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Bill Just Cash Pipeline For Gas Companies

September 22, 2018

Our commonwealth is blessed with a wide array of energy sources, including oil, coal, nuclear and hydro-powered power plants. Reliance on renewable sources – solar, hydro and biofuels – is rising as well, a testament to the changing nature of how we heat our homes and power our factories and worksites. It’s critical for our state economy that every energy provider in this sector has the opportunity to thrive, and that requires a fair playing field. Unfortunately, legislation pending in Harrisburg radically would change longstanding state law and tilt the field in favor of the natural gas industry over all other providers — at the expense of consumers. HB 107 would allow natural gas distribution companies to add a surcharge to customers’ bills to help pay for new pipelines to provide gas access to new customers, either commercial or residential. This legislation is patently unfair to consumers and bad policy for the state. In effect, it calls for a new tax on one group of Pennsylvanians to subsidize an industry that does not need to reach into consumers’ pockets to make a profit. Natural gas prices are relatively low, so legislation to increase access to this source may seem appropriate. But I don’t have a crystal ball — and neither does any lawmaker. It is just not possible to know what the price will when next winter hits. Still, many experts believe that natural gas prices will rise due to market forces domestically and abroad. Last year’s brutal cold stretch should provide a lesson. During this extended freeze, hospitals, schools and other large facilities began to have their service interrupted by their natural gas suppliers under the terms of their agreement to have service stopped in exchange for a lower rate. Because of these contractual obligations, power generators turned to the oil markets, a move that strained oil markets to the limit. Without a viable oil sector, some consumers would have had a hard time heating their homes. Relying on one source literally can leave folks out in the cold. Lawmakers also need to understand that HB 107 would upend longstanding law and regulatory practice as well to the advantage of some utility shareholders — again at the expense of taxpayers. For decades, our laws and regulations properly have dictated that the cost of expanding profitable gas distribution systems should be borne by utility shareholders, not existing customers. This has been the rule for all regulated utilities, and rightly so. Utilities have many burdens but also many benefits as compared to the private sector. Pennsylvania taxpayers should not be expected to pay a new energy tax to help create better returns for shareholders. HB 107 by way of comparison, would compel cable television subscribers in Dauphin County to pay for a cable company’s expansion in Pittsburgh — so that the cable provider could sell more subscriptions to benefit its shareholders. The market, not the state Legislature, should drive natural gas expansion. There is no compelling reason why the natural gas sector should be given this special treatment. This industry does not need a handout. In fact, according to the Energy Information Administration, Pennsylvania’s natural gas production was almost 10 times larger in 2017 than in 2010.

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