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House Committee Discusses Bill To Change How Municipalities Operate Their Own Electric Systems

The House Local Government Committee Tuesday held a hearing on House Bill 1405 (Bernstine-R-Beaver) affecting the 35 communities across the state that operate their own municipal electric systems (sponsor summary).

House Bill 1405 was introduced last year in response to concerns raised by residents of Ellwood City in western Pennsylvania. Residents were seeing significant fluctuations in their electric bills from month to month, with some struggling to afford their monthly bills.

The legislation is designed to address that by outlining standards by which “reasonable and uniform” rates would be established and requiring any rate changes to be discussed at publicly advertised meetings.

The bill also aims to prevent municipalities from transferring any money generated by electric services to support the community’s general fund budget.

Borough officials from Grove City, Mercer County, and Ephrata, Lancaster County, testified that such a change could lead to property taxes being doubled because of the lost revenue.

They suggested that residents and their elected officials in each community should be able to determine for themselves the best way to handle their electric services and overall budgets.

“We scheduled this bill for a public hearing because it is a controversial measure for those municipalities that sell electricity and are not hearing widespread complaints,” said Rep. Kate Harper (R-Montgomery), Majority Chair of the Committee. “Moreover, those municipalities that sell electricity contend their rates are at or below the market level for other power companies and that they use revenue from the electric department to subsidize their general fund and keep their property taxes lower than they would be without the electric revenues.”

The hearing featured testimony from those who support the bill as well as those who oppose it.

Those testifying at the hearing included Bernstine; Brian Bush, Ellwood City business owner; Vance Oaks, president of PA Municipal Electric Association and borough manager of Grove City Borough; Bob Thompson, borough manager of Ephrata Borough; Patrick Cicero, executive director of PA Utility Law Project; and Beverly Annarumo, president of Ellwood City Hospital.

Other testimony submitted to the Committee included: PA State Association of Boroughs, PA Manufacturers’ Association, Service Employees International Union Local 32BJ, Western Butler County Authority and others.

Click Here to watch a video of the hearing.

Rep. Kate Harper (R-Montgomery) serves as Majority Chair of the Committee and can be contacted by sending email to:   Rep. Robert Freeman (D-Lehigh) serves as Minority Chair and can be contacted by sending email to:


Bill Would Restrict Middletown’s Use Of Electric Funds, Might Mean Increases In Taxes

Letter: Lawmaker’s Electricity Bill Would Bring Big Tax Hikes Locally

Op-Ed: Bill On Local Electric Companies Raises Moral, Legal Questions

Editorial: Lawmaker’s Feud With Local Electric Company Should Stay That Way

[Posted: Feb. 14, 2018]


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