An advocate for low-income electricity consumers challenged the assumption yesterday that the expiration of price caps in Pennsylvania will result in spikes in electricity rates similar to those that have occurred in other states that have deregulated electricity.

In fact, said David Hughes, executive director of Citizen Power, since Pennsylvania producers' generation capacity is 60 percent higher than demand, "We should almost assume that there should not be" increases in electric rates.

Mr. Hughes was one of five witnesses giving testimony before the Environmental Resources and Energy Committee of the State House of Representatives, in a hearing conducted at the Comfort Inn in Monroeville.

Also on the docket were Jay Apt, executive director of Carnegie Mellon University's Electricity Industry Center; Terrance Fitzpatrick, general counsel for the Electric Power Generation Association; Ray Landis, advocacy manager for AARP Pennsylvania; and Commissioner Tyrone Christy of the Pennsylvania Public Utility Commission.

The purpose of the hearing was "to solicit testimony on the proactive policies that will protect Pennsylvania from electric price volatility and prevent soaring rate hikes before they occur," committee chair Camille "Bud" George said.

The speakers addressed a thicket of issues -- the desirability of long-term contracts versus spot markets to determine wholesale pricing, the relative roles of the state and federal governments in regulating energy, the degree to which increases in electricity rates have been driven by provider costs vs. pure profiteering -- and provided a range of policy suggestions.

Mr. Hughes suggested giving up on deregulation entirely, and establishing a new regulatory regime.

"Electricity cannot be left to the volatility of the market," he said.

Under the system by which electricity generators sell energy to distributors, as more electricity is used, more providers come on board to supply it, at increasing rates. Mr. Apt's No. 1 suggestion was, "Get those high-priced generators off the grid by reducing demand."

Mr. Fitzpatrick also encouraged reducing demand, along with creating phase-in plans to allow consumers to adjust to higher prices gradually.

Mr. Landis said the state should consider creating a public power authority.

"That may not be as absurd as some might think at first glance," said David K. Ledvansky, D-Foward, adding that such an authority could be an example of "government capitalism," and could provide the state with better insight into electricity markets.

"Sometimes the only way to get real information about what the market is doing is by running a business yourself," he said.

Mr. Christy, being careful to note that he was not speaking for the PUC, seconded the idea of a public power authority. He also encouraged the construction of new power plants that would produce power at rates set by long-term contracts, rather than by daily and hourly spot markets of PJM Interconnection, the regional transmission organization that manages the electricity grid for most of Pennsylvania.

Effective May 31, Duquesne Light withdrew from PJM because it felt the organization's pricing model for reserve capacity made electricity too expensive. Duquesne Light is now part of a different regional transmission organization, the Midwest ISO.