What is Electric Choice

August 6, 2010

As reported by Pennsylvania PUC

Q: What exactly am I shopping for?
A: You are shopping for the company that supplies your electric generation. There are three parts to electric service: generation, transmission and distribution. Generation is the production of electricity. Transmission is the movement of that electricity from where it is produced to a local distribution system. Distribution is the delivery of purchased power to the consumer. 
Q: Will I be charged tax on the generation portion of the bill?
A: Yes. Taxes are included in the rate charged by a supplier. Most of the same taxes that the EDC was required to pay will be charged to the supplier. However, they may not be itemized like they were on your bill before you chose a supplier. 
Q: What is an aggregator?
A: A buying group that negotiates lower electricity prices for customers who have authorized them to act on their behalf. 
Q: How do Electric Generation Suppliers (EGSs) set their prices?
A: EGSs consider market conditions, the amount of power customers use, fuel type, terms of their agreement and other services they may provide. These prices are not subject to PUC review. If you sign up, your EGS must notify you before they make any changes to the terms of your contract. 
Q: Will my EDC charge me more for “other services” if I change suppliers?
A: In most cases, your EDC cannot increase any charges based simply on your selection of an alternative supplier. However, if you currently benefit from a special discounted rate (for instance, for having all-electric heat) and you select a new generation supplier, you may lose your discount on other parts of your electric service (including distribution and transmission charges). In this case, shopping for another supplier may end up costing you more money, even if the cost of generation is lower. 
Q: Q & A on Electricity Pricing, Electric Generation Supply, Energy Efficiency & Conservation for the Commission
A: The following questions and answers tell you how you can reduce your electricity use when demand for electricity is the greatest, often during hot summer days. This is important for two reasons. First, cutting back on your electric use will reduce your electric bill. And, second, by controlling your energy use, you can help ensure there is enough electricity for all consumers. Click here.

Energy Conservation and Energy Efficiency Information Sources. 

What You Need to Know Before Shopping for a Supplier
Q: What is the ‘price to compare,’ and where can I find it?
A: This is the price per kilowatt-hour (kWh) a consumer uses to compare prices and potential savings among generation suppliers (also formerly known as the shopping credit). You can find your price to compare on your electric bill. If you have questions, contact your EDC. 
Q: Where can I get information on supplier prices?
A: Each supplier’s price can be different. You can get pricing information by contacting the suppliers serving your area or click here for pricing information resources. 
Q: How will I know that a supplier is reliable?
A: Only electric generation suppliers that are licensed by the Public Utility Commission (PUC) can do business in Pennsylvania. If they are not licensed in Pennsylvania, do not sign up for service from them. 
Q: If I sign up with a new supplier, when will the switch to a new supplier start?
A: It will depend on when you sign up with a new supplier. Generally, it will take about 45 days from the time you notify your new supplier for the actual switch to occur. 
Q: Will I receive two electric bills each month if I choose a new supplier?
A: In most cases, you should be able to receive a single monthly bill from your current electric distribution company. However, some suppliers might want to bill you separately. In this case, you would receive two bills, one from the EDC and one from the supplier. 
Q: Once I select a supplier, what happens next?
A: 1) Your new supplier will notify your EDC of the change.
2) Your EDC will contact you by mail to make sure you selected this company to be your electric generation supplier. 
Q: Are there any penalties for changing suppliers?
A: If you already have an agreement with an electric generation supplier and you want to switch to a different supplier, you should carefully review your agreement with your current supplier to see if there are any penalties for early cancellation. If you are not sure, you should call your current supplier. The new supplier that you choose will not charge a fee to switch to them. If you choose to return to your Electric Distribution Company (EDC), the EDC will not charge you a fee to do so. However, if you switch back to the EDC, you may have to stay with the EDC for at least 12 months. Ask your EDC if they have a 12-month stay rule. 
Figuring Your Savings
Q: How do I figure my savings?
A: To estimate potential monthly savings, subtract the supplier’s price from the price to compare from your EDC. Then, multiply the difference by the average number of kilowatt-hours (kWh) you use in a month. Click here to use the online calculator to determine potential savings.

Additionally, when comparing prices, it’s also important to consider the effect of different electric programs to which you may subscribe. If a supplier offers a discount, find out what part of your bill that discount applies. For example, does it apply to your entire bill or just the generation charge? If you are a low-income customer and want to know whether you qualify for certain low-income assistance programs that help pay part of your electric bill, click here

Electric Choice Program Savings
Q: How much money will I save in the Electric Choice program?
A: Your potential savings will vary. The amount you might save depends on several factors, such as how much you pay now for electric generation; how much electricity you use; and the price offered by an electric generation supplier. 
Q: Who do I contact if I want to discontinue service?
A: If your EDC sends you one bill for all of your charges, you should call them. If you receive a separate bill for generation, you may have to call either or both companies. 
Q: What happens if I move outside my current EDC’s service territory?
A: If you are moving out of your current EDC’s territory, your EGS enrollment does not go with you. You need to contact your new EDC and sign up for EDC service with them. You can ask the EDC for a list of suppliers serving in their territory. Your former supplier may not be providing service in that territory, so you will need to check the list, select a supplier and contact the supplier to enroll. 
Q: Will I have reliable service?
A: Yes. You can depend on the same reliable service from your local electric distribution company whether or not you choose a new supplier. 
Q: If one company generates my electricity and another provides the rest of my electric service, who will I call about outages or repairs?
A: You will still call your local electric distribution company about power outages and repairs. If you have questions about electric generation billing or other issues related to generation, call your new supplier. 
Q: Who do I contact if I have billing questions?
A: If your EDC sends you one bill for all of your charges, you should call them. If you receive a separate bill for generation, you may have to call either or both companies. 
Q: Who do I contact if I want to discontinue service?
A: You should call your EDC. You should also notify your supplier of the fact that you are stopping service. If you are moving within your current EDC’s service territory, you can arrange for new service at the same time and you should be able to keep the same supplier. 
Q: What is slamming and how can I prevent being slammed?
A: Slamming is the unauthorized transfer of utility services without the customer’s permission. To prevent slamming, and regardless of whether you made an agreement with a supplier on the telephone, or over the Internet, your chosen supplier must send you the agreement in writing in an email, U.S. mail or in-person hand-delivery. You have 3 days to accept or decline the agreement upon its receipt. In addition, when your EDC receives notification of a supplier change, it will send you a confirmation letter. You must respond to the EDC within 10 days if the information is incorrect. During that 10-day period if you notify your EDC you did not want the change of supplier, the supplier change will be cancelled and your account will be restored without penalty. 
Q: Can I be in the Electric Choice Program and still benefit from a time of day meter (off-peak meter)?
A: Maybe. You must be sure to compare the rates you are being charged for off-peak service with the rate you will be charged from a competitive supplier. Some suppliers may offer lower or higher prices at different times of the day. For instance, you may be able to receive a discount for using your clothes dryer at night instead of the day, when electric use is higher. Ask the supplier if you need a special meter to take advantage of time-of-day use options. 
Q: Will I need a special meter if I choose a new supplier?
A: Not if you are a residential customer. You might, however, have an opportunity to choose to have an advanced meter. These meters allow you to record your electric use during specific time periods. If a supplier offers this service, advanced metering could allow you to benefit from special time-of-day discounts or other potential ways to save money and reduce energy consumption. You should ask a supplier, however, whether there is a charge for the advanced meter. 
Q: Will my EDC continue to be responsible for reading and maintaining my meter?
A: In most cases, yes. 
Payment Assistance Programs
Q: What energy assistance is available to customers?
A: LIHEAP/CRISIS program payments will cover supplier charges. However, before LIHEAP/CRISIS payments can be made to any qualified service provider, the provider must have an agreement with the PA Department of Welfare (DPW). As of June 11, 1998, no suppliers have agreements with the DPW and as a result they cannot receive program money. If you are part of the Competitive Discount Services Program (CDP), the EDC will apply the LIHEAP grant to your entire bill.

The EDCs have agreements with the DPW, but they are not permitted to provide program money to any suppliers. As a result, you may find that you have a credit with the EDC yet still owe the supplier money. 

Stranded Costs
Q: What are the “competitive transition charges”(also known as stranded costs) charges on my bill?
A: Stranded costs are expenses for utility plants and equipment that were built before deregulation. These costs cannot otherwise be recovered in a competitive electric market. The PUC allows companies to recover some but not all of these costs through a transition charge on electric customers’ bills. These costs are now itemized on your electric bill; however, they are not new charges. Most of these costs were part of your rates under regulation. The CTC will be phased out over time. 
Q: Do we have to pay stranded costs if we are buying generation from a supplier?
A: Yes. Stranded costs have nothing to do with who provides your generation service. All customers who receive electricity over the EDC’s transmission and distribution system pay stranded costs. In some EDC territories, these charges will disappear beginning in 2002. 
Renewable Energy
Q: Which suppliers use renewable energy?
A: Some suppliers use renewable resources to generate electricity by a mix of sources, or only one source, such as wind. Suppliers should be able to tell you the percent of renewable resources that is part of their generation. You may find out more about renewable resources from the Clean Air Council by calling 215-567-4004, ext. 236.

Below are press releases regarding the Pennsylvania Public Utility Commission’s involvement in encouraging renewable energy in Pennsylvania:

PA PUC Chairman Glen Thomas Says PA State Government Leads by Example by Purchasing Green Energy, Shopping for Power

PA PUC Chairman Glen Thomas Dedicates Wind Farms that Secure PA’s Status as East Coast Leader for Wind Energy, National Leader for Electric Choice

PA PUC Commissioner Fitzpatrick Unveils Largest Solar Electric Power Plant in Western PA that Further Secures PA’s Leadership for Green Energy 

Competitive Default Service (CDS) Program
Q: What is the Competitive Default Services Program?
A: A program created from the electric restructuring settlements that require 20% of an EDC’s residential customers – determined by random selection, including low-income and inability-to-pay customers, and regardless of whether such customers are obtaining generation service from an EGS – to be assigned to a default supplier other than the EDC. The supplier is to be selected on the basis of a Commission-approved energy and capacity market price bidding process. Currently, four (4) EDCs have programs, but none have been successfully implemented due to a lack of interest on the part of EGSs. PECO Energy, working with New Power and Green Mountain Energy, has developed a program in southeastern Pennsylvania similar to CDS. It involves non-shoppers being assigned to a new supplier for service. The supplier is not a default supplier – customers can return to PECO’s regulated generation service. In the program, suppliers provide 2% renewable energy to customers in the first year, and .5% thereafter.

See the following Dockets for more information about the CDS programs by the EDCs:

PECO – CDS BID – New Power

Allegheny Power CDS Order

Allegheny Power Amended Petition for CDS Program 2001

GPU CDS Petition – GPUE Request to Withdraw Contested Pleading 

Fuel Source Information and Power Plant Emissions
Q: How can I find out information about air emissions from power plants?
A: E-Grid, a database developed by U.S. Environmental Protection Agency, integrates more than 20 federal databases, provides power plant emissions data for Nitrogen Oxide (NOx – smog contributor and acid rain precursor), Sulfur Dioxide (SO2,- acid rain precursor), Particulate Matter (PM – responsible for respiratory problems, haze issues) Carbon Dioxide (CO2,- global warming gas), and Mercury (Hg- water toxicity). The database can be used for: fuel source information, analysis of changing power markets, development of Renewable Portfolio Standards, utility emission and emissions standards. Download E-GRID at www.epa.gov/airmarkets/egrid

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