Pennsylvania Environmental Group: Competition’s Benefits “Cannot Be Disputed”

A major Pennsylvania environmental group has endorsed competition’s benefits, just as rate caps expired across the state and millions of consumers gained the ability to shop for their electricity on January 1. PennFuture’s report, “Consumers Win: A Decade of Electricity Competition,” touts the success of competition, saying “the benefits to Pennsylvania ratepayers cannot be disputed.”
 
The report highlights how competition has reduced rates across the Keystone State. “In 1996, Pennsylvania’s electric rates were 15% higher than the national average.” But in 2010, “thanks to innovative policies…electricity rates, allowing for inflation, are 5% lower than the national average.”
 
These claims are backed by data from the state Public Utility Commission (PUC), which found lower average monthly residential electric bills in nearly every utility service territory from 1996 to 2010. Reductions are most notably seen in the PECO, Duquesne and Penn Power territories where bills fell 21, 20, and 18 percent respectively. Even in PPL, the one territory where average bills rose over that period, the increase was lower across the territory than the utility’s default rate increase – meaning competitive suppliers drove overall consumer costs down.
 
Lower costs in competitive markets are often driven by alternative suppliers, who force incumbent utilities to provide the best possible service at the lowest possible cost to attract and retain customers. PennFuture found high levels of customer switching in every utility territory where rate caps have expired – echoing a recent COMPETE study and the 2010 ABACCUS report, which both detailed rapid switching rate growth in Pennsylvania.  
 
Dozens of competitive suppliers have recognized the health of Pennsylvania’s electricity market and entered the state with multiple service plans. According to the state PUC’s consumer education website www.PApowerswitch.com, 33 competitive suppliers are servicing commercial and industrial (C&I) customers and 18 are servicing the residential sector, offering myriad product offerings like fixed-price, hourly pricing, and month-to-month plans.
 
Competition has also stimulated clean energy in the state. PennFuture found that existing nuclear power plants have increased their efficiencies, and now produce 1.7 million megawatt-hours (MWh) more than 10 years ago. In addition, 9,000 megawatts (MW) of new generation – including nearly 750 MW of wind energy – have come online.
 
Competitive suppliers are also empowering customers to support clean energy through Renewable Energy Certificates (RECs) and renewable energy-generated electricity plans, and studies have shown Pennsylvania is a national leader in solar power, energy efficiency and smart grid technology.
 
Multiple reports and independent data prove that Pennsylvania has become one of competition’s greatest success stories. With the entire state now open to competitive market forces, COMPETE encourages all homeowners and businesses to take full advantage of the power of competition.