Peco: What’s Happening

June 15, 2010

From Peco Website

In a word, deregulation.

Deregulation has transformed utilities like PECO from a company that makes electricity and delivers it to our customers, to a company that now purchases electricity from electric generators and delivers it to customers through our neighborhood poles and wires.

It may surprise you to learn that for the last decade, electricity prices have been capped to protect customers economically through a time when deregulation changed the utility business. During this period, prices remained set, regardless of what prices were doing in the marketplace.

The rate caps will come to an end. Beginning January 1, 2011, the prices PECO and our customers pay for electricity will be based on electric market pricing. We have a sound strategy for purchasing power for you. Currently, we are buying power at several different times and in a variety of ways to get the best possible prices.

At the same time costs to operate our electric and natural gas systems also have been increasing. So the bottom line for customers (and for PECO) is gas and electricity will cost more.

To learn more about how Deregulation will effect your electric bill email george@hbsadvantage.com or call 856-857-1230

PECO is unleashing multiple programs to try to prepare their customers for increases in their electric rates in 2011.  The PA Public Utilities Commission announced that Pennsylvania utility companies will be increasing the rates for electricity delivery service in 2011.  In addition, price caps will be expiring in 2011 in the PECO area – as well as Met-Ed, Penn Electric, and West Penn – which are expected to increase default generation rates by as much as 20%.

PECO wants to help customers deal with the increases, so they have several programs including the PECO Smart Home E-Audit, Smart Lighting Discounts, Smart Home Rebates, and Smart Appliance Recycling.  They are pretty smart programs. But the smartest way customers will be able to reduce their electricity bill is by looking for an alternative supplier that will offer a lower rate against the PECO price. 

PECO is going to continue to deliver power to those customers who they are currently delivering to and they’ll continue to send invoices out.  The decision to choose an alternative electric company will be a simple choice to pay less.  There will be more information and rates for alternative providers as we get closer to 2011.

Before Deregulation
Before the Electricity Generation Customer Choice and Competition Act became a reality, all of the electricity purchased or transmitted in a specific region was sold by one company. In the Philadelphia region that company is PECO Energy. PECO held full rights to operate a monopoly in this region and consumers didn’t have the option to buy from any other electric supplier.  Before deregulation, electric utilities were in charge of the generation, transmission and distribution of electricity. They worked as a monopoly, and had the only rights to sell electricity in a particular region.  There are 9 electric utilities across the state of Pennsylvania that were operated under a regulated monopoly. This means that the utility supplied the power, read the meters, fixed any problems, and determined what the power sources of electric generation would be. Because electricity consumers had no option to switch companies, utilities were able to install any facilities that they thought were necessary, with little input from residents and consumers. 

After Deregulation
Now that the Electricity Generation Customer Choice and Competition Act has been fully put into action in Pennsylvania (As of January 1, 2000) every resident has the option to choose the company that generates their electricity.  Generation is now competitive. Electricity consumers can shop for a new generation supplier. The local utility is still responsible for delivering that electricity through the transmission and distribution lines. The electric utilities that once operated as controlled monopolies are now called “electric distribution companies”. They are responsible for the transmission and distribution of electricity to homes and businesses (the poles and wires).  Because the regional monopolies are still responsible for the transmission and distribution of electricity, distribution will be as reliable as it was before.  Your current distribution company (old utility) will still be in charge of certain things.  Problems with bills, downed power lines, power outages, billing complaints or concerns.  Electric distribution companies will also be called the “provider of last resort”. The provider of last resort is obligated to provide electricity service to any customer who looses service from any new electricity supplier, or are denied service from any new supplier.

It might seem a little confusing, but it’s not all going to happen overnight, all at once.  Telephone deregulation is still changing and it’s been about 10 years for that.  As technology improves and evolves, you are being presented with more choices.  It will probably be the same way for electric deregulation.  As the process evolves, an educated consumer is the best consumer.

Our Perspective:

Peco is about to release an electric price to compare that companies will be able to use as a basis to make an objective decision.  Current open market rates are very competitive and this should present a very interesting outcome.

Deregulation began in the late 1990’s, designed to bring competition to the market and provide choice and savings to the public. The deregulated market thrived for the first 5 to 6 years and then as a result of the Iraq war and Hurricane Katrina, market prices jumped and took the air out of the balloon. At the same time, Pennsylvania imposed rate caps and kept their prices well below the open market prices.

Beginning January 2011, these rate caps will be lifted and Peco customers will once again enter the deregulated market. As we wait to see where Peco prices will be in Jan 2011, clients should begin to explore what opportunities may exist. All we need is a copy of your latest Peco invoice.

Hutchinson Business Solutions is an independent deregulated energy management company. We have been providing dereglated energy solutions for our clients for over 10 years. Our clients are finding savings from 10% to 30% on the deregulated energy supply bills.

To learn more on how this opportunity may effect you, email george@hbsadvantage.com or call 856-857-1230.

How much are you currently paying for your voice and data services?

What services are included on your current bill?

When I ask this question to most customers, they shrug and say, ” Look at the size of this bill, I don’t even know where to begin.”

This is the result of prvider intimidation. They really don’t want you to know what you are paying for. Most customers may say, ” We’re paying 3 cents a minute.” The real question may be, how much is that 3 cents a minute really costing you?

Finding the answer to this question has now been simplified. Hutchinson Business Solutions offers a free review of your current voice and data charges. All we need is a copy of your latest bill. Trying to reconcile these questions may prove to be a challenge that your business may not be able to undertake because it is not your core business. However, most business owner’s can save money with a little research into which business telecom services are best for their situation.

A competent and informed business voice and data consultantis vital to assist your business make the right decision every time. Whether you are an existing business, a franchise, or a new business you need to ensure that your telecommunication needs are not only met, but met at a cost effective rate. There are many business telecommunications sales representatives out there who will only try to sell you the plan that gives them the highest commission. A wrong decision will see your business locked into expensive contracts for mobile, fixed line and data services that do not meet your needs.

Many businesses purchase telecommunications on the phone from an unknown sales person and are pressured to sign by way of a recorded verbal contract. Not surprisingly when this decision is pressured the end result is often less than ideal, it could be expensive, and it could cripple your business. The quality of the service provided and the quality of the telecommunications management team is imperative to your success.

Whilst many business decisions need to be made quickly, your telecommunications need to be right, they need to be suitable for your business now and throughout the consequential contracted period. You need to find a telecommunications consultant you can trust and ask them the following questions to ensure that they have the best interests of your organization at heart and are capable of supporting your telecommunications needs.

1. Can the business telecommunications consultant provide you with an independent analysis of your current bills against the plan they recommend, and other comparable plans in the marketplace?

Many times the customer has been “sold” a service which has not been quantified in an analytical manner. We know that communication costs are an ever increasing cost to doing business and we respect that it is difficult for any organisation to employ or train a staff member to work though this minefield.

The key to having complete understanding of your telephone bills and your telephone spending patterns is in the professional telephone bill analysis

2. Can the business telecommunications consultant provide you with testimonials from companies that are of comparable size to your organisation?

Testimonials are vital. You need to be sure that the business telecommunications consultant you are dealing with is from a reputable company with many happy clients.

3. Can the business telecommunications consultant arrange for the seamless transfer of your services should you need to change carriers?

Once your business telecommunications consultant has identified the business telecommunication rates and services that are best for you and these are accepted by your business can they arrange for the transfer of your telecommunication services to the contract selected by yourselves? Professional business telecommunications consultants should ensure that you are not inconvenienced.

4. What kind of ongoing support does your business telecommunications consultant provide?

A good business telecommunications consultant will not only sign you up to a long term contract, but will keep you advised of better deals available in the market place, and proactively and constantly negotiate better deals for you, the customer.

Hutchinson Business Solutions have been providing solutions to these problems for over 10 years. Our clients are saving from 15% to 40% by shopping the market and providing solutions that promote efficiencies and savings.

To learn more email george@hbsadvantage.com or call 856-857-1230

Every company is scouring the books for potential cost savings these days. How about your telecom expenses. Do you think there is any potential for savings there? I’ll bet there is.

Stop burning money when you cut your telecom expenses.First thing you need to do is collect those monthly bills and take a close look. For starters, just pick last month’s bill. What are all those line items that you are paying for? You need to know what each item is and why you have it.

In a larger organization, you can easily drown in the detail of every long distance phone call. I’d suggest just a quick scan to see if what sticks out like a sore thumb. Are a few users running up bills that are ten times everybody else’s? Do they have jobs where you’d expect that?

Especially be on the outlook for services that were ordered a long time ago but aren’t being used anymore. Do you have a special FAX line with no FAX machine attached? Are there a dozen phone lines coming into a building that has only a hand full of employees? How about dedicated point to point lines that link to locations you don’t even own or lease anymore? Cell phones that are sitting in drawers unused but still activated? All of these things are candidates to cancel immediately.

Highlight the rest of your telecom line services and how much you are paying for them. Generally data lines have a fixed cost per month. Telephone lines have both a fixed cost and a per minute cost. You want to know the bandwidth and cost of each data line and the per minute rate and number of minutes for each voice line. Why? So you can comparison shop, of course.

Oh, but isn’t that a painful and horribly time consuming process? Not anymore. Hutchinson Business Solutions is an independent voice and data management consultant. We represent all the major providers presenting cost saving solutions for you business. We offer a free analysis of your existing charges and will provide a solution that will premote efficiency and provide savings available thru an array of competitive voice and data line and networking services. There may be several options available for each of your needs.

All we will need is a copy of you latest provider invoice. To learn more email george@hbsadvantage.com

By Chrysa Smith

It’s been said that choice is the ultimate luxury. Since 1999, New Jersey businesses and residents have had the luxury of choosing which utility company from which to purchase gas, electricity, and heating fuel; but with choice often comes challenge. Along with their new options and the predicted benefits of a more competitive marketplace, New Jersey residents have also had to deal with the changes and questions raised by the state government’s deregulation of energy providers.

The Balance of Power

In 1999, the New Jersey Board of Public Utilities (NJBPU)—the governing body for electric, oil and natural gas services—introduced a bill to deregulate the state’s energy industry for residential customers. (New Jersey’s commercial energy market had been opened up earlier in what some say was an attempt to keep local corporations happy and committed to staying put.)

The goal of the Electric Discount and Energy Competition Act (EDECA) was to enable New Jersey energy consumers to shop around and chose the energy provider that best suited their budget and service requirements. The free-market rationale hinged on the prediction that enough healthy competition between providers would keep prices down while offering better service and reliability to customers. Under the auspices of the federal Department of Energy, New Jersey took measures to safeguard free market competition for electricity and gas, including the requirement for the NJBPU to “unplug” power stations with higher costs than other available energy sources.

// //

According to Betty Kennedy, public relations coordinator for Conectiv Power Delivery, an independent utility provider based in Carney’s Point, New Jersey. “Up till 1999, when the state voted to restructure the energy industry, each company had a specific service area.”

Conectiv—which services eight counties in southern New Jersey—claims that the deregulation has reduced their customer’s rates by 10.2 percent, saving them a cumulative $290 million during the years from 1999 to 2003.

But the story is a bit more complex. Conectiv, and the states other 21 licensed electric suppliers and 29 licensed natural gas suppliers are, as their names indicate, suppliers. They provide the hardware—the lines and cables—and once those are in place, they also provide the power that flows to New Jersey commercial and residential customers. That power may have been purchased from companies several states away, or it could come from oil, coal or renewable energy sources. Energy may even be bought and sold much like the stocks in an investment portfolio. If it’s important for a customer to know where the cool flow from their central air system comes from, or the juice that runs the building elevator, post-deregulation, that customer now has a voice.

According to Terry Moran, manager of Retail Choice for Public Service Electric & Gas (PSE&G) in Newark, New Jersey’s largest energy provider, “Since the transition period for New Jersey, the largest change is that we no longer own generation. We are now a pipes-and-wires company.”

Enter the ESCOs

Though the playing field has changed somewhat, the delivery companies—called Energy Service Companies, or ESCOs – have remained essentially the same. Since deregulation, it’s the transmission that has changed. Out-of-area transmission companies, called third-party suppliers, are now in competition with area companies who once dominated their own market.

“The restructuring act has allowed New Jersey to move forward to look for better prices in the state,” says Kennedy. “Our customers pay less than they did in ’99.” This has been accomplished, thanks in part to the annual Basic Generation Service, or BGS, auction. Each February, according to PSE&G spokesperson Karen Johnson, transmission companies gather together to offer energy packages to service providers. Suppliers can pick up an energy contract for a year or two, or more at wholesale auction.

// //

“For the customers that have chosen to stay with [us],” says Johnson, “we secure the power through the annual energy auction that allows them to buy in a wholesale [market], where prices are competitive. PSE&G is the utility that is part of the Public Service Enterprise Group (PSEG) parent company, who also owns PSEG Power—the unregulated generation side.”

And, says Kennedy, much like commodities of all kinds, the buying can be ‘locked in’ at a specific rate—called fixed pricing—or float with the market value through its natural cycle of ups and downs—called variable pricing.

Not a Flawless System

While the provision of greater choice and potentially lower costs seems appealing, the program has not been without its problems. According to a report published by The New Jersey Public Interest Research Group’s Citizen Lobby and Law & Policy Center in Trenton, “New Jersey pays 50 percent more than the national average for our electricity. And energy providers, for the most part, are offering the same old fossil-fuel and nuclear-generated electricity.” For the programs first four years, the rates were frozen for electric utilities, and some customers actually saw savings of 10 percent on their electric bills. Yet now, as pricing caps come off kilowatt rates, it remains to be seen what the full affect will be.

“One of the biggest fallacies of deregulation,” says Janet Garofalow, assistant vice president and manager of sales and marketing for Castle Power LLC—a Harrison, New York-based fuel oil and natural gas service provider with a satellite office in Englewood—”is that we can’t guarantee that we can save our customers money in comparison to the utility commodity cost when they fix a price at a certain time. We can’t predict what the market will do going forward.”

Garofalow goes on to explain that to a large extent, the market is controlled by the weather. “In the winter, one reason for gas prices rising is the cost of transportation for the gas, due to increased demand. In the winter of 2002, when we never wore a winter coat, pricing came down.” To a large extent, the energy market is a gamble in commodities futures—where knowledge of the market and good planning come into play.

Maneuvering Through the Maze

One of the biggest attractions to third-party energy suppliers has been the advent of aggregation. And it may just be one of the largest benefits to multiple dwelling communities sharing real estate management companies. According to Alyssa Weinberger, director of regulatory affairs for Hess Energy Marketing in Woodbridge, “Buying bulk would be advantageous. With an aggregation of individual customers into larger groups, you can get better deals.”

// //

Hess—along with several other suppliers who deal with commercial and industrial customers—have done just this for multiple dwelling communities, and even area school districts, in order to reduce costs. Management companies should be aware of these and other options for energy conservation under current energy systems.

Most ESCOs and third party suppliers will tell you that their marketing efforts have not been anything like those of the deregulated phone companies, and that the resulting switching of suppliers—at least on the residential side—has been marginal. Right now, the BPU estimates that third party suppliers represent less than six percent of service to gas customers and fewer than 3.5 percent for electric supply switchers.

According to Johnson, PSE&G currently has 1.6 million gas customers and two million electric customers. “Some have both gas and electric,” says Johnson. “We serve about 75 percent of the state’s population on a north-south diagonal that follows the New Jersey Turnpike.”

“The percentage of customers who have changed is not large,” adds Moran. “On the electric side, most of those who have switched have been the largest customers. We roughly have about 18 percent of our [megawatt] load switched. For gas, we have roughly 30,000 customers who have switched to third party suppliers.”

If you think your association might benefit from joining that percentage, all it takes to make a change is a phone call and a signed contract—which some suppliers say can be done by a board member. Yet, in this transition period, and in the age of all too common legal proceedings, having the input of an informed accountant and an attorney review would be prudent. Especially in the case of buying power for entire communities, the stakes are high, contracts are involved and costs of litigation even greater.

“You need a service provider who you can go to and ask questions,” Garofalow adds, “Although [the energy business] isn’t rocket science, it is complex.” Before your board even thinks of making any changes in your utility provider, it makes sense to be sure that the people responsible for the purchase of energy understand the terms, the bills and the contracts.

According to Moran, “Billing can be done in a few different ways. For Basic Generation Services (BGS), all charges can be contained in one utility bill. Third party suppliers have a variety of options that are set forth in their contracts.”

Like a fixed mortgage, a fixed rate is fairly straightforward, and can be budgeted for accordingly. For a variable rate, it helps to know the index to which the rate is tied. According to Weinberger, “Some large customers have been put on hourly pricing versus a fixed rate—the advantage being that you pay for what you really use, with the ability to see where spikes are.”

Eric Hartsfield, a spokesperson for the NJBPU, indicates there are many options. “In the case of a condo, you may have one company providing service for the common/general areas, while another may provide service to the individual unit owners.”

Other Considerations

It also helps to be informed about the latest programs from providers that may benefit your community down the road.

“We recommend that dual-fuel boilers be put in if possible and if it makes economic sense to the customer,” says Garofalow—providing the option of burning natural gas or alternate fuel as the state of the market may dictate. Programs like the New Jersey Clean Energy Program (www.njcleanenergy.com) offer multiple promotions that provide cash incentives for changing systems that are cleaner or more efficient. So, when a community looks at their energy costs, they might consider replacement time for heat pumps, air conditioning systems and boilers in addition to their bills. If timing is right, there could be savings all around.

Information is out there, however, in the form of conferences, customer awareness programs and directly from the BPU (www.bpu.state.nj.us). The more informed the management company, condo or co-op board, the easier it will be to maneuver through this kilowatt maze without it becoming a drain on an association’s time and budget.

To find out more about saving opportunities in the NJ deregulated utility market email george@hbsadvantage.com or call 856-857-1230.

Chrysa Smith is a freelance writer and a frequent contributor to The New Jersey Cooperator.

Deregulation of electricity generation in Pennsylvania was approved in the PA General Assembly in December 1996. The primary impetus for the legislation was to open the electricity industry to competition, thereby enabling Pennsylvania residents, institutions, businesses and industries to buy electricity at lower costs. Originally the deregulation was to be completed statewide by Jan. 1, 2001. There have been numerous delays in this arduous process. Now the anticipated deadline for completion throughout the state is Dec. 31, 2010 for all investor-owned utility companies. The rural electric cooperatives and municipal-operated utility companies are exempted from this legislation.

Electricity rate caps (or price controls) were implemented by the PA Public Utility Commission (PUC) to ensure relative price stabilityduring the potentially tumultuous years leading to the complete deregulation of electricity generation. The price of electricity has remained nearly constant since 1996 with annual increases ranging from 0 to about 5 percent, while the prices of other sources of energy were skyrocketing. During this same period, customers were required to payeach month the tangible and intangible transition fees (also known as stranded investment fees) to compensate the utility companies as they transition to the deregulated environment.

PECO Customers

The balance of this article is geared specifically to those customers served by Philadelphia Electric Company (PECO), which includes all the mushroom farmers in Chester County. The information pertinent to PECO customers is similar (but not identical) to the information pertinent to customers of the other investor-owned utility companies throughout the state.

The rate caps for electricity that have kept the electricity prices fairly low expire when the deregulation of electricity is completedat the end of 2010. The customer’s responsibility to pay the transition fees also expires at the same time, thereby completing the deregulation of electricity generation. Then what?.

Each customer will have the opportunity to shop for a supplier of generated electricity. Generated electricity will become a commodity that can be purchased from any licensed supplier or broker that you choose. Whenever considering generated electricity, we need to think in terms of both energy (kWh) and capacity (kW). If a customer opts not to shop for an electricity supplier, then PECO will serve as the “default service supplier” or the “provider of last resort.” If your selected electricity generation supplier is ever unable to provide the electricity you need, PECO will supply you with electricity at the prevailing price.

The transmission and distribution of the electricity as well as local service will continue to be provided by PECO. It doesn’t matter which company you select as your electricity generation supplier; you will remain a customer of PECO for distribution and local services. PECO will be responsible for providing line maintenance, restoring service after storms and accidents and providing on-going customer services including billing. These functions will remain regulated by the PUC for the foreseeable future.

Rate Design Changes

There will be numerous changes in the PECO rate designs. The familiar rate features listed below will be eliminated for generated electricity (energy and capacity) for all commercial and industrial customers starting the first of the year 2011. However, the rate features listed below will be retained for transmission and distribution.

* Demand ratchet * Winter heating rate

* Night service rider * Construction rider

* Interruptible rates * Curtailment rider

* Economic incentive & competitive alternative riders * Several other less-used features

The rate features of declining block rate structures and demand charges will be phase]d out over the three-year period 2011-2013 for generated electricity but will be retained for transmission and distribution.

What are your options for buying generated electricity? For the medium-sized customer (with kW demand greater than 100 kW but less than500 kW), the options are:

* Contract with a licensed retail supplier * Obtain default services from PECO at a flat, fixed rate of x cents per kWh.

For the large customer (demand greater than 500 kW), the options are:

* Contract with a licensed retail supplier * Obtain default services from PECO at day-ahead hourly prices

* Obtain default services from PECO at a flat, fixed rate of x cents per kWh. (this option available just for 2011.)

It does not matter what size customer you are, your most importantactivity to get lower prices for electricity is to manage your peak demand. An indicator of how well you are managing peak demand is the load factor. Next month’s article will focus specifically on load factor and how you can manage it to get electricity at lower prices.

You have 6 months to prepare for the deregulation of electricity. Take advantage of this lead-time. Start your homework now!

Brief Definitions

Demand: Unit of electrical power, expressed in kilowatts (kW).

Distribution: Delivery of electricity from the substation to the retail customers.

Generation: Production of electricity at a power plant or on-site facility.

Investor-Owned Utility: A utility company owned and operated by private investors.

Load Factor: Relationship of peak demand (kW) to electricity usage(kWh).

Peak Demand: Maximum amount of electrical power (kW) used over a 30-minute interval in the billing period.

Public Utility Commission (PUC): Pennsylvania regulatory agency that provides oversight, policy guidance, and direction to electric public utilities as well as other public utilities.

Transmission: Transport of high voltage electricity from the generation plant to substations.

Dennis E. Buffington Professor

Dept. of Agricultural & Biological Engineering Penn State University

Our Perspective:

Hutchinson Business Solutions is an independent energy management consultant. We have been providing deregulated energy saving solutions to our clients for over 10 years. To learn more about the the deregulated savings opportunities for your business email george@hbsadvantage.com or call 856-857-1230.

June 3, 2010    as reported by electricitywatch.com

On June 1, new summer default rates went into effect for all New Jersey customer s being serviced by JCPL (Jersey Central Power & Light) who are still on the utility’s price to compare default rate.

While residential competitive electric providers remain limited in the state, there are roughly two dozen competitive electric suppliers offering lower rates for commercial and industrial customers compared to the JCP&L default price to compare rate.  Business customers in the GS rate class will pay a rate of $0.115462 from June through September of 2010, and then pay $0.110205 from October 2010 through May 2011.  Current fixed competitive electric rates in the area are in the low $0.10s per KWh resulting in savings for most businesses between 8-14%.

Default rates in JCPL are derived from auctions the utility performs in previous years for the current year.  Due to lower natural gas prices, current market rates for electricity are lower than the current default rates resulting in saving opportunities for businesses.

For more inf0rmation on Jersey Central Power and Light competitive rates, send an email to george@hbsadvantage.com .

as reported in flettexchange

Electricity rates in Pennsylvania could soon be on the rise. Businesses, federal agencies, non-profit organizations, and residents could soon experience an increase in their electric bills. The increase in price stems from the deregulation of the Pennsylvania electricity markets.

In the 1990s Pennsylvania lawmakers moved from a regionally monopolized electricity market to a competitive electricity market. Pennsylvania consumers were paying about 15% more for electricity than the national average, so the decision to embrace a competitive electricity market was easy to make. Legislators restructured electricity generation to promote more competition. However to achieve the transition from a regional electricity market to competitive electricity market, legislators had to institute rate caps to protect from unpredictable price fluctuations and implement a “stranded costs” provision for electricity providers to pay for former infrastructure investments. “In return for the loss of their monopoly status, utilities were allowed to collect a surcharge above the price of electricity, otherwise known as stranded costs. Rate caps already have expired for six utilities statewide, and the transition period will end for all state utilities in 2011—ending the rate caps and the collection of stranded costs.” 4/9/2009, Pennlive.com, “Electricity Deregulation is a Win for Pennsylvania” –Elizabeth Bryan. As rate caps and the collection of stranded costs expire the Pennsylvania electricity market could experience unwanted changes during difficult economic times.

Electricity deregulation was established to promote competition and market efficiency. Unfortunately this is not always been the case. In 2001, California experienced the negative repercussions of a deregulated electricity market. California residents were forced to endure volatile electricity prices, while rolling blackouts plagued the state, and electricity could not be supplied during peak hours. For Californians, electricity deregulation equaled disaster.

The expiration of electricity rate caps could bring unwanted price increases to Pennsylvania. Consumers could experience percentage increases in their electric bills as regional rate caps expire. The following map exhibits regional Pennsylvania electricity territories and the electric providers that serve those areas. So far the consequences have been minor with rate cap expirations only affecting 14.1% of the Commonwealth. However from January 2010 – January 2011, rate caps for five major electricity service territories expire and the Pennsylvania electricity market will be completely deregulated.


Image Source: Pennsylvania Utility Choice (www.puc.state.ps.us)

Electricity rate caps for the Duquesne Light Company, PPL Electric Utilities, Inc., West Penn Power Company, Pennsylvania Electric Company, Metropolitan Edison Company, and PECO Energy Company expire between January 2010 – January 2011. This comprises 85.9% of Pennsylvania’s electricity market and could have an impact on electricity prices going forward. Fortunately Pennsylvania has learned from California’s missteps. Lawmakers are forcing utilities to diversify their electricity risk by securing both short- term and long-term contracts. This mixture of contracts could be helpful in mitigating risk, unlike California whose focus was concentrated on short-term contracts only. Regardless of the outcome, the Pennsylvania electricity market is one to monitor in the months and years to come.

Is there a way for Pennsylvanians to protect themselves from the upcoming deregulated electricity markets and future price uncertainty? The answer is yes. Pennsylvanians’ best solution is to embrace renewable energy. Solar energy can solve Pennsylvania’s electricity deregulation issue and act as hedges to potential higher electricity prices. Solar facilities level the playing field and allow businesses, federal agencies, non-profit organizations, and residents to participate in renewable energy, become less dependent on electric companies, and produce electricity during peak demand times. Parties that install solar facilities have the ability to achieve a fixed or reduced cost of electricity for an extended period of time, generate Alternative Energy Credits (AECs) (which are actively traded on Flett Exchange), and embrace clean energy that is absolutely vital to our environment. Pennsylvania also offers state incentives for affordable green energy. If you are a resident interested in solar click on, Pennsylvania Sunshine Program and for businesses interested in solar, click Pennsylvania Solar Energy Program to learn how to achieve clean energy.

Our perspective:

Hutchinson Business Solutions is an independent energy management consultant. We have be providing deregulated energy solutions to our clients for over 10 years. We represent all the major providers selling natural gas and electricity in both NJ and Pa.

The local providers buy energy on the open market wholesale and then bill their customers at retail prices. We place our clients in a wholesale position.

To learn more about saving opportunites in the dergulated utility market email george@hbsadvantage.com or call  856-856-1230.

Subscribe to Flett Exchange Market Commentary by e-Mail Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

March 25, 2010  as reported by electricitywatch.org

On January 1, 2011 PECO electric customers will come off of decade long price caps and be subject to more recent market rates.  When this happens, customers will have the option to shop the competitive electric market for lower prices and multiple product options from 10-20 electric providers that are expected to be active as the calendar turns to 2011.

PECO will offer “Price to Compare” rates, or default rates, for those customers who are slow to shop the market.   These default rates will be determined by a series of auctions that will allow PECO to buy portions of the generation load that they will need to serve their customers at different times so that they are not subject to the electricity wholesale prices at any given time.  PECO is buying energy for their residential customers at four separate times.  Two of those auctions have already taken place with the final two set to occur in June and September of 2010.  After the first two auctions, the combined retail price secured is 9.41 cents per KWh.  PECO customers won’t know their exact price to compare, and how much those rates will be higher than what they are currently paying, until all four auctions have been completed.  At that point PECO residential customers can expect to see competitive electric providers market for their business.

To learn more about saving money in the deregulated energy market in the Peco market email george@hbsadvantage.com