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Electric Choice:
It is here, and it is good for PPL Electric Utilities customers

By Jim Nulton

For 2010, all customers of PPL Electric Utilities have choices when it comes to their electricity, or generation supply. They think that is a good thing.

Prices increased in January when generation rate caps expired. Those rate caps kept prices at 1990s levels for more than a decade while the cost to generate electricity rose across the country.

By shopping for generation supply, their customers may be able to lessen the impact of rising prices.

Business and residential customers have been receiving supply offers from companies for months. More than 260,000 customers had already selected another supplier by late January.

PPL Electric Utilities continue to receive phone calls from other customers asking what they should do and whether offers are legitimate. Some have said they are reluctant to switch out of loyalty to PPL Electric Utilities.

The message to those who call is, explore all of your options.

PPL Electric Utilities cannot and does not endorse any particular supplier. There are no PPL Electric Utilities “preferred” or “approved” suppliers. Their role is to be impartial and explain how customers can shop and the types of questions they should ask suppliers.

To be clear: PPL Electric Utilities is not competing with generation suppliers. They do not produce electricity. Their job is simply to deliver it.

If  you  do  not  choose  another supplier in 2010, they are required by law to buy power for you. Prior to 2010, they sought competitive bids from suppliers through a process approved by the Pennsylvania Public Utility Commission.

PPL Electric Utilities and other distribution companies  in Pennsylvania are not allowed by the Electric Energy Choice Act to own generation resources. However the act does require PPL EU and other Pennsylvania distribution companies to be the provider of last resort (POLR) or to provide default service for those customers who have not chosen a energy supply so they will have a continual flow of electric energy.

Therefore since PPL EU has no generation capacity the Public Utility commission requires us to put this POLR supply out for contract bid.  The bids are approved by the PUC and the  price PPL Electric Utilities is charging for generation in 2010 is the average price it pays 11 different suppliers based in 8 different states. Remember: PPL Electric Utilities doesn’t produce power. It’s strictly a delivery company.  If you don’t choose a supplier, it will buy power for you and pass along the costs without profit. The bottom line: PPL Electric Utilities won’t make a penny from the increase that customers pay in 2010. That money will go to 11 different generation companies.

They are now passing suppliers’ prices on to you without profit. Those charges appear on the generation portion of your bill.

In fact, PPL Electric Utilities is not making money from the increase you are paying in 2010. If you do not shop the money you pay goes directly to 11 different generation suppliers based in eight different states.

The bottom line is that it neither hurts nor  helps PPL Electric Utilities if you  shop.  Rather,  it  is  in  your interest to explore all of the options you may have. That is why they are encouraging all customers to do so.

No  matter  what  you  choose, they will still deliver your power. You will see no difference in your electric service, or their commitment to customers. They will still be the company you call to report a power outage. And they will continue to offer you programs, tools and information that can help you save energy and money.
In  fact,  they  have  already introduced many new programs for customers. They  provide opportunities and energy efficiency incentives for all customers, ranging from rebates for energy-efficient appliances to discounts on compact fluorescent lights and much more.

As  recent weeks have shown it is a new world. Competition is here. It will transform the energy business, leading to more choices, better deals and real innovation.

About the Author:

Jim Nulton is the Harrisburg Regional Community Relations Director for PPL Corporation which includes Dauphin, Cumberland,  York, Perry  and   Juniata counties.  Jim  has had held numerous management assignments during his 32 year career,  including  serving as PPL Corporations International Director for economic development.  Jim can be  reached  by  phone  at  717-257-5608  or jnulton@pplweb.com.

(Side bar)
What to Know About Electric Choice

  1. The power to choose is yours. Pennsylvania’s Electric Choice program lets you choose the company that generates your electricity. Whether or not you choose a new electric generation supplier, PPL Electric Utilities will continue to deliver electric service to your home or business. Because generation prices have been capped at 1996 levels, few suppliers have made offers to our customers in the past. Now that rate caps have expired they expect you will have greater opportunities to shop for generation supply in 2010.
  2. Your 'Price to Compare' is your key to shopping. You can use the it to evaluate prices offered by competitive electric generation suppliers. If a supplier’s price is lower than your 'Price to Compare', you can save money by choosing that supplier. They are providing you this information because the 'Price to Compare' does not appear on your electric bill. This number includes generation and transmission charges only. Other charges that appear on your bill, such as distribution charges, are still paid to PPL Electric Utilities.
  3. Information is available to help you compare suppliers when there are offers.
    • Visit the Pennsylvania Public Utility Commission Web site, www.puc.state.pa.us. Click on Electric shopping and select “Find Suppliers” to see all licensed suppliers.
    • Visit the Pennsylvania Office of Consumer Advocate Web site, www.oca.state.pa.us (see Residential Electric Shopping Guide), or call 1-800-684-6560 for a list of current suppliers in your area and their prices.
    • Visit the PPL Electric Utilities Web site, www.pplelectric.com/choice, or call toll-free: 1-888-668-4775 for residential customers, 1-888-220-9991 for nonresidential customers.

PPL Projects a Huge Rate Increase
   by Crystal Camero
n

Pennsylvania opened electricity to competitive forces years ago, but the legislature and regulators placed RATE CAPS on PPL and other utilities to shield customers from any kind of price shock.  PPL rates changed on January 1, 2010 and now people are starting to realize the difference on their electricity bill. Wholesale Energy prices are currently very competitive, which makes this a very good time to secure your electricity rates.  Competitive supply pricing will provide you with a new rate based on low current market conditions instead of PPL’s 20%-40% increase.
PPL has issued a press release regarding the final wholesale purchase, which was done on October
   8, 2009.  See figure 1
Large  power  users  with   professional energy managers across  Eastern Pennsylvania   started
   signing electricity contracts with alternative generation suppliers in Q4 2009.  If you have not looked,
   you should at least inquire about how much your bills have gone up since the new year.
About the Author:
For the  past six  years Crystal has focused her career goals within the energy industry, educating and consulting both residential and commercial clients on the deregulated market. Crystal is currently a Senior Energy Consultant at Power Brokers, L. P.
Power Brokers,  L.P.  has  successfully awarded more than $2 Billion of energy commodity contracts nationwide, since its inception in 2001 and has been awarded the DOE’s Energy Innovator Award. Crystal    can    be    reached    by   phone at 469-533-5623 or ccameron@powerbrokersusa.com.
Figure 1
RATE INCREASE FINAL NUMBERS
this is the increase to the generation portion of the bill:
            •  Residential 29.7%
       •  Small business 18.4% (this only applies to very small single phase service on GS-1)
            •  Mid-sized business 36.1% (applies to rate GS-3 which is most businesses)
            •  Fixed energy rate for large businesses at 9.2¢ (LP-4) and 8.95¢ (LP-5 and LP-6)
            - LP ("Large Power") customer must elect by November 9th whether to take fixed, LMP or choose another  
               supplier
Final tariffs will not be published until December "when several smaller components of the bill are routinely adjusted and approved by the PUC."
According to the PPL press release: "Under current market conditions, customers may be able to secure better pricing by shopping and selecting an alternative retail supplier."

 
 
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