Pennsylvania Customers Flocking to Lower-Cost Electric Rates

The good news continues in Pennsylvania as more and more residents experience the benefits of competition. Less than a month after rate caps expired in the PPL Electric Utilities service territory in the northeastern and central part of the state, almost 20 percent of total customers have switched to alternative energy suppliers offering power at up to 10 percent off PPL Electric’s current default rate.

As of this week, 263,000 PPL customers have chosen alternative power suppliers. This number represents 218,000 residential customers and 45,000 commercial and industrial customers, and means 40 percent of the total electric load and 19 percent of the residential load is shopping. Observers expected customers to consider alternatives, but the rate of activity has “been a very dramatic, robust response,” according to Pennsylvania State Consumer Advocate Sonny Popowsky.

Even though so many customers have chosen alternative suppliers, competition still means good news for PPL Electric, and may enable the utility to offer lower default prices for electricity supply in the future. Rates for 2010 are set, based on electricity supply purchased through a competitive bid process in the 2007-2009 period, but wholesale power prices are forecast to remain low and may mean PPL Electric can secure reduced rates for default service next year. When PPL Electric determines its 2011 default rate toward the end of this year, competing power suppliers will have to beat that price to retain their customers.

But cost isn’t the only benefit customers are now finding in the competitive market. Several providers are offering power from renewable energy sources. Customers interested in clean energy can choose power suppliers who offer renewable power as a percentage of their overall portfolio, or can opt for a renewable energy add-on to their bill to help support the development of renewable resources.

These positive developments strongly counter critics who have argued against competition in Pennsylvania, and once again prove that market forces benefit both customers and the environment.

Joel Malina | January 29, 2010