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Harrisburg: In the December 24 edition of Power Politics, the official blog of the Energy Resources Group, there was a very good summary of Rate Caps and Consumer Choice. We reprint that section of the newsletter below.
"The end of 2009 also marks the end of rate caps in the PPL Electric Utilities (PPL) territory. The state legislature tried to bring about legislation to stall the expiration of rate caps, but since that was not completed prior to the end of this year’s session, many customers are left wondering about now only what rate caps are, but how much their bills will increase, and what they can do to “shop” for better prices.As part of the restructured electricity market created by the Act, customers have the right to choose who supplies the generation portion of their bill. Under the law, your current electric company is required to maintain the transmission and distribution (or the wires) part of your electric service, even if you choose a different supplier for your generation. Once rate caps expire, customers can shop around for a better deal.
Rate caps and your electric bill
In 1996, Pennsylvania's electric rates were 15 percent higher than the national average. To help address the high cost of electricity, Pennsylvania's "Electricity Generation Customer Choice and Competition Act" (Competition Act) was signed into law on December 3, 1996. The Competition Act ended electric utility monopolies and capped generation rates at 1996 levels. While certain increases were allowed, generation rates generally have remained stable for more than 10 years. Today, Pennsylvania electric customers are paying 5 percent below the national average. When your rate caps expire, it is only this generation portion of your bill that will increase to reflect the current wholesale market price of power.
How to Shop for Better Rates
Once rate caps expire in your service territory, rates will reflect the current wholesale cost of supplying generation, which allows other suppliers to enter the market and offer competitive pricing. If your rate caps have expired and you are interested in switching to a competitive supplier, the first step is to compare pricing. To aid customers in shopping for the best deal, the industry has created a standard "Price to Compare." If a competitive supplier's price is lower than the one offered by your utility, you can save money by switching to that supplier. It really is as simple as picking up the phone and asking to make the switch. The competitive supplier will even contact the utility for you and take care of the switch. Your current utility will continue to provide the transmission and distribution portion of your electric service and those rates will still be regulated by the Public Utility Commission (PUC).
Prices can be compared at the Pennsylvania Office of Consumer Advocate's (OCA) Web site. The OCA frequently updates its Residential Electric Shopping Guide, which shows the "Price to Compare" for utilities and for competitive suppliers. The guide also provides sample pricing and phone numbers to make the switch as easy as possible. The OCA can also be reached by calling 800-684-6560. You can also obtain your "Price to Compare" from your current utility. The PUC maintains a list of licensed competitive generation suppliers in Pennsylvania. To date, there are 64 companies approved to offer generation supply in the state. Further information on competitive suppliers broken down by utility service territory and customer rate class can be found on Pennsylvania Utility Choice Program's Web site or by calling 888-PUC-FACT (888-782-3228). |
