Yet for some reason, the end of electricity rate caps in Pennsylvania was predicted to be the apocalypse for businesses. But Jan. 1, 2010, came and went, and doomsday never arrived.

In fact, Pennsylvania has a good story to tell when you look back at the first quarter of electric competition in the PPL Corp. service area and look ahead to the opening of the Allegheny/West Penn market locally in 2011.

No less than 27 power providers are competing to serve residents, businesses, schools, universities, hospitals and units of local government where PPL used to have sole purview — and such competition can mean lower rates for customers. As a result, in only three months, 363,000 residential users opted for a new company to deliver their electric needs.

PPL estimates that 55 percent of large industrial users have taken advantage of the competitive marketplace and switched to other suppliers, as well. As important, this doesn’t include the businesses that have weighed their options and exercised their choice to stay with PPL.

After only one quarter in an open electricity market, it’s already clear the entrepreneurial spirit of Pennsylvania is alive and well. Businesses, universities and local governments are making smart decisions that not only help their bottom line, but that also provide stability across several industry sectors during an uncertain time in our national economy.

That level of performance reveals how Pennsylvania is well on its way to having one of the most successful competitive markets in the nation.

States from Texas to New York have opened their electric markets to retail competition but none had shown such immediate and dramatic results. Pennsylvania’s numbers will continue to grow as more businesses and other customers explore an open and competitive market — and as new marketplaces open on Jan. 1 for customers in areas serviced by Allegheny Power, Metropolitan Edison, PECO and Penelec.

While it’s early to forecast savings for Pennsylvania’s electricity customers, we can look to the experience of states like Illinois that have had competitive electricity markets for more than a decade. Over that period it is estimated that retail customers saved in excess of $1 billion. Pennsylvania has made the right decision for the long term.

Competition also has bred the development of new products and services not typically found in closed, monopoly-regulated markets. Today’s market opens the door to new possibilities for businesses to embrace environmentally friendly and cost-effective alternative energy sources such as wind or solar energy.

For example, the Harrisburg Regional Chamber and Capital Region Economic Development Corp. did something many would have thought impossible a few short years ago; it purchased wind energy certificates to power its Business Expo.

New energy companies in the PPL market also are challenging each other on new technological fronts to provide savings for their customers. Businesses no longer have to wait for monthly electric bills to set energy budgets; they can monitor their energy usage on more frequent intervals. This gives businesses the opportunity to plan ahead as to how they use energy, depending on what it costs at any given time.

Energy companies vying for business in a competitive, open marketplace foster innovation and new technology. In time, as customers become more sophisticated in exploiting the power of competition, they will demand greater innovation and specialized services from electric suppliers, and new products and services will be developed that provide greater control over energy usage and how that energy is generated.

The development of competition helps families and businesses control energy costs and allow units of government to preserve ever-shrinking resources. Such possibilities would never have developed under the old regulatory system.

Pennsylvania policy makers have developed a well-structured environment for competition to flourish — which will bring many benefits to Pennsylvanians for years to come.

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Champion Energy is entering the PPL residential market with guaranteed savings and 100 percent renewable wind energy plans, the details of which are available at www.PAPowerSwitch.com, Pennsylvania’s state-sponsored consumer electricity shopping site. Consumers who select the Guaranteed Savings Champ product will receive a guaranteed savings off the PPL default rate through their December 2010 meter reads and can choose from a standard plan or a 100 percent wind energy plan. Customers can also take advantage of both standard and 100 percent renewable electricity plans with a 12-month contract term, which provides price security for one year while also supporting renewable electricity generation.

“Champion Energy’s focus on providing value to our customers is reflected in the campaigns we have created and the simplicity we offer in making the switch,” said Fordham. “In a matter of minutes, consumers can visit our web site, compare the rates of the incumbent providers on their current bills to Champion Energy’s exceptional rates, and then make the switch in four simple steps.”

While Pennsylvania’s deregulation of electricity allows consumers to select the Electricity Generation Supplier of their choice, the transmission and distribution of electricity remains regulated, and the incumbents — PPL Electric Utilities, PECO, Penn Power, Duquesne, Met Ed/Penelec — continue to distribute electricity, deliver default electricity services and provide customer service. These local utility companies are also responsible for providing line maintenance and repair, restoring service after outages and providing customer metering and billing services.

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Under the plan, customers will pay less for electricity consumed during low-demand times — such as evenings and mornings — but pay more for electricity consumed during peak-demand hours.

“It’s about giving the customer more choices,” said PPL spokesman Ryan Hill.

Prices PPL charges its customers went up about 30 percent this year as part of electric deregulation approved by the Pennsylvania Public Utility Commission. Other companies are freely competing for new customers in the PPL service territory, which includes most of Monroe County.

Current PPL customers might reduce costs by opting for the time-of-use program, Hill said, but are still likely to reduce costs even more by selecting one of the competing providers.

“It’s not meant to compete with offers from competitive suppliers,” Hill said.

Competitors’ offers are for the cost of electricity, plus the cost those competitors pay to PPL to transmit that energy through PPL lines, and taxes. It is the so-called “rate to compare” cited in PPL customer mailings prior to deregulation on Jan. 1.

PPL is moving away from the business of supplying electricity while focusing its core efforts on operating the transmission system. Those who choose competitive suppliers will continue to receive a single bill from PPL that includes all charges.

For remaining PPL residential customers, the “price to compare” they currently pay is 10.445 cents per kilowatt hour. If those customers opt to join the time-of-use program, the “anticipated” off-peak non-summer use cost would be less — 10.157 per kWh — but on-peak use would be more — 13.709 per kWh.

To save money compared to PPL’s standard rate, customers would have to use considerably more power during off-peak hours than at on-peak hours. The good news is that only two hours each day — 5 p.m. to 7 p.m. — are considered peak hours between Jan. 1 and May 31, or October through December.

During the summer period — June through September — peak demand (and peak cost) hours are 1 p.m. through 6 p.m. Off-peak summer charge is 9.354 and the on-peak charge is 15.694.

PPL’s Web site provides an interactive energy calculator that consumers can use to see if the time-of-day program would save money.

“They can see where their energy dollars are going,” Hill said. “They can receive tips on how to save based on what they tell us about their home.”

Go to www.pplelectric.com/e-power.

Barrett-Paradise Friendly Library is hosting a PPL program today on energy-saving tips in the library’s community room at 1 p.m. Call the library at (570) 595-7171 to reserve a seat.

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If that happens and the House approves the Senate bill, the compromise legislation is expected to go to Gov. Bob McDonnell next week, officials said. Del. Ward Armstrong, D-Collinsville, and House minority leader, said he has not talked with the governor, but he can’t imagine that McDonnell would not sign the bill. If he does, the legislation would go into effect immediately because it contains an emergency clause, officials said. Also, a bill introduced by Armstrong to return Appalachian to regulations in place in the late 1990s before deregulation was approved 7-4 by a House subcommittee Tuesday. That bill is scheduled to go before the House Committee on Commerce and Labor today, according to Armstrong and the General Assembly Web site. “As we speak,” Armstrong said late Wednesday afternoon, Appalachian Power “and their legion of lobbyists are pounding the halls of the General Assembly trying to kill my bill.” That indicates to Armstrong that the bill is “on the right track” and that “it’s going to be a tough fight to get this through committee.” The Senate bill to suspend Appalachian Power’s interim rate increase evolved from one originally introduced by Sen. Phillip P. Puckett, D-38th District. Puckett said he originally proposed a bill similar to one filed by Sen. Roscoe Reynolds, D-Ridgeway, to return Appalachian to regulations that existed before deregulation. The current bill, which a Senate committee substituted for Puckett’s original bill, was the result of a compromise between some legislators and Appalachian Power, Puckett said. “I agreed to have my bill changed to lift interim rates to give immediate relief to Appalachian Power customers,” he said. Under the House and Senate bills, Appalachian would suspend the interim rate increase until the SCC makes a ruling by July 15, “for rates to become effective for bills rendered on and after” Aug. 1. Puckett said that in the meantime he hopes to carry on negotiations with Appalachian Power to try to get rates that are fair to the company and customers and that allow the company to get a fair rate of return. He doesn’t think the rates are fair now, he said. Wednesday, Armstrong expressed concern that “last week (Appalachian Power) said they had reached an agreement with a number of legislators that in return for rolling back the interim rate increase that all other pieces of legislation would be defeated. The first inquiry I had was who made this deal? No deal was made with me. Moreover, why do we need to make a deal with” Appalachian that is not in the best interest of the public. Armstrong added that he is does not object to the lifting of the interim rate increase — “that’s a good thing — but it’s limited.” Armstrong said he has been told by the SCC that a customer using 1,000 kilowatt-hours a month would save about $12 a month if the interim increase was lifted. In his district, families use an average of about 1,200 kwh a month, which would be a $15 a month reduction. If the suspension of the interim rate increase is approved, it would last “maybe four or five months, and that’s all. I’ve characterized that as a good first step. By no means is that all we should be doing.” “We need to have regulatory reform regarding Appalachian. The only thing I know we can do quickly is go back to” the regulation that was in effect before deregulation, he said. Those regulations were in place for many years when Appalachian did not seek rate increases, he said. Another bill of Armstrong’s that is scheduled to come before a House committee today would consolidate, “or bundle,” Appalachian’s rate increase requests, he said. He added that in theory would result in lower increases. Todd Burns, corporate communications manager for Appalachian Power, said the company would like the interim-rate compromise bill that it worked out with most legislators in Appalachian’s service area to move forward. “It would provide immediate benefits for customers,” and he hopes it moves quickly, he said. Of Armstrong’s bill to return Appalachian to regulations in place before deregulation, Burns said, “we hope it goes nowhere. The bill would return Appalachian to a style of regulation that the General Assembly thought was outdated years ago.” He has said that much of the recent increase in electric bills is because of customers using more power because of prolonged cold weather.

By PAUL COLLINS

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The county held an electricity auction in mid-January to secure a better price for the 2.7 million kilowatt hours the county uses annually. Champion Energy was selected over eight competitors for the county’s 23-month fixed-price contract, effective February 1, 2010, which encompasses a ten percent green energy component.

Carbon County embarked on an auction scenario as a result of deregulation and electric rate hikes that took effect on January 1, 2010. In a deregulated environment, the county would have been paying PPL Electric approximately 30 percent more for its electricity during calendar year 2010.

Jason R. Ulshafer, principal of GreenPointe. Energy of Berwyn, Pa., hired by the county to execute the auction, confirmed that the switch to Champion Energy Services will save the county a significant amount of money on its electricity bill in 2010.

About Champion Energy Services

www.championenergyservices.com

Houston-based Champion Energy Services ranks among the top retail electric providers in the United States. Champion Energy currently serves residential, commercial and industrial customers in deregulated electric energy markets in Texas, Illinois and Pennsylvania and is slated to enter the Ohio market in 2010. The company serves 350,000 residential customer equivalents, with a peak load near 1,000 Megawatts. Champion Energy is backed by the financial strength of Texas-based Crane Capital. PUCT No. 10098.

SOURCE Champion Energy Services

RELATED LINKS
http://www.championenergyservices.com

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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

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

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HARRISBURG – A veteran House lawmaker is renewing a push for a bill to give the state a greater role in stabilizing electric rates and building new power plants.

The House Environmental Resources and Energy Committee will hold a hearing Wednesday on legislation to create a Pennsylvania Power Authority to buy power directly from wholesale suppliers under long-term contracts with the aim of securing cheaper prices.

The authority would sell this power to utilities. Ratepayers would benefit because the cost of electricity would be less susceptible to short-term price fluctuations in the wholesale market, proponents said.

“By creating a consumer-driven public power agency, Pennsylvania would free itself from the yoke of a broken wholesale power market condemning us to double-digit rate increases,” said Rep. Camille George, D-74, Houtzdale, the committee chairman and bill sponsor.

The authority also would finance construction or expansion of electric generating plants through direct investment or by providing low-interest loans.

Utilities have not built new generating plants in Pennsylvania during the past decade even though that was touted as a benefit of the state’s electric deregulation law, said George. Under the bill, the authority would consist of five members representing consumers, business, industry and agriculture.

George considers his legislation an alternative to the 30-percent electric rate hike for PPL residential customers that took effect Jan. 1 after decade-long rate caps were lifted.

by robert swift (harrisburg bureau chief rswift@republicanherald.com)

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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.’ “

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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