Western Pennsylvania residents, businesses and industries are about to find out how much electricity costs.

Until recently, there was a cap on how much utility companies could charge customers for electricity.

But the passage of the state Competition Act in 1996 changed that, with rate caps already expiring across the state. That change is expected to hit the western region by January 2011 at the latest.

What has happened, what is about to happen and what can be done to once again bring down the cost of electricity and electrical generation is a complicated issue.

Ty Christy, a commissioner with the state Public Utility Commission who is from Renfrew, is working to reverse the trend toward more expensive electrical generation and the passing of those costs on to consumers.

Christy is specifically concerned about what higher energy bills will do to industry in the state, considering competition from other states and countries.

Electrical distribution costs have been uncapped for years with these bills rising between 15 percent and 35 percent when those caps came off, Christy said.

But when Penn Power recently removed the caps from its generation costs, residential bills went up 33 percent, while commercial bills rose 50 percent to almost 100 percent.

"Signature Aluminum in Greenville had its electricity bill go from $1 million annually to $2 million as a result of the cap removal," Christy said.

Alan McCoy, spokesman for AK Steel, said the company's Butler Works in Butler Township spends $40 million annually on electricity, and when the rate caps come off, that cost is expected to jump 80 percent.

One of the biggest problems the cap removal process has caused, Christy said, is that generation costs are now governed by natural gas costs, which fluctuate with oil prices.

The organization that oversees electrical generation in the state is the interconnect pool for Pennsylvania, New Jersey and Maryland, called the PJM. That agency regulates billing for power generation.

PJM has ruled that electrical plants that use natural gas for generation are supposed to come online when electrical demand is higher than what initial generation plants can produce. Those are ones that use cheaper methods of generation such as coal, nuclear or hydroelectric plants.

The way deregulation rules were written, when the natural gas plant comes online, then all electrical plants that had been supplying power are able to charge customers the more expensive natural gas generation costs.

Christy is looking to see how that billing process can be changed, including pushing to get changes made in regulations by the Federal Energy Regulatory Commission.

Pennsylvania Sens. Arlen Specter and Robert Casey have sent that commission a letter asking it to investigate these changes.

Or, Christy said, perhaps PJM will need to reregulate the industry — bringing the rate caps back — as other interconnect pools have done.

"We need to address our generation needs. People have not reduced their electrical use, but increased it," he said.

"At the same time, no one is building new generation plants. We have to find a solution to these problems now, not later."