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PPL's cap increases vs other electric companies

  • ANDREW LEIBENGUTH/SPECIAL TO THE TIMES NEWS Sonny Popowsky, a Consumer Advocate lawyer with the PA Office of Consumer Advocate(OCA) and Attorney General in Harrisburg, talks to people about comparing electric providers during the Senators' Energy…
    ANDREW LEIBENGUTH/SPECIAL TO THE TIMES NEWS Sonny Popowsky, a Consumer Advocate lawyer with the PA Office of Consumer Advocate(OCA) and Attorney General in Harrisburg, talks to people about comparing electric providers during the Senators' Energy Forum held in Schnecksville.
Published April 03. 2010 09:00AM

Recently, as well as during the past few months, a lot of new information and confusion is floating around concerning PPL Electric Utility's rising electric rate caps versus other electric generators. Most consumers seem overwhelmed or misinformed about these recent changes, as well as the options available for switching from PPL to another electric generator or company. So far about 30 percent of Pennsylvania consumers have switched from PPL to other energy suppliers or generators.

"Pennsylvania consumers have seen a spike in their utility bills as a result of the removal of the electric rate caps," Sen. Argall said.

This and many other factors lead to State Senators Pat Browne(R-16), David Argall(R-29), and Bob Mensch (R-24) hosting a public Energy Forum Wednesday at the Schnecksville Fire Company in Schnecksville. This presentation was called "How To Be A Smart Electric Consumer" which was goaled towards questions like: "Has your monthly electric bill increased?" "Have you selected a new electric generator?" "Do you know how to save money on your electric bill?" "Where do you go to compare rates?" "What is the deal with the electricity rate caps?" "Is there a catch if I switch?" Representatives from the Public Utility Commission and the Office of Consumer Advocate were on hand to address these questions and explain what this all means to Pennsylvania residents.

On Wednesday, PPL Electric Utilities told the state Public Utility Commission that it needs a 13 percent increase in its distribution revenue to continue improvements to its system and to ensure reliability. If the PUC approves the rate increase, it would likely hit in January. For the average PPL residential customer, overall rates increased by about 30% at the beginning of 2010. In the last few days, PPL Electric Utilities has requested a 5.3 percent rate increase that could cost residential customers an additional average median amount of $7.41 per month. The average monthly bill for a household using 1,000 kilowatts per hour of electricity would jump to $144.75, a 5.3 percent jump, if the increase is approved. PPL estimated their proposed increase would total an increase of about 25 cents/day to the average residential customer's bill. This latest request follows a three-year cycle of rate increase requests.

PPL's past increases were stretched amongst various customer classes, while this increase request will be held entirely by residential customers. The increase request will affect all PPL residential customers, to include consumers who opted a competitive electricity supplier. This arrives just three months after the rate caps were removed and generation rates jumped about 30 percent. However, many businesses will probably see a decrease in their rates, a result of a state Supreme Court decision that found the utility was imposing higher distribution costs on businesses. Resultantly, some small and mid-sized business would see a decrease as PPL and the PUC seek to fix historic overcharges, back to 2005, found by the state Supreme Court. PPL officials say the utility needs the increase to pay for continued investment in its delivery system and to maintain reliability as it upgrades delivery systems that were equipped in the 60s and 70s.

Sonny Popowsky, a Consumer Advocate with the PA Office of Consumer Advocate(OCA) and Attorney General in Harrisburg, had the floor for the majority of the energy forum. Poposwky pointed at that the OCA is an independent state office, administratively within the Pennsylvania Office of Attorney General. The OCA represents the interests of Pennsylvania utility consumers in legal proceedings before the Public Utilities Commission(PUC), federal regulatory agencies, and state and federal courts, as well as non-governmental agencies such as the PJM interconnection. When the Pennsylvania electric industry was restructured and opened to competition in 1996, long-term "caps" were placed on generation rates that utilities could charge their customers. In the case of PPL, those rate caps expired at the end of 2009. For almost 13 years, PPL had stricter restrictions on what they were able to charge their customers. The Pennsylvania competition law allows you to shop for an alternative electric generation supplier. In most cases, if you select an alternative supplier, you will receive your electric bill from your electric distribution company and it will include the generation and transmission charges from your alternate supplier. PPL can remain your electric supplier. Popowsky stated, "Under PA law, even after rate caps expire, utilities such as PPL are required to purchase a prudent mix of long-term, short term, and spot market resources that are designed to provide safe and reliable generation service at the least cost to customers over time." No matter who your electric generation supplier is, you will still receive regulated electric distribution service from your local utility. Competitive electric suppliers must be licensed by the PUC and must meet certain requirements in order to receive and maintain that license. Competitive electric supplier prices and terms of service are not regulated or reviewed by the PUC. Competitive electric suppliers may offer fixed or variable rates, and the length or term of the rate may vary. Before enrolling with a supplier, be sure to understand if you are agreeing to a fixed or variable rate and how long the rates remain in effect, as well as any charges that the company may charge to switch. PPL currently doesn't charge to switch.

Even if you change to a new energy generator, your bill will still be from PPL. Although, your bill will have with a few changes on the bill explaining the charges.

Vast amounts of correspondence were available to the public during the energy forum. These consisted of many types of ways to save money in your electric bill as well as other means of understanding more about the rate caps and their effects on consumers. Such resources and information provided included the new extended deadline of April 16 for to LIHEAP applications, energy saving tips, PA OCA hotline 800-684-6560, pamphlets showing ways to lower your utility bill, and government tax breaks to homeowners that upgrade their appliances or add a solar panel to their home. PPL rebates are also available for replacing or purchasing "household items and appliances with the "Energy Star" rating such as light fixtures(up to $10 rebate), programmable thermostats(up to $50 rebate), ground source heat pump(up to $217/ton rebate), dehumidifiers(up to $10 rebate), air conditioners(up to $25 rebate), dishwashers(up to 30 rebate), refrigerators(up to 50 rebate), washing machines(up to $75 rebate), and larger rebates for new home heating equipment. Call 866-660-4551 for more information.

Popowsky stated, "If you do decide to shop, there is one portion of your rate, the generation rate, that you should consider. It is what is called the price to compare."

PPL's rate is currently about 10.5 cents per kilowatt-hour. Conventional fueled generation competitors are offering savings of about 10 percent. These include: Con Edison Solutions, Direct Energy, Dominion Energy, Liberty Power Holdings, MXenergy, and others. Green energy products which include Direct Energy Renewable Wind Plan, Community Energy (wind power), and PPL Energy Plus (energy credits) are available at a price higher than basic PPL.

When choosing an electrical generation company, make sure you ask the following questions: Should I decide now or wait? What is the generation rate? Should I accept an early cancellation fee, if applicable? How long should I contract for? Do I want Green power? What other charges may appear on my bill? Do I want a fixed price? These questions should eliminate any worries or "catches" you may have.

PA Office of Consumer Advocate encourages Pennsylvania consumers to visit or call 800-684-6560 to view rates and more information about comparing electric generation companies and ways of reducing your energy costs. Upcoming improvements to this independent government website will also make comparing easier.

Christina Chase-Pettis, Senior Communication Specialist with the Pennsylvania Utilities Commission, pointed out that there are many ways to save on your electric bill. Simple things like installing a programmable thermostat, installing better insulation, and buying energy efficient appliances could save consumers $180 - $360 a year. She added, "In addition to educating yourself and shopping around, being energy efficient and conservative are the only guaranteed ways to save on your bill."

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