Pennsylvania rate cap expiration

A just-released COMPETE report detailed switching rates in Pennsylvania exceeding even robust national averages, and recent events illustrate how the state’s competitive market continues to be successful.
 

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.

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.