Posted on Tue, Oct. 11, 2011

By Andrew Maykuth

Inquirer Staff Writer

Peco Energy Co. electric customers may be feeling a little deregulatory
whiplash.

Since market rates went into effect this year for the Philadelphia utility’s
1.6 million customers, the price for residential electric power has gone up 12
percent. The biggest quarterly increase took effect Oct. 1 and will be reflected
in bills that go out later this month.

But take heart, customers. Without fanfare, Peco last week posted its
projected prices for Jan. 1, 2012, and it estimates residential rates will fall
dramatically, back to the point where they started in 2011.

“This is good news,” said Catherine Engel Menendez, Peco’s spokeswoman.

The quarterly adjustments are a feature of electric deregulation that went
into effect this year for Peco customers.

The major factors behind the rise and fall of rates are seasonal fluctuations
in wholesale power prices that were invisible to customers under the old
fixed-rate system. The variations became noticeable after rate caps came off and
Peco’s rates were adjusted every three months.

The price fluctuations are exaggerated in the current quarter – up 7 percent
– because Peco is allowed to recover money it did not collect earlier this year
when wholesale prices were higher than expected. The state requires utilities to
reconcile under- or over-collections in the next quarter.

Peco’s quarterly price swings add a wrinkle to the process of shopping for an
alternative electric supplier.

Under Pennsylvania’s Electric Choice Act, customers are free to shop for
power suppliers, whose charges make up about two-thirds of the monthly bill.
(Peco still collects a distribution fee from all customers for using its wires,
regardless of who generates the electricity.)

Since rate caps were lifted, about 370,000 Peco customers have switched to
alternative suppliers. Some suppliers are currently ramping up marketing
campaigns to capture Peco customers, pointing out that their rates are
substantially less than Peco’s Oct. 1 rate of 11.14 cents per kilowatt-hour.

For instance, Constellation Energy Group Inc., a Maryland supplier, is
currently offering a 12-month fixed price of 9.98 cents per kilowatt-hour, which
it advertises is about 10 percent less than Peco’s price.

But customers who opt for Constellation’s fixed-rate contract could find they
will be paying slightly more than Peco customers after Jan. 1, when
Peco’s rate is projected to drop to 9.91 cents per kilowatt-hour.

Peco’s impending price decrease will create new challenges for suppliers as
they set their prices for next year, said Jossi Fritz-Mauer, codirector of the
Energy Cooperative of Pennsylvania, whose current rate is greater than Peco’s
projected price in January.

“The Energy Cooperative is still in the process of finalizing our prices for
2012, but this certainly presents a new dynamic for Peco customers looking to
shop,” said Fritz-Mauer.

Jennifer Kocher, the spokeswoman for the Pennsylvania Public Utility
Commission, said that customers were becoming increasingly sophisticated as the
markets mature and that more were switching in response to price changes.

She said the PUC advises customers contemplating a switch to compare prices
at the commission’s website.

“We would hope that anybody who is shopping would do their due diligence,”
she said.

Irwin “Sonny” Popowsky, Pennsylvania’s consumer advocate, said the price
fluctuations underscored the risks and rewards of locking into fixed-rate
contracts when market rates are high or low.

“Some suppliers are able to beat Peco’s rate, but perhaps not as much as they
did a year ago,” he said.

Indeed, Peco customers who locked in last December with suppliers offering
12-month fixed-rate deals of 8.89 cents per kilowatt-hour are currently paying
20 percent less than customers who stayed with the utility. For a customer using
500 kilowatt-hours a month, the monthly savings amount to about $11.20.

Not every Peco customer benefits by switching to an alternative supplier.

Alternative suppliers are still unable to beat the utility’s discounted rates
for about 160,000 residential heating customers and 80,000 customers with
electric water heaters, said Engel Menendez.

But those below-market rates are scheduled to be eliminated at the end of
2012, and the utility expects suppliers to begin courting those customers at the
end of next year.

Read more: http://www.philly.com/philly/business/20111011_Peco_predicts_a_drop_in_electric-power_price.html#ixzz1aUmhf6Ky

Watch
sports videos you won’t find anywhere else

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.

Finally

November 23, 2010

It’s been a long wait.

It has been well publicized, that in January 2011, PECO will lift the rate caps on electric prices and will be entering the deregulated market.

Just what does this mean for PECO customers?

As part of deregulation, local providers will no longer own their own power plants to generate electric. Their job is to deliver electricity to the end user, the client.

They are able to sell the supply, which they buy through an auction process, to anyone who chooses to stay with the local provider at a default price, which could be higher.

PECO is actually encouraging larger users to shop their rates with 3rd party providers. 

If your business is currently spending a minimum of $5000 a month on electricity, Hutchinson Business Solutions will now be able to help you buy your electric supply from a 3rd party supplier.

The new rates PECO will be proposing as of Jan 2011 will be tiered for certain rate classes. For certain customers the first tier is for the first 80 hours of usage per month, and is the highest rate. This can range from $0.16 cent per kwh to $0.17 cents per kwh.

The prices will be scaled down as your usages progress. The more electric you use, the more the price goes down.

PECO is only publishing these rates for 90 days. That means that as of April 1st, new prices will appear based on such potential factors as:

                                                  – How PECO needs to true-up their costs

                                                  – Current market values at that time.

 Another factor being added into the PECO price to compare is RMR (Reliability Must Run). This is a pass thru cost from the local provider for system reliability.

This means having the ability to generate electric when it is needed. Although this cost has not been defined, it could be in the $0.001 mil to $0.003 mil ranges (3 mil ie:3 tenths of a penny).

The bottom line, should you choose to stay with PECO, you could be paying higher default rates as of Jan 2011.

Each account is unique, based on their demand and usage patterns. For smaller to midsize accounts; we could see electric supply prices in the $.010 cents per kwh to $.13 cent range as a default price from PECO.

We have been working with clients in the PECO territory this year and have found significant opportunities in the deregulated electric market.

HBS clients are finding savings ranging from 10% to 20% by purchasing electric thru deregulated 3rd party providers.

Hutchinson Business Solutions (HBS) has been providing independent, deregulated energy solutions for over 10 years.

There is no upfront fee.

Our strategic partnerships allow us to represent all the major providers currently selling energy in deregulated states.

Should you like to know more about this topic, email george@hbsadvantage.com

or call 856-857-1230 

Visit s on the web www.hutchinsonbusinesssolutions.com

By Andrew Maykuth The Philadelphia Inquirer

Oct. 15– Peco Energy Co. said Thursday that its overall residential electric rate would increase only about 5 percent Jan. 1, putting to rest fears that deregulation would lead to a gigantic boost in the cost of power.

And for customers willing to shop around in a rapidly emerging competitive market, their bills may actually go down on New Year’s Day.

In a filing Thursday with the Pennsylvania Public Utility Commission, Peco unveiled its long-awaited default rate for residential generation service, the “price to compare” to alternative energy suppliers.

For residential customers, that price will be 9.92 cents per kilowatt-hour — a number power discounters should be able to beat.

The announcement is likely to trigger a lively fight among alternative suppliers to sign up households, which make up most of Peco’s 1.6 million customers. A residential customer typically consumes about 700 kilowatt-hours a month.

The competition for large commercial and industrial customers is already fierce.

Several suppliers, large and small, said they were planning to offer discounts but were awaiting the company’s announcement to set up their own offers. Other “green” marketers are also likely to jump into the fray, offering renewable-energy deals.

Judging from the experience of neighboring utilities that have already deregulated, consumers should expect a marketing blitz (direct mail, telemarketing, door-to-door salespeople) to crank up in the coming months.

Consumer advocates caution Peco customers to pay close attention to the offers — whether the rates are fixed or variable, and if they contain cancellation fees.

Customers are under no obligation to switch suppliers. The PUC requires Peco to supply power at the default rate to customers who stay with the utility.

Indeed, in areas of Pennsylvania where markets have already opened up, a majority of customers stayed with the traditional utility because the potential savings — perhaps only $10 a month — were not enough motive to switch.

No matter which company sells the electricity, Peco still will serve every customer because it owns the power-distribution system. Peco makes money from a regulated distribution fee, not from generating the power itself.

The restructuring is the result of Pennsylvania’s Electric Choice Act of 1996, which forced traditional utilities to divest their power plants and become merely regulated distributors of electricity over their wires. The law’s aim was to stimulate competition and suppress prices.

The law allowed Peco’s rates to remain capped through 2010 to allow the utility to recover its investments in power plants through a “transition charge.” For most of those years, the capped rates were so low alternative suppliers could not compete.

But with the caps off at the end of this year, the transition charge disappears and third-party suppliers are in a stronger position to compete.

Peco set its default generation rate after signing contracts with power generators that competed in a series of auctions over the last year.

On Thursday, Peco announced the prices to compare for a range of customer classes.

Residential customers who heat with electricity will pay 9.74 cents for the first 600 kilowatt-hours each month, then the price drops to 5.35 cents.

For small commercial customers, the price to compare is 9.47 cents per kilowatt-hour. For medium-size commercial customers, it is 9.37 cents and 9.59 cents for large customers.

All the prices to compare include only charges for generation, long-distance transmission, and the Alternative Energy Portfolio Standard, a fee that reflects the cost for the renewable power the state requires utilities to buy.

Peco’s distribution charge — which covers the cost to maintain wires and transformers, customer service, and Peco’s profit — varies among customer classes.

Cathy Engel, a spokeswoman for the utility, said prices for some customers would actually go down in January, even if they did not switch. Small commercial customers will see a 5 percent decrease.

But large customers would pay 7 percent more if they stayed with Peco’s default rate. Many have already signed up with alternative suppliers.

One new wrinkle: Electric rates now will adjust slightly each quarter to reflect changes in the wholesale market, much as rates for natural gas change seasonally.

Alternative suppliers are likely to offer fixed-rate plans to appeal to customers who want price stability. Those plans guarantee no price increases over the term of the contract.

Even though alternative suppliers may offer attractive discounts, experts say that residential customers tend to resist change.

For example, PPL Electric Utilities Corp., the Allentown company that serves much of eastern Pennsylvania, says that even though alternative suppliers offered discounts up to 15 percent, two-thirds of its residential customers stayed with PPL after rate caps were lifted in January.

PPL’s price-to-compare this year was 10.4 cents. Its price for next year is expected to fall to about 9.4 cents.

But even in that market, alternative suppliers are still offering rates below 9 cents a kilowatt-hour. That suggests the marketers in Peco’s territory are likely to undercut its 9.92-cent rate.

“Even if it’s a half-cent savings, that’s still $50 to $60 a year in savings,” said Jennifer Kocher, a PUC spokeswoman.

Power Shopping

Peco responds to customer questions at http://www.pecoanswers.com

Pa.’s PUC offers a primer for understanding your Peco bill at http://go.philly.com/pecobill

Pa.’s PUC explains electrical choice, lists alternative suppliers at http://www.papowerswitch.com

Helping PECO customers manage

September 16, 2010

From Peco website

Beginning January 1, 2011, the prices PECO and our customers pay for electricity will be based on electric market pricing. Gas and electricity will cost customers more. At the same time, PECO’s operational costs have increased.

We want to help you manage these changes. This Web site will help keep you informed, answer questions and offer strategies to help save or offset much of the increase. Please look around. If you can’t find the answer here, let us know and we promise to find it for you.

For more information, visit: www.pecoanswers.com

PECO Reaches Gas and Electric Delivery Rate Case Settlements
Settlements provide necessary funds for reliable electric & natural gas service, customer support and low-income assistance

PECO today filed joint settlement petitions for consideration by the Pennsylvania Public Utility Commission (PAPUC) that reflect agreements reached with all interested groups on the increases in natural gas and electric delivery charges beginning Jan. 1, 2011.

“We are pleased to have worked cooperatively with all involved to reach these agreements,” said Denis O’Brien, PECO president and CEO.  “These settlements will help us continue to provide reliable gas and electric service and quality customer care while also managing the impact of these changes to our customers.”

The settlement reflects a $20 million overall increase in natural gas delivery rates and a $225 million increase in electric delivery rates.  Specifically, with these increases PECO will:

  • Continue to invest in our electric and natural gas delivery systems – replacing equipment, upgrading infrastructure and investing in new technology.  We plan to invest about $1.7 billion in our electric delivery system and $380 million in our natural gas delivery system during the next 5 years – ensuring reliable service to customers and employing thousands of people in our regional workforce.
  • Continue to improve customer service, and expand our natural gas energy efficiency programs.
  • Increase assistance to low-income customers by providing more tailored assistance programs and limiting total program costs.

Click here to view the press release

 

Because energy prices have gone up during the more than 10 years electricity prices have been capped in Pennsylvania, PECO’s rates, beginning in January 2011, will reflect those rising prices. We want to help you manage these rising costs.

We know change can be difficult, but to help ease the transition, we have created this Web site to provide tools and tips to help you use energy more efficiently and better manage your electric costs. Conservation is key.  And this site contains great information to help you conserve.

Our goal is to keep you in the know, so please explore this site and check back for exciting new ideas, programs and services as we near the final transition to market-based rates on Jan. 1, 2011.

Denis P. O’Brien
PECO President and CEO

As part of our ongoing commitment to keep customers informed, I would like to welcome you to www.peco.com/know, a site dedicated to keeping you “in the know” about the transition from capped electric rates to electric rates based on market prices.  

Beginning January 1, 2011, the prices PECO and our customers pay for electricity will be based on electric market pricing. Gas and electricity will cost customers more. At the same time, PECO’s operational costs have increased.

We want to help you manage these changes. This Web site will help keep you informed, answer questions and offer strategies to help save or offset much of the increase. Please look around. If you can’t find the answer here, let us know and we promise to find it for you.

For more information, visit: www.pecoanswers.com

 PECO Reaches Gas and Electric Delivery Rate Case Settlements
Settlements provide necessary funds for reliable electric & natural gas service, customer support and low-income assistance

PECO today filed joint settlement petitions for consideration by the Pennsylvania Public Utility Commission (PAPUC) that reflect agreements reached with all interested groups on the increases in natural gas and electric delivery charges beginning Jan. 1, 2011.

“We are pleased to have worked cooperatively with all involved to reach these agreements,” said Denis O’Brien, PECO president and CEO.  “These settlements will help us continue to provide reliable gas and electric service and quality customer care while also managing the impact of these changes to our customers.”

The settlement reflects a $20 million overall increase in natural gas delivery rates and a $225 million increase in electric delivery rates.  Specifically, with these increases PECO will:

  • Continue to invest in our electric and natural gas delivery systems – replacing equipment, upgrading infrastructure and investing in new technology.  We plan to invest about $1.7 billion in our electric delivery system and $380 million in our natural gas delivery system during the next 5 years – ensuring reliable service to customers and employing thousands of people in our regional workforce.
  • Continue to improve customer service, and expand our natural gas energy efficiency programs.
  • Increase assistance to low-income customers by providing more tailored assistance programs and limiting total program costs.

Click here to view the press release

 

As part of our ongoing commitment to keep customers informed, I would like to welcome you to www.peco.com/know, a site dedicated to keeping you “in the know” about the transition from capped electric rates to electric rates based on market prices. 

Because energy prices have gone up during the more than 10 years electricity prices have been capped in Pennsylvania, PECO’s rates, beginning in January 2011, will reflect those rising prices. We want to help you manage these rising costs.

We know change can be difficult, but to help ease the transition, we have created this Web site to provide tools and tips to help you use energy more efficiently and better manage your electric costs. Conservation is key.  And this site contains great information to help you conserve.

Our goal is to keep you in the know, so please explore this site and check back for exciting new ideas, programs and services as we near the final transition to market-based rates on Jan. 1, 2011.

Denis P. O’Brien
PECO President and CEO