Swarthmore College’s Head of Maintenance, Ralph Thayer, sent the following email message to all faculty. It nicely explains the situation, at least as he understands it.

Subject: Electric Choice

More than a few folks have inquired about what happens when the electricity market as we know it changes on January 1, 2011. At that point in time PECO will be relegated to the role of a Local Distribution Company, meaning they won’t be providing the generation facilities, just the distribution grid. This has actually been in the works for better than a decade with the Pennsylvania Public Utility Commission taking care to roll out the change in an orderly fashion to avoid market chaos. This will be the final step to full deregulation.

Bear in mind you, as the end customer, don’t actually have to do anything. You’ll still get your power from PECO and your bill from PECO albeit at their default rate off $0.0992 per kWh plus the distribution costs. To compare that to your current charge for generation add the “Generation Charges” and the “Transmission Charges” on your bill. The current Residential Service Rate is $0.07530. You may choose to shop here for a rate lower than PECO’s default rate:
http://www.papowerswitch.com/shop-for-electricity/shop-for-your-home/by-distributor/peco-energy/rs/

You’ll see from the offerings that there is quite a bit of variation in pricing. What you should be mindful of is you will be entering into a contract with what ever supplier you choose. Read the contract. Some allow you to cancel at a moments notice. Some require a long term commitment. Some offer a variable rate. Most offer only a fixed rate.
Some include all tax and tariffs in their rates. Some may not. Some are in-state vendors. Some are not. Some will bill through PECO. Some may bill you separately.

If you are getting the impression that “Choice” has simply offered you an opportunity to be vexed and perplexed, relax. You have an opportunity to lower your future electric bills and hopefully encourage the development of a competitive market. You need to have an understanding of your patterns of use to get an idea if any one company can offer you long term savings. You may decide that there’s not enough savings to warrant a switch. Be aware, however, that the PECO “Price to Compare” changes Quarterly! The number you see now will not be the same in the spring. Its likely to be higher. PECO in fact is bound by the PA-PUC to not compete in this fledgling
market, hence the high rate. As the market settles out we may find packages that will reward residential customers for participating in power reduction programs. That’s a bit in the future. PECO has not
been forward thinking in providing so called Smart Meters at the residential level, but it will come.

The silver lining to the economic downturn is the scary projections of 50% increases in electric rates fizzled. As it stands, if you do nothing and accept the default price you will see a 32% increase in the generation/transmission portion of your electric bill. Shopping for a penny per kilowatt hour cheaper will lop the increase almost in half. If you can do better than a penny your reward will be proportional to how many fractions of a penny you can squeeze out of that rate. Do not be lulled into thinking rates will stay this way. The electricity market is dynamic and then some. Electric rates will rise and fall with the market and those rates are tied tightly to the price of natural gas. Currently natural gas is at a low point.

Don’t count on it to stay cheap. To put buying electricity in real terms you are contracting to buy a commodity that cannot be stored, so it doesn’t exist yet. You will buy an unknown amount of that product at some point in the future, based on the future price of natural gas, but you want to know the price of that electricity commodity now… Yes, it does have a twilight zone quality to it, but the PA-PUC, the Federal Energy Regulatory Commission, and PJM, LLC are not going to go back to the old ways. Finding ways to conserving electricity now will help you in the future when the economy gets its legs back. Hope this helps.

- Ralph

Jim, “Pennsylvania Electric Choice” has been available for I would guess 12 years or so. Remember the “Green Mountain Energy” advertisements which were pointed at the Pa electricity market years ago? Pennsylvanians had and continue to have the option to select the electric generation company of their choice, Peco Energy has always been responsible for and will continue to deliver that electricity to your house, meter it, and repair the transmission infrastructure(wires) in our neighborhoods.

For example, I have a rental house in Media that has solar shingles that generate electricity. I am one of an ever increasing number of PV(photovoltaic) generating members of “The Energy Co-op” in Philadelphia. This co-op has bought the rights from me to sell my electricity. Most of it I buy back from them but what I do not use is available to sell to other members that buy the Energy co-op’s 100% renewable electricity that also includes electricity generated from landfill methane generators and small hydroelectric generators.

Most Peco residential customers have the standard “RESIDENTIAL ELECTRIC” service plan which allows the consumer to make a selection of any electricity generator that has been approved by the PA Public Utility Comission( see first link below). Here at my residence, I have a Peco “residential heat service” contract because I do not use a fossil fueled heating appliance to heat my house. That service plan restricts me from buying electricity other than Peco generated “brown” electricity( that is mostly a mix of coal and nuclear generated electricity) or they do enable me to pay an additional $0.0254 per KiloWattHour for PECO WIND which ensures that the electricity I use at my house will be generated by the “Community Wind” company that has been so successful in building turbines here in PA. I will leave it to your imagination as to whether or not I spend around $30.00 more on my monthly electric bill to ensure that the development of wind energy in PA has support.

You have a choice to determine how you would like to have your electricity to be generated.

Be careful, there are choices available that are 100% coal fired and they are cheaper but you will be surprised at how inexpensive it is to make an environmentally enlightened decision.

Here is the link to the suppliers allowed to sell to PECO customers.

http://www.puc.state.pa.us/utilitychoice/listofsupp.aspx?ut=ec&ShowSupp=5

If you are interested in an overview of the PA Electric choice plan. Here is that link.

http://www.puc.state.pa.us/utilitychoice/whatis.aspx?ut=uc

I do not know if the list includes the name of the certifying accounting agency that is responsible to ensure that the amount of electricity purchased by retail customers is actually generated according to the specifications as defined by the generator. Environmentalists have always held the “GREEN-E” agency as top notch.

Kevin

People should be advised to act with extreme care and read all the fine print before switching. There are a lot of scams and ripoffs in electricity marketing.

And Liz from DVS said:

Jim,

The lifting of PECO’s rate caps and the resulting rate increases, coupled with the drop in wholesale prices for electricity have created the opportunity for many competitive suppliers to beat PECO’ “price to compare”. It will not be hard to find any number of competitive suppliers who can save you money on your electric bill.

The Office of Consumer advocate’s website has a good listing of the competitive suppliers.

Liz Robinson

One can also listen to Sonny Popovsky (Director of the PA Office of Consumer Advocacy) speak about Rate caps yesterday at http://whyy.org/cms/radiotimes/2010/11/29/pas-electricity-rate-caps-coming-off/ or visit http://www.oca.state.pa.us/Industry/Electric/elecomp/pecor.pdf to check and compare rates.

Nothing works as well as minimizing one’s fossil fuel (gas, electric & gasoline, etc.) use in a tight home or office if possible and bundling up while doing so.

Henry D’Silva

Hi Jim,
Andy Maykuth had a story about this recently in the Inquirer. Here’s where it is:
http://www.philly.com/philly/business/20101123_The_scramble_to_lure_away_Peco_customers.html
Cheers,
Sandy

Sandy Bauers, environment reporter
The Philadelphia Inquirer
400 N. Broad Street
Philadelphia, PA 19130
215-854-5147
See my GreenSpace column and daily blog here:
http://www.philly.com/inquirer/columnists/sandy_bauers/
Follow me on Twitter: http://twitter.com/sbauers
For the Inquirer’s health and science page: http://www.philly.com/inquirer/health_science/

Here’s an explanation I recently received from a member of the Swarthmore EAC who specializes in energy issues:

“There are currently about a dozen companies chasing residential customers. PECO will continue to deliver your power (for 5.96 cents/kWh), and in most or all cases send you your bill, but switching generators will be a good deal, as they can probably all beat the 9.92 cents/kWh “price to compete” from PECO. Many will have options to offset some of your use (20% to 100%) with renewable energy credits (RECs), just like PECO Wind. PA’s public utility commission maintains a web site devoted to electric choice (http://www.puc.state.pa.us/utilitychoice/), which provides a link to the PA Consumer Advocate. A couple clicks into the latter, you’re provided with a good info sheet on comparison shopping (with the specific offers of the various competitors).”

Hope that’s helpful.

Two other asset checks arrived (Van Kampen and Delaware Investments) and I sent them to The Arc Trust of Pennsylvania. It does seem that we are moving forward. Finally!