Public utilities are required under Pennsylvania law to set rates that are fair to its ratepayers and the company’s shareholders both. When a utility proposes its rates for approval by the Pennsylvania Public Utility Commission, it does so by setting a capital structure, which is the relative percentage of equity and debt that the company uses to finance its investments. The Pennsylvania Office of Consumer Advocate has mathematically shown over and over that the use of capital structures where the percentage of equity is greater than the percentage of debt results in ratepayers paying tens of millions of dollars every year in increased rates, which only serves to increase shareholder profits. In fact, in the competitive business world, capital structures are mainly the reverse of what we see proposed by utilities in rate cases.
 
For this reason, I plan to introduce legislation requiring public utilities to use a standard capital structure consisting of 50% equity and 50% debt for ratemaking purposes. This structure is fair to shareholders and ratepayers, without affecting the actual capital structure of utility companies.
 
Please join me in supporting this important legislation to put people over profits and effectively save ratepayers tens of millions in increased rates each year.