The Administration & The Allegheny Power Bill

As we near a close in the dispute between administrators at Penn State and Allegheny Power over the rising cost of electricity and how those costs will impact student room and board rates, I can’t help but sit in amazement that this was ever a public problem in the first place.

Case finalized; rates may increase $18M (TDC) Dec. 10 – After the state Public Utility Commission (PUC) finalized the case between Penn State and Allegheny Power on Dec. 4, the university is preparing for its electricity rates to increase by as much as $18 million during the next two years beginning Jan. 1, a university official said.

Though Penn State plans to appeal the decision in Commonwealth Court, it is not likely a decision will be made on the appeal before Jan. 1, university spokeswoman Lisa Powers said, adding the likely increase in rates is “an unfair action.”

“We know it will take a while to work its way through the court system once we file it. So, in reality, we are going to be paying higher prices for our electric costs,” Powers said.

The increase in costs could result in an additional $25-per-semester increase in room and board rates to defray rising electricity costs if the university’s appeal is denied, according to a university press release.

If one were to read only today’s article, excerpted above, one would have little idea how it came to be that Penn State was confronted with this mess to begin with. To find out, we have to go back a bit further in time…

Electricity costs to rise (TDC) Sept. 26 – The company notified the university in 2004 that it had to apply to participate in a petition case if it wanted to extend its rate caps beyond Dec. 31, 2008, Colafella said.

But Powers said the company’s notifications were unclear and did not explicitly indicate that Penn State would be paying market rates two years before any other customer in the state.

“We don’t feel that that was clear,” Powers said. “We feel we are being treated inequitably.”

Colafella said Penn State missed the opportunity to extend its rate caps.

“They could have made an argument to participate, but they did not participate,” he said.

So, we now recall how this all began.

What the dispute boils down to is this: the administration received notice from Allegheny Power in 2004 that the rates for the University would increase within four years.

Whoever received the notice in the administration didn’t understand what he or she was reading, apparently opted not to ask a superior or contact Allegheny Power, and now 38,000 undergraduates are being stuck with the bill four years later.

“Obviously we don’t have $9 million just sitting around,” Powers said, adding the university plans to appeal the decision. “If you didn’t plan to spend $9 million in your budget, it’s not there to be spent. This would be an additional burden on students.”

On this final quote, excerpted from the Sept. 26 article in The Daily Collegian, we have another example of the administration’s status quo attitude toward the running of our University. When an unexpected bill comes in, they’ve got no savings account.

The finances are so precisely budgeted that nothing can be spared or cut, so, naturally, they let the bankers loose on the undergraduates. Isn’t the point of responsible governance to ensure your institution is prepared to cope with the unexpected?

Our administrators need to get out of the comfortable yet deadly mindset that students are open pocketbooks, ripe for picking from whenever necessary.

Frankly, I’d rather turn out my light than pay another increase in student tuition and fees.