Electricity Deregulation in Pennsylvania has Spurred Countless Offers of Lower Electricity Rates. But Are These Offerings just 'Teaser Rates'?

Share Article

The deregulation of electricity generation in Pennsylvania has resulted in scores of new electricity suppliers offering attractive lower rates. Should you switch suppliers now to take advantage of the lower rates being offered? "Not necessarily, based on what we've seen," 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.

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.

"Unfortunately, this type of scenario is becoming commonplace in the industry and may get worse as the competition increases. We are seeing an increase in business clients coming to Cost Management Consultants because the energy savings that they had anticipated did not materialize. They understand that the savings that can be garnered by having utility auditing experts monitor their utility bills are enormous." Apweg goes on to say, "You cannot be passive anymore when it comes to your utility expenses. You need a company to represent you that understands the intricacies of the utility industry and has the technical expertise to insure that you get the most for your dollars."

About Cost Management Consultants:
Cost Management Consultants specializes in utility billing. Since 1987, Cost Management Consultants has been providing business clients with a no cost/no obligation evaluation of their telecommunications and utility bills resulting in the savings of millions of dollars for their clients. Their Telecommunications and Utility Audits are performed off-site, with little or no involvement from their clients' company staff. This allows for their clients to conduct their daily business functions while Cost Management Consultants works behind-the-scenes to obtain refunds and credits for past overcharges as well as reduce present telecom and energy costs.

For more information please visit http://www.costmc.com.

# # #

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Cynthia Swingle
Visit website