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    Here’s why the state can’t do anything about rising electricity bills


    June 7, 2022 - Daniel Urie - durie@pennlive.com

     

      By now you’ve heard the bad news. Your electric bill is likely going up.

      In fact, the average default service customer at PPL is going to be looking at a $34 increase in their monthly bill beginning this month.

      The costs for electric generation increased as of June 1. Increases, depending on the provider, run the gamut from 8.1% to 44.6%.

      What is a generation charge?

      A generation charge (or supply) is part of the basic service charges that appear on every customer’s bill for producing electricity. The generation portion averages 40% to 60% of the customer’s total utility bill, according to the Public Utility Commission.

      Why isn’t the state doing anything about the increases?

      Because they can’t.

      The PUC doesn’t regulate the generation charge. Generation service is competitively priced and is not regulated by the commission. The amount consumers pay depends on the contract between the customer and the supplier.

      The suppliers shop for the electricity on the open market and are required to seek the best prices.

      What does the PUC regulate?

      The PUC does regulate the distribution charge (or delivery) that you see on your electric bill. That charge is part of your basic service charge that appears on every bill for delivering electricity from the electric distribution company to a home or business. The charge varies depending on how much a house or business uses.

      Why are prices so high?

      Volatility in the wholesale energy markets — where the utilities shop for electricity — is driving up prices. About half of the state’s electricity comes from natural gas, which is increasing in price. Patrick Cicero, acting Consumer Advocate for the Pennsylvania Office of Consumer Advocate, recently told StateImpact Pennsylvania that “the reason that the gas prices are high is because [the country] has significantly increased exports of liquefied natural gas and has not increased natural gas production.”

      Cicero told StateImpact that the difference in price increases between utilities comes down to long-term contracts and the procurement strategies used by the companies.

      What should I do if I’m struggling

      to pay my bill?

      The PUC recommends that customers who are struggling to pay their bills or anticipate struggling due to the rate hikes, to contact their utility company to seek assistance.

      “Utilities understand the assistance programs available in their communities for income-qualified consumers – including utility-run Customer Assistance Programs, national programs like the Low-Income Home Energy Assistance Program and the Emergency Rental Assistance Program, and various hardship fund programs operated by utilities and nonprofit organizations,” the PUC said in a news release. “Utilities also can help enroll consumers in assistance programs, guide them to other available resources and discuss new payment plan options to address overdue balances and help consumers move forward.”

      How can I shop for electricity?

      In most areas of Pennsylvania, consumers can choose who supplies their electricity, based on price or other factors, such as renewable energy. For those customers that do not shop, electric utilities obtain default generation service using a procurement process overseen by the PUC – the electric utility in effect “shops” for the customer. Shoppers sometimes can find lower prices than the default rates. Customers can compare rates for providers in their area at www.papowerswitch.com. You’ll want to check your bill for the “price to compare.”

      Consumer advocates also warn that if you shop around and plan to switch suppliers, you should make sure to do your homework. Consumers should make sure that they understand all terms and conditions contained in their supplier contract. Know whether the rate you are signing up for is fixed or variable, for example, and also whether there are cancellation fees.

      Are there any other programs?

      Another alternative for default service customers not participating in the competitive electricity market might be their utility’s voluntary Standard Offer Program. Under that program, the utility can refer certain customers calling the utility, such as those with high bill complaints, to a randomly selected retail electric supplier. The supplier, or a third party acting on behalf of the supplier, must offer the customer a standard 7% discount versus the utility’s current “price to compare,” which is fixed for 12 months.

      What is a default service customer?

      Default prices apply to any customer who doesn’t proactively shop for electricity, which consumers in Pennsylvania have had the ability to do since 2010. Shoppers generally can find lower prices than the default rates.

      What can I do to save money

      on my energy bill?

      The PUC suggests doing these five things to control energy usage.

      Pay attention to the thermostat – Every degree you raise or lower the temperature could impact energy costs by up to 3%. Also, consider a programmable thermostat to automatically raise temperatures while you are away from home.

      Have your air conditioner serviced – Regular air conditioner maintenance along with clean air filters help ensure efficient operation of your cooling system.

      Insulate and seal leaks around your home – Adding insulation, installing storm windows and doors, and sealing cracks and air leaks can help you stay cooler and use less energy.

      Install or repair ceiling fans in high-trafficked rooms – Use ceiling fans to circulate the air, keeping the room and you cooler.

      Protect windows to reduce heat buildup – Smart landscaping and exterior window coverings are just two ways that you can better protect windows and reduce the impact of heat buildup in your home.

      Have questions?

      The Pennsylvania Office of Consumer Advocate has a hotline that can assist households with questions about their energy bills. Call 800-684-6560 from 8:30 a.m. to 5 p.m. Monday through Friday or email them at consumer@paoca.org.

      Have complaints?

      Consumers who have questions or dispute a contract cancellation can contact the PUC’s Bureau of Consumer Services at 800-692-7380.

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