Electric choice could help PECO customers save money in 2011

December 28, 2010

Published: Tuesday, December 14, 2010

By Brian McCullough; Journal Register News Service

The right to choose isn’t much good if it’s not used. That’s the message of Sonny Popowsky, Pennsylvania’s Consumer Advocate, and the state Public Utility Commission, who are urging electric users in the region to make an informed decision on whether they want to continue to receive electricity generated by PECO.

“What I hope is that people decide,” Popowsky said. “My hope is that people across Pennsylvania will know they have a choice and take the time to make it.”

Effective Jan. 1, consumers in southeast Pennsylvania can choose the company that generates their electricity. The choice comes as electric rate caps imposed on PECO are ending.

The caps are coming off four utilities in Pennsylvania, with PECO having the largest number of affected customers. They are the last four electric utilities in the state that had rate caps in effect.

Throughout much of last year, there were dire predictions of electric rates skyrocketing 30, 40 or 50 percent when the rate caps expired.

Now, however, with the recession and an increase in the supply of natural gas used by power generating stations, the increases are much more modest.

PECO is saying its rates for residential customers will increase 5 percent in January while rates for large industrial businesses will go up 7 percent. Small businesses — those that use less than 500 kilowatt hours per month — will actually see a decrease in PECO rates of about 5 percent, spokeswoman Cathy Engel said.

The key number for PECO residential customers to look at when considering a change is 9.92 cents, which is PECO’s price per kilowatt hour heading into the new year.

Residents are urged to visit the website established by the PUC specifically for the switch, www.PaPowerSwitch.com, to see what new suppliers have entered their area. Residents can shop by entering their ZIP codes. Frequently asked questions on picking an electricity supplier/

In the 19067 Yardley-Morrisville ZIP code, for instance, 17 suppliers are registered to sell electricity — all but one of which come in below PECO’s default price.

Generation suppliers registered in the Yardley area, for instance, are: BlueStar Energy, Champion Energy Services, Commerce Energy Inc., Con Ed Solutions, Direct Energy, Dominion Energy Solutions, Energy Cooperative Association of Pennsylvania, Energy Plus Holdings, Gateway Energy Services Corp., North American Power, Palmco Power Pa. LLC, Public Power LLC, Respond Power LLC, Spark Energy LP, Stream Energy Pennsylvania LLC, Verde Energy USA Inc., Viridian Energy and Washington Gas Energy Services.

Three of the providers — Blue Star, Commerce and the Energy Cooperative Association of Pennsylvania — advertise renewable energy.

According to the website, a residential customer using 700 kilowatt hours of electricity a month from PECO pays $69.30 a month. The lowest price listed on the Web site Monday came from Stream Energy, with a variable rate of 7.43 cents per kilowatt hour for a monthly bill of $52.01. The highest came from Commerce Energy, the renewable energy provider, with an average listed monthly bill of $77.35.

No Blacklist

One of the obstacles consumer advocates and regulators face in getting consumers to make the switch is a fear that doing so will mean a drop in service when there are outages or other service issues, said Rob Powelson, the former head of the Chester County Chamber of Business & Industry and now a PUC commissioner.

What consumers are choosing is the company that will generate the electricity. PECO will continue to deliver it and will continue to respond to emergencies with no regard to a customer’s selected generator, he and Engel noted.

PECO also will continue to deliver the bills to all electric customers in the region. The only difference will be on the line that lists the generator.

PECO will be the default provider of electricity to consumers in their region who do not shop.

“PECO does not care where you get your energy generation from,” said Powelson, a Kennett Square-area resident, noting that the Philadelphia-based utility is required to shop on the open market itself for the lowest prices. “PECO will still come out when there’s a storm.

“I hear people say all the time they’re going to be put on a blacklist if they switch,” Powelson said. “I can’t stress this enough: Customers are not going to offend PECO by picking another generation supplier.”

Engel agreed.

“It has no impact on us what supplier they choose,” the spokeswoman said. “We are an energy delivery company.”

She does urge consumers to keep in mind a few things as they shop, however, such as whether the prices being quoted are fixed or variable, and whether there are cancellation fees.

The Numbers

According to the PaPowerSwitch.com Web site, 659,187 electric customers across Pennsylvania have switched generation suppliers in recent years.

Since the rate caps expired in the PPL territory in central Pennsylvania a year ago, 400,000 of the 1.8 million PPL customers have switched, said PUC spokeswoman Denise McCracken. At that time, consumers were looking at rate increases of 30 percent, giving them more motivation to shop, she noted.

The changeover has been much slower in PECO’s territory to date, with a little more than 2,000 residential customers, or 0.2 percent, changing providers. That figure is probably attributable to the smaller increase in prices electric customers face this year, she said.

Overall, 20,860 PECO customers, or 1.3 percent of its total base, have switched, the bulk of which are businesses that use more electricity and are more affected by higher rates.

Powelson believes the pace of switching will pick up in the first quarter of next year, when the PUC “is optimistic” that 20 percent to 25 percent of PECO customers will choose to switch.

“I’d love to see 50 percent to 100 percent,” Powelson said. “Every year you choose your health care plan, you choose your cell phone provider, you choose your cable provider.

“Now, this is another choice you have.”

Whatever provider people choose, Powelson hopes they take advantage of PECO’s Smart Ideas program, which offers incentives to consumers to make their homes more energy efficient. Powelson said he has used it himself to reduce his energy bill.

“Customers now have options to save money on energy usage,” he said.

One Response to “Electric choice could help PECO customers save money in 2011”

  1. Electric choice could help PECO customers save money in 2011 ……

    Here at World Spinner we are debating the same thing……

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