by Lou Mancinelli
At the close of 2010, for the first time in almost 15 years, caps on electricity rates expired in Pennsylvania.
Because the market price of electricity has risen since rates were capped and is subject to fluctuations in economic markets, the Pennsylvania Public Utility Commission (PUC) expects that customers may see an increase in the amount of their monthly electric bills.
While prices may rise, consumers in Pennsylvania can exercise their right to choose an electric supplier (and perhaps save money) – a right guaranteed by the 1997 Pennsylvania Electric Generation Customer Choice and Competition Act.
Chestnut Hill residents can choose from 17 different competing suppliers (there are 35 commercial suppliers) licensed by and under the jurisdiction of the PUC. A number of assistance and budget billing programs already operating will continue. Power cancellation rules remain unchanged.
It seems that all consumers – residential and commercial – have to do to exercise their right to choose is to use the Internet for research and visit PAPowerSwitch.com. There, consumers can read pertinent information, access a Shop For Electricity page that lists the electric suppliers in the area and compare the price per kilowatt hour (kWh) offered by each company.
They can also compare a predicted cost based on total kWh of the monthly generation and transmission portion of the electric bill. In addition, some suppliers offer renewable energy sources.
“It’s really more of a change in a financial transaction than a physical transaction,” said John Kaufman, a founding principal at Energy Purchasing Experts (EPEX). “Pennsylvania is in a great position because caps came off when energy prices are around a seven year low,” he said.
But that is not to suggest that the price of electricity will not rise, Kaufman said, noting that it is susceptible to factors like the weather and the price of natural gas. When the price of natural gas rises, so does electricity.
While PECO will continue to transmit energy from its local distribution systems and relay it to households, residents can select the supplier that produces their energy. In most cases, residents who choose a new supplier will receive one bill for generation, transmission and distribution.
It will be the same as the old one, and still from PECO, but the new supplier will be listed at the generator. In theory, the biggest change for those who veer away from PECO should be in price.
The lowest rate for electricity individual residents can purchase in the 19118 zip code is generated by Stream Energy, a supplier in Texas, Georgia and Pennsylvania. At $0.0743 per kWh, an estimate for a monthly generation portion of the bill for 700 kWh is $52.01. That rate is based on a month-to-month contract, and is variable. The price is linked to the commodities market price of electricity, according to a spokesperson at Stream.
At $0.1105 per kWh, Commerce Energy, Inc. provides the most expensive energy, a monthly estimate of $77.35 for 700 kWh. That rate is also variable.
PECO, the default supplier offers electricity at $0.0994 per kWH, a monthly estimate of $69.58 for 700 kWh.
Other suppliers, like Gateway Energy Services Corp. offer fixed rates. One can lock in a six-month rate of $.089 per kWh, or $0.097 for one year. There is, however, a $12.50 cancellation fee for each month (or partial month) if the customer decides to end the contract. In addition, it offers a discount for purchasing its service. A longer fixed rate might appeal to the individual wary of rising rates in the summer.
The final bill in all of these examples will also include a distribution charge. And PECO remains the utility provider. If there is a power-outage or problem, PECO provides service.
One way to save money, or negotiate rates, is to deal with a supplier as a group, something members of the Chestnut Hill Business Association (CHBA) have done. Chestnut Hill businesses that sign up with Glacial Energy will enjoy a lower rate and, based on the aggregate number of kWh used by all participating businesses, Glacial will provide a rebate to the CHBA, said CHBA president Greg Welsh.
A similar agreement is in the process of being finalized by members of the Chestnut Hill Community Association, Welsh said. Any resident of the city or suburbs who signs up with the supplier the CHCA chooses, will experience a 5 to 7 percent lower rate, and the CHCA will receive a rebate to use to defray its costs. Once the agreement has been completed, which could happen this month, all a resident has to do to participate is call the appropriate supplier and sign up through the CHCA.
“It’s a win-win situation,” Welsh said. “You get a lower rate plus every month money goes to the CHCA.”
For more information visit PAPowerSwitch.com. If you do not have Internet access, customer service personnel can mail/fax you information. Call 1-800-692-7380 or write the Pennsylvania Public Utility Commission, P.O. Box 3265, Harrisburg, PA 17105-3265.