June 1 Price Increases for Electric Generation – What you can do

Act Now to Compare Prices, Consider Shopping with Competitive Suppliers and Energy Options on PAPowerSwitch.com

The Pennsylvania Public Utility Commission (PUC) is alerting consumers that most utilities will be adjusting their prices for electric generation on June 1 – cautioning that many non-shopping (default service) customers will see sharp increases in energy costs as summer approaches, ranging between 6% and 45% depending on their electric utility.

Pennsylvania’s regulated electric utilities routinely adjust, either quarterly or biannually, the default service price they charge non-shopping customers for electric generation.  This price, also known as the “Price to Compare” (PTC), is what consumers use to compare prices and potential savings among competitive electric generation suppliers (suppliers).

The upcoming price changes, combined with the increased use of electricity typically seen during the long, hot days of summer, make this a very good time for consumers to evaluate their energy options.  Between now and June 1, the PUC encourages consumers to carefully review their electric bills to understand the rates they will be paying – and explore the PUC’s official electric shopping website, PAPowerSwitch.com, for details on competitive offers, along with tips for energy conservation and savings.

Continued Upward Pressure on Energy Prices

Currently, higher wholesale market prices for electricity, fueled in large part by shifts in supply and demand for natural gas, have increased purchasing costs for electric distribution companies (EDCs) and thus driven up many PTCs.  By law, utilities cannot make a profit on electric generation, as generation costs are simply passed through to utility customers.  The PTC averages 40% to 60% of the customer’s total utility bill.  However, this percent varies by utility and by the level of individual customer usage.

The PUC notes that the Commission does not regulate prices for the generation portion of electric bills. 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. Generation prices are separate from the closely regulated rates that utilities charge for their distribution services – the delivery of electricity to homes and businesses.

“Price to Compare” Changes for Residential Customers

In most areas of Pennsylvania, consumers can choose who supplies their electricity, based on price or other factors, such as renewable energy.

Beginning June 1, electric distribution companies report the following changes in their PTCs for residential customers: 

  • Citizens’ Electric, up from 7.3995 cents to 9.3667 cents per kWh (26.6%);
  • Met-Ed, up from 6.832 cents to 7.936 cents per kWh (16.1%);
  • Penelec, up from 6.232 cents to 8.443 cents per kWh (35.4%);
  • Penn Power, up from 7.082 cents to 8.694 cents per kWh (22.7%);
  • PPL, up from 8.941 cents to 12.366 cents per kWh (38.3%);
  • Wellsboro Electric, up from 7.7569 cents to 9.592 cents per kWh (23.7%); and
  • West Penn Power, up from 5.667 cents to 8.198 cents per kWh (44.6%);

*Note:  Energy price changes for several utilities, including Duquesne Light, PECO and Pike County Light & Power, are still being calculated but are expected to rise.  Final prices for those utilities will be available later in May.

Standard Offer Program and Other Shopping Options

One option consumers may want to explore immediately is their utility’s voluntary Standard Offer Program (Standard Offer) – which is another alternative for default service customers not participating in the competitive electricity market.  Standard Offer provides 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.  There may not be participating suppliers in all areas.

After exploring the Standard Offer, consumers may want to lock in a discount with their utility’s current PTC – which could amount to future savings with PTC increases on June 1.  Residential and small commercial customers can find out more information and enroll in the Standard Offer Program by contacting their electric utility. 

Consumers and small businesses can also 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 and small businesses 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.

Review of Electric Bills and Supplier Contracts

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 membership 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 here.

Business Customers

For small business customers, the PUC notes that most EDCs are also adjusting their prices to compare in their small Commercial and Industrial rate classes. Among the state’s major EDCs, default service rates for small businesses are increasing on June 1 – ranging from an increase of 20.8% in the PPL service territory to a 55.6% increase in West Penn Power’s service territory.

Encouraging Energy Efficiency & Conservation

You can explore energy conservation to help manage bills and reduce energy usage. PAPowerSwitch, as well as the PUC’s website for natural gas shopping, PAGasSwitch.com, have interactive information and tips for saving energy.

More Help Available

Desire more specific assistance regarding consumer protection or energy projects, energy law, or real estate law, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

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