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Pa. electric choice market grows

By: Robert F. Powelson |

In early February, Pennsylvania surpassed two million homeowners and employers using a competitive supplier for their electric service. Just three years ago, as the last of the long-term rate caps on electricity supply expired, only about 337,600 customers were using a competitive supplier.

Through consumer education efforts, including www.PAPowerSwitch.com, 34 percent of Pennsylvania electric consumers are using a competitive supplier, and customers have become more comfortable with their ability to shop, save money, and take advantage of incentives. Local residential customers can save as much as $20 a month. Choosing a competitive supplier also can provide consumers with a reliable electric price, as opposed to the volatility that can come with choosing the utility rate that changes quarterly.

For employers, the savings can range from thousands to millions of dollars annually. For example, in central Pennsylvania, Wolf Furniture has saved hundreds of thousands of dollars by combining shopping for electricity with energy-efficient programs. Savings for energy costs alone for stores in PPL territory was $84,000 in 2010.

Prices are only one indicator of the health of a competitive market. The number of options available to consumers – including low-income people participating in customer-assistance programs – is equally important. Competitive electric generation suppliers are bringing a variety of products and services to customers, and they also have “choice” when it comes to picking green products like wind and solar.

While we are proud of the market that has developed, the Public Utility Commission is committed to providing a framework that will allow continued growth. Almost six years ago, the commission began focusing on the hurdles that consumers would face with the end of long-term rate caps. As a result of the commission’s proactive measures, much of the rate shock that electric customers in other states suffered was avoided.

Today, the PUC is taking action to ensure the retail electric market’s long-term viability. On Feb. 14, we unanimously made changes to help consumers better reap the benefits of a competitive electric retail market. However, in finalizing our two-year retail markets investigation, we recognize that more work needs to be done.

Among the issues already addressed are the security of customer information; reporting requirements for quality-of-service benchmarks and standards, as well as universal service and energy conservation; standards for changing a customer’s electricity generation supplier; marketing and sales practices for the retail residential energy market; and standards and billing practices for residential utility service.

In addition, to ensure the market’s long-term viability for the benefit of consumers, we are proposing to restructure the way the utilities buy power so it more accurately reflects current market prices.

It is the commission’s responsibility to ensure that consumers enjoy competitive prices and a wide variety of innovative product offerings, and that competitive electric suppliers invest in Pennsylvania. The PUC will remain diligent and proactive in those tasks.