Somewhat support

10% Neither support nor oppose

19% Somewhat oppose

45% Strongly oppose




Q14. If a candidate for state office in Pennsylvania commits to strengthening consumer protections with regard

to electric service, would you be more likely to vote for the candidate, less likely, or would it make no

difference?

42% More likely

45% Make no difference

6% Less likely



Demographics

The following questions are for classification purposes only and will be kept entirely confidential.

D1. RECORD RESPONDENT’S GENDER. ASK ONLY IF ABSOLUTELY NECESSARY:

“To ensure it is recorded accurately, could you please state your gender?”

49% Male

51% Female

D2. What is your age as of your last birthday? [RECORD IN YEARS]

40% 50 – 59

39% 60 – 74

21% 75+

0% Not Sure

0% Refused

D3. What is your current marital status? Are you….….[READ EACH ANSWER CATEGORY]?

57% Married

2% Not married, living with your partner or significant other

1% Separated

10% Divorced

19% Widowed

8% Or are you currently single and never married



D4. IF D3 = 1 ASK: “Are you or your spouse currently a member of A-A-R-P?” IF D3 =2 ASK:

“Are you or your partner currently a member of AARP?” OTHERWISE ASK “Are you currently a member of

AARP?”

41% Yes

57% No




D5. What is the highest level of education that you completed? [READ EACH ANSWER CATEGORY]

7% 0 to 12th

grade, but with no diploma

36% High school graduate or equivalent

13% Post high school education, but with no degree

13% 2 year degree

13% 4 year degree

5% Post graduate study, but with no degree

11% Graduate or professional degree



D6. Which of the following best describes your current employment status? [READ EACH ANSWER

CATEGORY]

5% Self-employed full-time

2% Self-employed part-time

20% Employed full-time

9% Employed part-time

53% Retired and not working at all

3% Unemployed and looking for work

6% Or are you not in the labor force for other reasons



D7. Do you own or rent your primary residence?

87% Own

11% Rent



D8. What type of home is your primary residence?

81% Single family home

2% Mobile home

4% Town home or duplex

5% Apartment

2% Condominium or coop

3% Something else


D9. Thinking about who lives in your household, do you currently….[INSERT AND READ ITEMS A

THROUGH C BELOW]?

a. Have any children under age 18 living with you

8% Yes

90% No

<.5% Not sure [DO NOT READ]



b. Have any children over age 18 living with you

18% Yes

80% No

<.5% Not sure [DO NOT READ]


c. Have any children away at college

8% Yes

90% No



D10. Are you of Hispanic, Spanish, or Latino origin or descent?

2% Yes

96% No



D11. Which of the following best describes your race? [READ EACH ANSWER CATEGORY]?

93% White or Caucasian

2% Black or African American

1% Native American or Alaskan Native

<.5% Asian

<.5% Native Hawaiian or other Pacific Islander

1% Or are you some other race? [Please specify:________]



D12. Thinking about your state elections for Pennsylvania Governor and Legislators in the last 10 years,

which of the following best describes your voting behavior? Would you say you vote always, most of the time,

about half of the time, seldom, or would you say you never vote?

56% Always

20% Most of the time

5% About half of the time

6% Seldom

11% Never




D13. Do you consider yourself to be a ….[READ AND RANDOMIZE ITEMS A THROUGH C BELOW,

THEN INSERT “SOMETHING ELSE” AT THE END]

37% Democrat

34% Republican

17% Independent

6% Something else



D14. In general, would you describe your political views as very conservative, somewhat conservative,

moderate, somewhat liberal, or very liberal?

16% Very conservative

28% Somewhat conservative

29% Moderate

9% Somewhat liberal

6% Very liberal



D15. What is your 5-digit zip code? ___ ___ ___ ___ ___ (100%)

D16. We realize income is a private matter and so rather than ask you anything specific about your income,

I’d like to ask you to please stop me when I get to the category that includes your household’s income before

taxes in 2011. Was it….[READ EACH ANSWER CATEGORY]?

4% Less than $10,000

14% $10,000 to less than $20,000

17% $20,000 to less than $35,000

13% $35,000 to less than $50,000

7% $50,000 to less than $60,000

8% $60,000 to less than $75,000

8% $75,000 to less than $100,000

4% $100,000 to less than $125,000

1% $125,000 to less than $150,000

1% $150,000 to less than $200,000

2% $200,000 or more



That was our last question for tonight/today. Thanks you very much for taking the time to help us out.

Have a great day/night!

AARP is a nonprofit, nonpartisan organization with a membership that helps people 50+ have independence,

choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not

endorse candidates for public office or make contributions to either political campaigns or candidates. We

produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation

magazine with over 35.1 million readers; AARP Bulletin, the go-to news source for AARP's millions of

members and Americans 50+; AARP VIVA, the only bilingual U.S. publication dedicated exclusively to the

50+ Hispanic community; and our website, AARP.org. AARP Foundation is an affiliated charity that provides

security, protection, and empowerment to older persons in need with support from thousands of volunteers,

donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the

U.S. Virgin Islands. The views expressed herein are for information, debate, and discussion, and do not

necessarily represent official policies of AARP

State Research brings the right knowledge at the right time to our state and national partners in support of their

efforts to improve the lives of people age 50+. State Research consultants provide strategic insights and

actionable research to attain measurable state and national outcomes. The views expressed herein are for

information, debate, and discussion, and do not necessarily represent official policies of AARP.

AARP staff from the Pennsylvania State Office and State Research contributed to the design, implementation

and reporting of this study. Special thanks go to AARP staff including Ray Landis, Manager of State

Advocacy, in Pennsylvania; Rachelle Cummins, Cassandra Cantave, Angela Houghton, and Darlene Matthews,

State Research; Janee Briesemeister, State and National Group; and Michael Schuster, Office of General

Counsel. Please contact Joanne Binette at 202-434-6303 for more information regarding this survey.

Research and Strategic Analysis

For more information about this survey, please contact Joanne Binette at:

202.434.6303 or e-mail [email protected]


jcrawford

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