Electricity Deregulation Blog

Homeowners can lessen costs of energy

SOMERSET — Residents might be able to get a smaller increase in electric rates come next January than they otherwise might.

OnDemand Energy Solutions of suburban Pittsburgh aspires to work with Chambers of Commerce in Greater Johnstown to buy power in bulk for Penelec residents, passing the savings on to homeowners.

The company already is doing just that in PPL’s service area.

Rates went up Jan. 1 but, for OnDemand customers, not as high as they would have otherwise.

The hitch is that any discounts only would be available to employees of companies working through the Chamber of Commerce, said John Bodine, OnDemand vice president. The program is not available yet.

The latest estimates call for Penelec rates to rise 24 percent with the Jan. 1 deregulation.

“There are two ways to try to lessen costs:?On the supply side, with the lowest kilowatt hour (price), and to be on the lookout for energy-efficient incentives via Act 129,” he said. Bodine addressed residential costs after delivering a 90-minute class teaching businesses how to cut power costs.

Act 129 of 2008 mandates that electric companies cut overall use of power by customers by 1 percent by May 2011 and by 3 percent by May 2013.

The law will be enforced by potentially millions in dollars in fines that the state may levy against utilities, said Scott Surgeoner, spokesman for FirstEnergy, Penelec’s parent company.

“If you and I were each to make a series of small changes – not lifestyle changes – that 1 and 3 percent is totally realistic across the state of Pennsylvania,” Surgeoner said.

He suggested that people use fluorescent bulbs instead of incandescent, fans instead of air conditioning, close blinds during summer when the sun is hot, and switch to programmable thermostats and Energy Star appliances.

If Penelec’s incentives are approved by the Public Utility Commission, the company could offer rebates on programmable thermostats and efficient appliances. PUC approval is expected within weeks.

Rebates would be retroactive to Jan. 1 of this year, at least, Surgeoner said.

Free home energy audits – energy use analyses – would be available on the Internet, he said.

Customers will know of these programs through fliers in with their electric bills, separate mailings and local workshops.

As for kilowatt-hour cost comparisons between utilities, they can be found on the Web site of the Office of Consumer Advocate, Surgeoner said. That site is oca.state.pa.us.

By BERNIE HORNICK
The Tribune-Democrat

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The AE Generation Plan’s Latest Monkey Wrench

On Thursday (Jan. 28), City Council discusses Austin Energy’s 2020 generation plan proposal, hoping to establish the right mix of traditional and renewable energy resources to power Austin’s homes and businesses through the next decade. Despite nearly two years of deliberation on the plan – and support for AE’s proposal from the Electric Utility Commission, the Resource Management Com­mis­sion, and the Austin Generation Resource Planning Task Force – council is unlikely to be making any quick decisions. While the proposal fulfills Austin Climate Protection Plan goals, critics have charged it doesn’t go far enough, especially when it comes to phasing out coal; others have balked at the potential costs. As public debate has focused on balancing these issues, officials looking ahead to the next legislative session have hit upon yet another troubling concern: potential deregulation of Texas’ municipally owned utilities.

If publicly owned utilities such as AE were to some extent privatized and forced to compete in Texas’ energy market, the city of Austin could lose a substantial chunk of its income. (About 20% of the city’s money comes from utility fund transfers; it’s unclear whether deregulation would affect the entire AE amount or just a portion.) Rumors began circulating last fall that generation-plan skeptics might support deregulation efforts in 2011, in retaliation for passage of the plan, but supporters held their ground. “There certainly are always rumors about the industrials going to the Legislature asking for Austin to be deregulated,” said Public Citizen’s Tom “Smitty” Smith at the time. “And we fully expect they will, whether or not” AE takes a position favorable toward them, he added. Meanwhile, John Sutton of the Building Owners and Managers Association – a member of both the AE task force and the Coalition for Clean, Afford­able, Reliable Energy, one of the most vocal critics of the plan – says he knows of no such efforts. “That [deregulation] was one of the things that we [at CCARE] threw out there as a possibility,” said Sutton recently, referring to discussions last fall, “but it didn’t really go very far.”

City staff and council members couldn’t point to a specific person or group professing to support deregulation, but several said the possibility can’t be ignored. City Council Member Bill Spelman said such opposition has “largely been motivated by folks who don’t realize our costs are going to go up anyway.” Still, he said, there’s reason to believe that the Lege is watching Austin. Last week, Lt. Gov. David Dewhurst issued interim charges to the Senate Business and Commerce Committee to “study the generation costs of municipally owned electric utilities’ planned generation portfolios.”

“It doesn’t say, ‘Let’s talk about opening Austin up to competition.’ I think that’s what everybody’s reading into it, and I’m not even sure whether that’s appropriate. Maybe we shouldn’t be reading anything into it,” said Spelman. Nonetheless, he said, “I think we need to take it very seriously.”

While the generation plan remains on council’s regular Thursday agenda, the deregulation issue may stay behind closed doors for now, as council has also scheduled an executive session “to discuss or take action on a ‘competitive matter’ of Austin Energy.” The generation plan debate is likely to drag on for at least another month; city staff are planning a public forum on the plan for mid- to late February.

BY NORA ANKRUM

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PPL sees 18% of customers switch suppliers

Retail electrical choice is off to a fast start in PPL Electric territory.

Nearly a quarter million PPL Electric Utilities Corp. customers – 18 percent – had switched to alternative power suppliers as of Monday, the Allentown utility said.

And state officials expect that more PPL customers will sign up with discounted suppliers after they glimpse their bills, which reflect a 30 percent increase for power consumed after Jan. 1.

“When people see that high bill – especially if they’re a heating customer and it’s a high winter bill – that’s certainly going to arouse more interest in switching power suppliers,” said Pennsylvania Consumer Advocate Irwin A. “Sonny” Popowsky.

Caps on PPL’s rates came off Jan. 1, and the utility’s 2010 default rate, based on power purchased from 2007 to 2009, increased 30 percent.

But alternative suppliers, which can buy wholesale power at current market rates, are offering discounts of more than 10 percent off PPL’s current retail rates.

The Pennsylvania Public Utility Commission has certified eight alternative suppliers for PPL customers, including two that offer renewable power at a higher cost than PPL’s default rate of 10.45 cents per kilowatt hour.

According to the consumer advocate’s Web site – www.oca.state.pa.us – Gateway Energy Services Corp. is currently offering the best fixed-rate price for PPL customers: 9.35 cents per kilowatt hour for a 12-month contract.

A customer who uses 1,000 kilowatt hours a month would save $11 a month, “which I think is significant,” Popowsky said.

PPL Electric, which serves 1.2 million customers in eastern and central Pennsylvania, is encouraging customers to shop around because the utility does not lose money on customers who choose alternative suppliers.

Customers who choose an alternate supplier still get billed and serviced through PPL, which collects a standard fee for distributing the power through its lines.

Of 248,000 PPL customers who have switched, 205,000 are residential, said Ryan Hill, the utility’s spokesman.

Deregulation in PPL territory has more than doubled the number of Pennsylvania electrical customers who get power supplied by independent operators. Nearly 414,000 customers statewide are served by alternative suppliers, according to the consumer advocate.

Rate caps will remain in place in Peco Energy Co. territory through the end of 2010, when customers of the state’s largest utility are expected to get offers from alternative suppliers.

By Andrew Maykuth

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Contact staff writer Andrew Maykuth at 215-854-2947 or amaykuth@phillynews.com

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House lawmaker pushes power authority bill

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Who’s Who in the Texas Electricity Market

The following subjects will be addressed and clarified to help all Texans better understand the nature of the Texas electricity market:

* The Public Utility Commission of Texas and it’s role in protecting your electricity rights, in addition to specific responsibilities and regulations therein.

* The role of the Retail Electric Provider (REP).

* Transmission and distribution of electricity and its relationship to the power generators, REPs and the consumer.

* Power generators and their role in producing electricity and placing it on the grid.

* The Electricity Reliability Council of Texas and it’s role in the management of Texas electricity.

Each section will detail the important players, their responsibilities in the Texas electricity market and how each affects the energy bottom line for Texas businesses and consumers.

The Public Utility Commission of Texas (PUCT)

What is the PUCT?

The Public Utility Commission of Texas (PUCT) is a local state agency responsible for the regulation of electric and telecommunications services. Its primary mission is to ensure consumer protections are in place, foster healthy competition and promote high quality and safe energy and telecommunication infrastructures.

In addition to operating a consumer information hot line, The PUCT also regulates rates and services of all investor-owned electric and local telephone companies, sets and maintains ongoing standards of service for regulated electric companies, and issues statewide franchises for cable TV and video services.

Here is a list of the consumer services that the PUCT does have authority to regulate:

* Long distance
* Wireless telecommunications service
* Gas
* Water
* Cable TV rates and content
* Rates established by municipal electric utilities
* Rates established by electric cooperatives
* Internet
* ISDN

What Role does the PUCT Play in Texas Electricity Service?

The PUCT is vitally important in the deregulated electricity market in Texas. Though it’s swiftly becoming more common knowledge that Texas is a mostly deregulated state for electricity, the mere fact that Texans do have the power to choose their electric provider is often lost in the fray of misinformation.

The PUCT is quite simply a consumer advocate for choice in the Texas electricity market. The PUCT is primarily responsible for regulating rates and terms of service for both transmission and distribution in Texas’ deregulated areas, oversight of the ERCOT market, managing renewable energy resources, ensuring consumer protections for retail electric service and more.

What the PUCT does not do is endorse particular electricity providers over another, which helps to foster competition and protect consumer rights that would not survive otherwise.

The PUCT and ERCOT

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to 22 million Texas customers, managing a grid that carries more than 85 percent of the state’s electric load. ERCOT monitors and maintains nearly 40,000 miles of transmission line across 75 percent of Texas, amounting to a large portion of the state’s deregulated electricity areas.

The PUCT specifically provides oversight of ERCOT, ensuring that all market rules are thoroughly reviewed at the behest of public interests. ERCOT actually monitors system reliability as well, so when you think of the vast majority of the deregulated market in Texas, think ERCOT and it’s friendly PUCT neighbor.

The PUCT and Texas Electric Choice

The PUCT operates the Texas Electric Choice Web site that is devoted to providing information for consumers looking to switch electricity providers. The site details the benefits of switching, what Texas electric choice means to the consumer, PUCT regulated terms of service and consumer protections, general information about electricity deregulation in Texas and more.

The PUCT and Texas Electric Choice, or powertochoose.org, specifically provides electricity consumers with:

* Details about electric choice including the basics of the retail electric market in Texas, electricity generation, the transmission and delivery of electricity and how that is maintained, and the general safety and reliability of electricity service in Texas markets.
* General information about the PUCT and a link to their site.
* The process of switching electricity providers.
* Introduction to energy conservation, efficiency and general money saving tips.
* Questions to ask potential electricity providers.
* Understanding the choices consumers have when comparing providers.
* Offer information from Texas Retail Electric Providers (REPs)

Sources

“PUCT”: http://www.puc.state.tx.us/ocp/complaints/regulate.cfm

“ERCOT”: http://www.ercot.com/about/

“Power to Choose”: http://powertochoose.org/index.asp

The Role of the REP in Texas

There is a lot of confusion surrounding exactly how the electricity market works in the deregulated areas of Texas. Despite the fact that areas of the Texas electricity market have been deregulated for almost a decade, some people don’t really understand who the different players are in the Texas marketplace and the extent of their roles and responsibilities. However, the most forward facing and well-known players in the Texas electricity market are without a doubt the Retail Electricity Providers (REPs).

What is an REP?

REPs are common and well-recognized companies that provide you with the billing and customer service aspects of your electricity service. Reliant, TXU, Bounce Energy and Gexa are a few example of Texas electricity providers, or REPs. The biggest reason that these are the most known entities in the Texas energy market is the simple fact that the REP sends you a bill every month, in addition to handling turn on and turn off of service. First on their list of priorities and responsibilities is the customer relationship.

A Texas REP competes for your business by offering a a variety of rate plans, incentives and specials for new customers, renewable energy options and more.

What Exactly does an REP provide?

The life cycle of REP to customer goes something like this:

Customers call up an REP like Bounce Energy or Reliant, and place an order for electricity service. The REP on the other end is then responsible for logging that order with the local TDSP (Transmission/Distribution Service Provider) and ensuring that electricity service will be turned on and ready at the specified date on the order. Once the service is turned on, it is the responsibility of the REP to monitor and bill a customer for their electricity usage and collect the outstanding debt. By the same token, when something goes wrong with a customer’s electricity service or there are any outstanding questions, it’s the REP’s role to field those calls and work with the customer to find the most satisfactory resolution possible.

So, to sum up, an REP is responsible for all of the customer-facing responsibilities in the Texas electricity market, from making sure the lights get turned on (and stay on) to billing the customer and providing customer service.

What Makes a Texas REP Unique?

So now that we understand at a basic level what a Retail Electricity Provider does, we should next take a look at what separates one REP from another as far as the customer is concerned. What separates each company is an illustration of one of the reasons the Texas electricity market was deregulated to begin with: Service.

The creation of competition in Texas forces companies to work harder to bring value to their customers in order to retain and attract new business. The most obvious value to a customer is lower prices, and at the end of the day, it’s obviously the most important. Competition in the market place forces companies to try and be as efficient as possible to keep their electric rates as close as possible to the market basement.

At the same time, there are other things that a good REP can offer to their customers. Excellent customer service and having a knowledgeable staff that can answer questions is a highly valued asset to an REP. One of the most common customer complaints among customers is waiting too long on hold or getting the run around from customer service and billing departments. Differentiating or weeding through the good versus the bad when choosing an electricity provider is an advantage that Texans in deregulated areas have.

REP’s in competitive areas usually offer versatile energy plans, such as low variable or fixed rates, or the chance for customers to order Green energy plans in order to entice new customers to sign up for service. Certain providers also offer incentives to their customers, like rebates, bill credits, airline miles and more.

The competition that is created by the deregulation of the Texas electricity market forces the different REPs to work as hard and as efficiently as possible to try and stay competitive with other companies in their marketplace. And since the REPs are responsible for the customer relationship in the Texas marketplace, that competition forces the REPs to offer the best rates, service, and overall value to the customers to make sure they keep their customer base as well as attract new. And at the end of the day, this benefits the customer, because not only do they have a number of options to find the best company for themselves, but the checks and balances created by the presence of competition helps keep the REPs honest.

The Role of the TDSP In Texas

TDSP stands for Transmission/Distribution Service Provider. That probably doesn’t mean all that much to the average Texan, although I’d wager it’s only the term that is unfamiliar, and not actually the companies themselves. But first, let’s take a quick look at what a TDSP is exactly, and what their role is in energy service after Texas became deregulated.

History of the TDSP in Texas Electricity

When the state of Texas deregulated, it forced the incumbent companies (like Reliant, TXU, etc) to break up into different pieces. Before the electric companies provided full scale electricity service, which included maintenance of the electricity infrastructure and getting electricity from the plants to the customers, from start to finish (with a few exceptions). When the state of Texas deregulated, that practice made way for individual Retail Electricity Providers (REPs). At this point, it became a conflict of interest for the already existing former Incumbents to retain ownership of their own Transmission and Distribution systems, as it would create an obvious competitive advantage for the bigger and already established companies.

At the same time, it was also illogical and unreasonable to expect smaller and newly created REP’s to have to build and create their own infrastructure for delivering electricity to their customers. One, it would create excessive redundancy that would be expensive and serve no purpose, and two, the amount of money it would take to construct an infrastructure from scratch would act as immediate barriers of entry for new companies, defeating the entire purpose of deregulation in the first place.

The Difference between a TDSP and the REP

The TDSP, as already mentioned, maintain the infrastructure for electricity transmission or distribution. The names you probably recognize include Centerpoint (split from Reliant), Oncor (Splint from TXU) Texas New Mexico Power Company, AEP North, and AEP Central. These are the TDSPs who own the power lines and come out to repair them when they go down. They’re also responsible for transmitting the electricity over those lines from the power generators and into a customer’s home. The electricity they own they sell to the REPs wholesale, and they also charge the REP’s monthly charges for the upkeep of the infrastructure.

So that is a quick overview of how the TDSPs work in the state of Texas. To use a metaphor that helps make the understanding easier, the TDSPs are like the guys who ship in all the popcorn, hot dogs, sodas and pretzels to the ballparks, which customers then walk up to counters and purchase at the concession stands. They essentially “stock the shelves” for the customers.

Power Generators in Texas Electricity

Being the leading crude-oil producing state in the U.S., Texas plays a vital role in the country’s overall energy capacity. Texas not only provides a quarter of the nation’s refining capacity with nearly 5 million barrels of oil processed per day, but also accounts for a quarter of total natural gas production as the nation’s leading producer.

So it goes without saying that power generation companies are not few and far between in the Lone Star State.

What is a Texas Power Generator?

Power generators or power generation companies use natural gas, coal, wind, nuclear, biomass and hydro to produce the power that Texas businesses, residents and commercial facilities count on. Power generation companies own and operate the power plants responsible for producing energy sold on the wholesale market to Retail Electric Providers in Texas, who of course turn around and package it for the consumer.

Texas power generation companies are responsible for a vast portion of the country’s energy capacity, with Texas specifically the leader in wind energy development throughout the entire U.S.

Major Texas Power Generators

There are of course numerous power generators in Texas and several subsidiaries that are responsible for generating the power placed on the grid and transmitted to homes and businesses across the state.

Here are the major players in Texas power generation:

“Luminant”: http://www.luminant.com/about/default.aspx

Luminant is a subsidiary of Energy Future Holdings (EFH), formerly TXU Corp., and generates more than 16,100 megawatts (MW) of energy in Texas, including 2,300 MW of nuclear and 5,800 MW of capacity generated from coal. Luminant also happens to be the largest purchaser of clean electricity generated from wind in Texas and fifth largest in the United States.

“NRG Energy, Inc.”: http://www.nrgenergy.com/index.htm

Founded in 1989, NRG currently has a capacity of more than 24,000 MW across the globe, including nearly 11,000 MW in Texas. NRG also has full or part ownership in 44 power generation plants.

“Suez Energy”: http://www.suezenergyna.com/ourcompanies/energygen.shtml

Suez Energy Generation is located in the heart of energy land in Houston, Texas. Suez owns and operates 72 power, cogeneration, steam, and chilled-water facilities, with a total power capacity of more than 7,750 MW. Suez power generation facilities use various fuels to produce electricity, including renewable resources.

“Shell”: http://www.shell.com

Providing the world’s first commercial gas liquification plant in 1964, Shell is one of the largest energy producers in the world, active in everything from gas-to-liquids, wind and solar energy to coal gasification technology. In addition to providing gasoline for automobiles across the country, Shell is also heavily involved in building and operating natural gas pipelines, and developing wind and solar technology.

Power generation companies are essentially the first line of a long conveyor belt that serves the Texas electricity market from generation to home and business. As the means to improve infrastructure and add additional power plants becomes available, Texas is generally at the front of the pack when it comes to producing energy in new, more ecological, efficient and abundant ways.

The Role of ERCOT in Texas

ERCOT is otherwise known as The Electricity Reliability Council of Texas. ERCOT may not affect you directly, but through its actions helps insure you safe reliable electricity for your home.

What is ERCOT?

The Electricity Council of Texas (ERCOT) is a nonprofit corporation entity under NERC/FERC, which manages the flow of electricity and power to over 22 million Texas electricity consumers. ERCOT schedules power to an electric grid that covers over 38,000 miles of Texas Electricity Transmission, equivalent to 85% of the state’s electric load. ERCOT manages 75% of the deregulated electricity market in the state. ERCOT also oversees financial settlements for the wholesale bulk-power market in Texas as well as customer switching for more than 6.5 million Texans in deregulated areas.

What Role does ERCOT play in Texas Electricity Market?

The Electricity Reliability Council of Texas (ERCOT) is overseen and regulated by The Public Utility Commission of Texas (PUCT). The PUCT aids in ERCOT performing its role in the Texas electricity market by helping manage the power grid and ensuring that market rules are in place to protect consumers.

One of ERCOT’s major roles in the Texas Electricity Market is to ensure that consumers have reliable electric service. ERCOT performs this role by constantly monitoring and analyzing all power grid components every 2-4 seconds for status updates. ERCOT also directs the flow of electricity in conjunction with your local Transmission and Distribution Service Provider (TDSP) so you can have safe and reliable energy.

ERCOT also plays a huge role in the deregulated Texas Electricity Market. Now that people in Texas have the power to choose their own Retail Electric Provider (REP), ERCOT’s role is to help facilitate retail registration of energy and also help the switching process fpr Texas electricity companies and their customers.

Market Process and Participants

Although ERCOT is managed and regulated by the PUCT, it is not the key reason why ERCOT is able to fulfill its roles in the Texas Electricity Market. There are four major entities that help ERCOT perform its three processes in Texas: Qualified Scheduling Entities (QSE), Resource Entities (REs), Load Serving Entities (LSE), and the Transmission and Distribution Service Providers (TDSPs).

Market Operations:

Qualified Scheduling Entities (QSE) is the key part of the market operations of ERCOTs process. QSE submits daily schedules for their bilateral transactions with total generations and demand. QSEs also place bids for ancillary service and settle financial payments with ERCOT.

Power Operations:

Resource Entities are facilities that are represented by a QSE that has been approved and capable of providing energy. Resource Entities either own or manage a generation resource or has the option to act as a Load Acting as a Resource (LaaR) that correlates with ERCOT instructions to lower electricity usage or provide ancillary service.

The Transmission and Distribution Service Providers (TDSPs) transmit and delivers the electricity to a customer’s home or business along the poles and wires. This company is responsible for maintenance and repair of these poles wires.

Commercial Operations:

Load Serving Entities (LSE) provides electrical service to retail and wholesale customers. LSE includes competitive retailers that sell electricity in Texas in a competitive market.

The Texas Electricity Market in 2009

Deregulation provides not only unique benefits to the Texas electricity consumer, but also unique structural and logistical needs in order to ensure that electricity service across the state remains safe and reliable. Moving forward into 2009, the continued growth of deregulation in the Texas electricity market only serves to increase competition and foster more opportunity for affordable and reliable electric service.

Each of the players in the Texas electricity market detailed above are essential cogs in the wheel that ensure energy is generated in an efficient and cost-effective manner, that the wholesale and retail markets are maintained with consumer protection and good business practice in mind, and that ultimately the electricity reaches its final destination in a safe and ongoing, reliable manner.

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Seminar at Wilson College in Chambersburg to cover saving energy

Wilson College will host a seminar offering energy saving ideas to homeowners.

“Energy and You” will be presented from 8 a.m. to 3:30 p.m. Feb. 13 in the newly constructed Science, Math and Technology Center, which is expected to be the first building in Franklin County to qualify for Leadership in Energy and Environmental Design (LEED ).

J. Michael Love, president and CEO of the Energy Association of Pennsylvania, will speak about deregulation of energy in Pennsylvania in 2010. The association represents the interests of regulated electric and natural gas distribution companies in the state.

There will be six break-out sessions: geothermal home energy, landscaping, interior design, green remodeling and solar. The Cumberland Valley Animal Shelter, another potential LEED building, will have a presentation.

More than 15 vendors will exhibit products and information.

The $25 fee includes lunch. For more information check http://www.wilson.edu.

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Power bills cast shadow on February

After a frigid December, at least some PPL customers were surprised by bigger-than-usual energy bills.

What happens in February, when the full impact of Pennsylvania energy deregulation shows up on your statement?

Switch suppliers to lessen the shock, those in the industry urge.

Apparently, a lot of consumers have been doing just that.

Calls from the public began surging last fall when competitors started shopping around offers, said PPL Electric Utilities spokesman Ryan Hill.

Recently, the company has been extending call center hours on some weekdays and Saturdays, when the center wouldn’t normally be open.

But very few people are phoning to complain, according to Hill, who said the additional hours are not set and are based on call volumes on any given day. Most callers are seeking information about energy choice.

“We got a lot of folks wanting to know ‘Are these offers legitimate?’ “

They are.

Some 27,000 customers in PPL’s area had selected alternative electricity suppliers by early December, according to Hill.

About 223,000 people had switched as of last week.

Spokeswoman Jennifer Kocher reported a “definite increase” in calls to the Pennsylvania Public Utility Commission — 445 in November versus 2,350 in December — though no gripes about rates.

PPL rate caps were lifted Jan. 1. Energy costs will rise as much as 30 percent for the utility’s residential customers. Those who switch energy suppliers will see a smaller spike.

Your energy bill is calculated monthly based on remote readings. Billing periods vary depending where you live.

Bills sent out in early January reflect a mix of old and new electricity rates, Hill said.

However, the full effect of the changes will materialize in most people’s statements in February, said Dan Donovan, spokesman for Dominion Energy Solutions, the first supplier to compete in PPL territory.

“You haven’t seen them yet,” Donovan said. Dominion’s competitive pricing structure started Jan. 1; the company says it’s charging 10 percent less than PPL for the electricity it generates.

Virtually everybody will be paying more for electricity, leading to no small measure of apprehension.

Mused Dave Buckwalter, a Realtor in Lititz: “I haven’t really seen a big spike in my rate as of the last bill. I don’t know what to expect for the next one.”

A PPL call center operator said two weeks ago that many people had phoned in this month to ask about surprisingly high electric bills.

Hill said some people might have gotten larger bills in December because the weather was frostier than usual and more electricity was used.

According to the Millersville University Weather Information Center, the average temperature last month was almost 2½ degrees lower than it was in December 2008.

“We’re running colder than the past 10-year average” in PPL’s 29-county coverage area, Hill said.

Holiday season bills also could have been higher because people were entertaining or powering up Christmas decorations, Hill added.

In 2010, he said, bills will continue to originate with PPL. The utility will continue to own the lines that transmit electricity from the power plant to your home.

Residential customers can expect to see some changes on their statements, Hill noted.

The generation portion will be pricier, thanks to rate cap expiration and the return to market-based energy costs.

The generation charge will now be a flat rate expressed in cents per kilowatt/hour. The charge previously was tiered, based on the amount of electricity consumed.

The transition charge, which allowed PPL to recover part of the cost of its power plant investments during the regulated era, will disappear.

Consumers also will be billed a couple of dollars or so a month to help support a state-mandated PPL energy-efficiency program. The utility will give rebates to qualifying customers who purchase certain Energy Star appliances, among other measures.

That doesn’t make William A. Wentling, an electrical underwriter in Lititz, particularly happy. Giving rebates “makes them look good” while the customers themselves help pay for the program, he said.

Kocher said Act 129, the 2008 law that requires utilities to try to cut demand on the grid, allows them to recover some of the costs of the efficiency measures.

Most people won’t see that charge on their power bills until next month, she said.

In the meantime, Kocher said, PUC officials are pleased that the energy choice program appears to be taking off.

The commission has been working to dispel rumors that there’s a deadline to change companies, said Kocher, who encouraged people with questions to call the PUC toll free at 800-692-7380.

“So far, we’ve had some good reports on the companies” and feedback from people saying it’s been easy to switch, Kocher added.

Donovan said he expects the pace to pick up.

“We usually see the most people switch when they get that first bill,” he said. “They’re saying, ‘I’ve gotta do something about that.’ “

 

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By JON RUTTER, Staff Writer.  Jon Rutter is a staff writer for the Sunday News. His e-mail address is jrutter@lnpnews.com.

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Consumers Can Save On Electric Bill

Many People Unaware Of Money That Can Be Saved

 

HARTFORD, Conn. — Many consumers could be saving almost 10 percent on electricity bills by barely lifting a finger and on Friday, state leaders wanted to draw attention to that fact, and encourage more people to take advantage of the retail competition in Connecticut.

The savings are the result of deregulation of the electricity industry passed by the Legislature a decade ago. Sadly, two leading state senators said thousands of customers have been leaving money on the table.Trumpf Incorporated is making big advances in the laser metal fabrication machines that it builds.One reason Trumpf is staying in Connecticut is the savings gained by switching from its traditional electric provider and going with a different supplier. That is something that residential customers can do easily by going to the CT Energy Info Web site. That is something leading legislators are urging people to do, because while most of Connecticut’s large manufactures have done this, less than 25 percent of residential customers have.Rep. Donald Williams said, “Families and businesses want to know, ‘How can we save money, now?’ This is a way people can save 10 percent, right now.”Still, this is a 10 percent savings in a state that, according to the U.S. Energy Information Association, has the highest electric rates in the continental United States.Rep. John Fonfara believes a number of items on the horizon could help reduce out energy bills including the introduction of smart meters, which would help homeowners better manage their power usage.

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No cheap energy solution!

The state’s House minority leader wants to help ratepayers who are hurting. That’s commendable, but he needs to find a practical way.

Jan. 14–Ward Armstrong’s constituents are desperately seeking relief from repeated Appalachian Power rate increases, and he is desperately seeking a way to give it to them.

The House minority leader and delegate from Henry County says he has heard pleas from so many people at rate hearings and town hall meetings throughout his rural district that he must do something.

If, by something, he means something fair and responsible, likely to pass legal muster and win approval in the General Assembly, we’d like to hear it.

Instead, Democrat Armstrong proposes to take his district — and any other served by Appalachian Power — back to kinder, gentler days for consumers. The days before 1999, when state lawmakers tried their hand, unsuccessfully, at electric deregulation.

By 2007, after competition failed to materialize, legislators were forced to back away. Reregulation, though, has been kinder to the industry than to customers under a different framework that allows utilities higher earnings.

If that needs a second look, it should be a look that extends to all electric utilities in the state.

Armstrong proposes to return only Appalachian Power to the old regulatory model to avoid running headlong into Virginia Dominion Power, the Richmond-based energy giant with legendary influence in the state capital.

Appalachian, no less than Dominion, says it must have a rate of return high enough to attract the capital needed to expand generating capacity in order to meet future needs.

Appalachian customers also are being hit by an adjustment in rates held low for years while the company skirted federal air quality standards. Eventually, the utility was forced to install expensive pollution controls.

Customers are paying for recovering those costs, as well as fuel factor adjustments.

All of this has come together at a particularly cruel time.

It’s a cold winter. The economy in Armstrong’s Southside district has been at least as harsh, not just this season but for years. People’s incomes have stagnated or gone down. Their bills for electricity — a basic necessity — keep going up.

They need help. Armstrong will have to look harder for a solution.

The good old days of cheap energy? Those days are gone.

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The Roanoke Times, Va.

Technorati Tags: electricity deregulation, Virginia

Armstrong bemoans utility rate increases

He said he will introduce a bill to limit Appalachian Power’s ability to raise rates.

RICHMOND — With his constituents up in arms over skyrocketing electric bills, Del. Ward Armstrong, D-Henry County, wants to turn back the clock and put Appalachian Power Co. under different rules than those applied to other Virginia utilities.

Armstrong, the House minority leader, said Monday he will file legislation to return Appalachian to a cost-of-service regulatory model that existed before Virginia began deregulating utilities in 1999, a move that could limit the company’s ability to raise rates.

Armstrong said he was moved by concerns he heard from constituents during his re-election campaign, that some “are very much struggling trying to meet the basic needs of life.” He said electricity rates were the dominant topic of a town hall meeting he held over the weekend in Carroll County.

“It has reached such proportions that I cannot, as the representative of the 10th House District and my region of the state, not do something about it,” Armstrong said.

Armstrong bemoaned the succession of rate increases Appalachian has requested since 2005, including a 12.8 percent interim base rate increase that took effect in December but remains subject to approval by the State Corporation Commission. He organized a bus trip to take opponents to Rocky Mount for a November SCC hearing on the rate increase.

Virginia began moving toward deregulation of utilities in 1999 but abandoned it in 2007 after competition failed to materialize. The General Assembly approved a “hybrid” regulatory scheme that gives the SCC some discretion in setting rates but also permits utilities earnings that will keep them competitive and enable them to expand generating capacity.

Armstrong’s proposed regulatory change would not apply to other Virginia power companies, such as Richmond-based energy giant Virginia Dominion Power. Armstrong acknowledged that politics played a role in that decision.

“For whatever reason, we’ve not experienced the kind of rate increases coming out of Dominion and other utilities as we’ve seen from AEP,” Armstrong said. “I’m also mindful of the fact that Dominion Power’s strenuous opposition to a bill makes it very, very difficult to pass.”

But Armstrong’s bill likely will face strenuous opposition from Appalachian. Company spokesman Todd Burns said the utility “would have concerns with legislation that would limit our abilities to recover our expenses from our customers.”

Burns said the “vast majority” of Appalachian’s rate increases have been fuel factor changes, and most of the others have been to cover environmental compliance costs.

Burns said the pre-1999 regulatory structure makes it more difficult for utilities to recover costs associated with building new infrastructure.

“In the long run, for our customers’ benefit, we need to be able to make the investments in infrastructure that they need, as well as comply with environmental mandates,” Burns said. “We are still a cost-of-service-based company.”

Burns said the company understands customers’ concerns about rate increases and has options available to those who have difficulty paying their bills.

Armstrong’s legislation also would prohibit any utilities from billing customers for rate increases before the SCC approves them. And he wants utilities to offer economic incentives to businesses seeking to locate or expand in Virginia.

By Michael Sluss
  ( 804 ) 239-8337

Technorati Tags: electricity deregulation virginia