Thursday, March 24, 2011
Duquesne Light’s latest cost increase for residential power and the way the utility sets its prices have helped open the door to competing suppliers, Pennsylvania’s consumer advocate said Wednesday.
Eight companies list prices lower than Duquesne Light’s 8.89 cents per kilowatt hour on state websites comparing costs for electricity. Longtime competitor Dominion Energy Solutions is promoting a 7.49-cent deal, or 16 percent off the utility’s price.
Other discount offers range from 7.19 cents to 8.45 cents. Some prices are locked in through the end of 2011 or longer, while others fluctuate — meaning if energy costs rise suddenly, customers could pay more than the utility price. And some deals have early termination fees of $100 or more.
Consumer Advocate Sonny Popowsky said Duquesne Light officials “set their price for default service last year, based on what they thought prices would be over the next two and a half years.”
“They chose a fixed price,” he said, “but power prices have come in recently at lower than projections, and that enables the marketers to beat the Duquesne price.”
Duquesne Light began a default service plan in January that raised the utility’s price by 0.72 of a cent and runs through May 31, 2013. Most other utilities such as West Penn Power adjust prices quarterly, Popowsky said.
Privately held Duquesne Light earns the majority of its profit by delivering power over its lines and transformers, spokesman Joseph Vallarian said, declining to give specifics. A financial report from Australian investment trust Duet Group, which owns 29 percent of the utility, indicates revenue rose 9 percent in the second half of 2010 to $607 million due to a warmer summer and a better economy
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