PUC encourages PA residents to shop for best energy prices

Mar. 20--Gladys Brown Dutrieuille, Chairman of the Public Utility Commission, Monday said the PUC strongly encourages residents across Pennsylvania to explore electric power shopping options which could result in substantial savings on the energy portion of their monthly electric bills, especially during high-usage times.

After an extended period of rising energy prices, the PUC said offers from competitive suppliers in many parts of the state can now be found at well below the electric generation price currently available from many utilities.

And because energy costs typically make up more than half a total utility bill, lower energy prices can have a noticeable impact on the size of monthly bills.

"Well, we're looking at the energy landscape," Dutrieuille said. "It really is a good time to shop right now. Based upon some of the current energy prices, shopping could result in lower prices for consumers, which is what we want to see here at the commission. Looking at lower prices can help reduce a consumer's monthly utility bill."

Dutrieuille said energy prices increased most of last year, but now, as energy prices fall, offers from competitive suppliers can be found well below the price currently available with utilities.

"And when the energy prices are falling, these competitive providers or suppliers are able to respond more quickly, which is helpful and able to offer our consumers lower energy prices, lower than what the utilities are offering," Dutrieuille said.

According to data compiled by the PUC's PAPowerSwitch.com website, more than 3.9 million residential customers across Pennsylvania could save by cutting the size of their monthly bills by using competitive electric suppliers. That figure is in addition to the 1.2 million residential customers in Pennsylvania who currently shop for their electric supply.

Also, the same data from PAPowerSwitch indicates that a typical residential customer in Pennsylvania could save between $2 and $49 per month on their electric bill, based on a survey of supplier offers currently posted on PAPowerSwitch (for a residential customer using 700 kwh of electricity per month).

"Well, as you know, energy prices are typically about half of a consumer's bill," Dutrieuille said. "So lower energy prices can have a noticeable impact on a consumer's monthly bill. So with all of this in mind, now is a very good time for consumers to explore those possibilities in terms of savings by shopping for an electric supplier."

PPL comments

Alana Roberts, Manager of Community Relations and spokesperson for PPL Electric Utilities, said PPL appreciates the PUC's efforts to educate customers on this topic.

"Likewise, we encourage all customers to make sure they are getting the best deal for electricity supply by comparing prices offered by suppliers," Roberts said. "PPL Electric customers who are shopping for power and paying more than our default rate of 14.6 cents are paying more than needed. Customers who aren't shopping, are missing out on potential savings.

"As always, we remind customers who shop, to shop smart and carefully review supplier terms and conditions."

Roberts said bottom line, higher energy prices are challenging enough.

"Paying far more than you need to on energy supply leaves less real money for families and businesses," Roberts said.

Where can you save, and how much?

According to a recent sampling of supplier offers posted on the PUC's electric shopping website -- PAPowerSwitch.com -- there are substantial #SaveInPA benefits for consumer energy costs, depending on their utility service territory.

The Commission noted that the greatest potential savings -- ranging from 21% to nearly 49% -- are currently available in the service territories for PPL, PECO, and Duquesne Light (subject to changes in market prices). Collectively, those utilities serve many of the state's largest communities, including Philadelphia and Pittsburgh, along with many of their suburbs, as well as Allentown, Bethlehem, Harrisburg, Lancaster, and Scranton.

The top service territories where short term (three month, fixed rate, with no added fees) and long term (12 month or longer, fixed rate, with no added fees) supplier offers are substantially below the utility generation rate are:

--PPL -- Supplier prices are as much as 37% lower for long term contracts and nearly 49% lower for short term contracts.

--Duquesne Light -- Supplier prices are as much as 21% lower for long term contracts and 36% lower for short term contracts.

--PECO -- Supplier prices are as much as 21% lower for long term contracts and 31% lower for long term contracts.

In each of these areas, potential savings are large enough to make a very noticeable impact in monthly electric bills.

The Commission emphasized the following about the current energy shopping market:

--In general, the more energy a household uses, the more quickly small changes in energy prices will convert into large dollar savings on monthly bills.

--When energy prices are falling, competitive suppliers are often able to more quickly respond and may be able to offer lower energy prices than utilities -- but global energy markets remain volatile so prices can also move upward if circumstances change.

--Temperature has a major impact on energy usage, which can also drive total energy bills up or down, so consumers should continue monitoring their energy usage and explore how efficiency and conservation can help manage energy bills.

What is electric shopping?

In most areas of Pennsylvania, residents can choose who supplies their electricity, based on price or other factors. For consumers who do not shop for competitive suppliers, the state's electric utilities obtain power on their behalf. This is known as the "Price to Compare" (PTC) and can be used as a baseline to compare with offers from competitive suppliers.

Utilities reset their PTCs two to four times per year, using a procurement process overseen by the PUC. The electric utility in effect "shops" for those customers, and energy costs are passed along to all non-shopping customers. By law, utilities cannot make a profit on electric generation, as generation costs are simply passed through to utility customers.

It is important to note that these energy generation prices are separate from the closely regulated rates that utilities charge for their distribution services -- the delivery of electricity to homes.

How to shop?

Consumers can use the PUC's PAPowerSwitch energy shopping website to explore and compare other offers from competitive energy suppliers which may provide savings compared to their utility's default service rate.

The website provides consumers with valuable information on how to shop for electric supply services -- enabling consumers to quickly compare offers from competitive suppliers against the default service rate from their local utility and learn more on switching to a competitive supplier, or returning to default service, should they choose.

Another alternative for default service customers not participating in the competitive electricity market may be their utility's voluntary Standard Offer Program (Standard Offer) -- providing those customers with the option of receiving service from a competitive supplier at a fixed price that is 7% below the utility's current PTC. The Standard Offer price is fixed for one year and can be canceled by the customer at any time with no early cancellation or termination fees.

Note: The Standard Offer Program may not be always available in all utility service territories. Consumers should contact their utility or visit their utility's website for more information or to enroll in an SOP program.

What to look for?

It is important for every utility customer to understand what they are paying for electric generation supply, either through default service from their electric utility or a contract with a competitive energy generation supplier.

Key questions to ask include:

--How do competitive suppliers' rates compare with the utility's Price to Compare?

--Is the supplier contract for a fixed or variable rate -- and if the rate is variable, what are the conditions of changes in the price for electricity?

--Does the contract provide for additional fees -- such as an enrollment fee or early contract termination fees?

--When will the contract expire -- and what are the options for consumers as the contract end date approaches?

Consumers are advised not to sign a contract without knowing the length of the contract, the price, whether it is fixed or variable and if there are any fees. Information on fixed and variable electric rates is available on the PUC's PAPowerSwitch website.

Consumers who have questions or disputes may contact the PUC's Bureau of Consumer Services at 1-800-692-7380. More information on understanding a contract with an electric generation supplier and electric switching can be found on PAPowerSwitch.com.

Reach Bill O'Boyle at 570-991-6118 or on Twitter @TLBillOBoyle.

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