James Cawley

Electricity competition is at an important crossroads in Pennsylvania. Six months ago, rate caps expired in one Pennsylvania utility’s service area, and six months from now rate caps expire in the rest of the state. For the first time, the state’s entire retail market will be open to competitive forces.
 
But already, the success of competition is clear. Wholesale electricity prices are decreasing, and hundreds of thousands of consumers are switching power suppliers to obtain lower-cost electricity than is available from their incumbent utility suppliers.
 

Less than three months after the highly publicized removal of artificial rate caps in PPL Electric Utilities’ territory, consumers enjoy multiple power supplier options and clean energy is thriving in competitive electricity markets across the state.

Consumers have saved money under the competitive model when compared to the traditional monopoly model,” James Cawley, Pennsylvania Public Utility Commission (PAPUC) Chairman, testified at a recent State Senate hearing. “It’s been a great success.” More than 550,000 customers have switched power suppliers statewide, reports the PAPUC’s PAPowerSwitch Web site, which provides consumers with advice on how to find the right competitive power supplier.

The amount of customers who have switched within the PPL Electric Utilities’ service territory is “astounding,” said Chairman Cawley. 320,000 residential customers – and 380,000 total customers – are purchasing electricity from competing providers. Fourty-six percent of total electricity demand is being met by competitive suppliers. There are 28 competing suppliers serving customers in PPL Electric Utilities’ service area, including nine suppliers for residential customers.

Hyperbole and half-truths have clouded the picture of Pennsylvania’s expiring rate caps and ignore the fact that retail electric competition has saved that state’s consumers billions, according to a recent op-ed by Jan Jarrett of PennFuture. Scary stories, she says, are becoming urban legends.

Responding to critics who argue consumers should return to monopoly control of electric markets, Jarrett points out that restructured power markets have paid dividends to much of the state. Beyond the fact that state electric rates are now 5 percent lower than the national average (compared to 15 percent above the national average before competition), renewable wind power generation and energy conservation innovations have boomed in Pennsylvania’s organized market –a direct benefit of competition.