Philadelphia, PA (PRWEB) February 22, 2011
The 1997 Pennsylvania Electric Generation Customer Choice and Competition Act gave all Pennsylvanians the right to choose the company that generates their electricity. To ease the transition to a competitive market, the law capped electric rates at 1997 levels for a set period of time. While some companies’ rate caps have expired earlier, all of the remaining rate caps have expired as of December 31, 2010.
With the expiration of rate caps complete across the state, offers of lower rates from electricity suppliers are widespread. To date, well over 800,000 consumers have taken advantage of these lower rate offerings and switched suppliers. But should you switch now to take advantage of a lower rate being offered? Should you expect the lower rate of any particular supplier to continue? “Not necessarily, based on what we’ve seen so far,” says Chan Apweg, an Energy Analyst at Cost Management Consultants (http://www.costmc.com), a leader in telecom and utility billing auditing for over twenty years. Apweg explains that from what he has observed, companies are using lower rates just to lure in new customers. A company offering a lower rate today may very well be less competitive in the future.
As an example, Apweg cites that in December, PP&L’s (Pennsylvania Power and Light) flat rate was 9.27 cents per kilowatt hour. Dominion Energy, PP&L’s cheapest competitor at the time, was advertising a rate of just 8.34 cents per kilowatt hour, a 10% discount. Many PP&L customers switched to Dominion Energy to take advantage of the discounted rate. Then, in early January, PP&L announced its new ‘time-of-use’ rate plan. The rate of this new plan was so low that it even surprised consumer advocates. The ‘time of use’ rate was just 7.5 cents per kilowatt hour between the peak hours of 5 p.m. and 7 p.m. and 6.1 cents off-peak. That means that even the peak rate of this new plan was significantly lower than PP&L’s and even Dominion Energy’s flat rate. It averages to almost a 30% savings from PP&L’s flat rate and 15% lower than Dominion Energy’s flat rate.
In addition, PP&L’s new ‘time-of-use’ rate plan is only available to current PP&L customers. Consequently, if you left PP&L in December to join Dominion Energy for the then lower rate, you cannot take advantage of PP&L’s ‘time-of-use’ rate plan. And even current PP&L customers who switch to the ‘time-of-use’ plan will need to be ready to switch suppliers again in May. That’s when PP&L’s ‘time-of-use’ rate plan is expected to increase significantly.
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