Chamber speaker: Changes on the horizon for your electric bill

ROYERSFORD — “You’d better shop around.” Commissioner Robert F. Powelson with the Pennsylvania Public Utility Commission echoed the words made popular years ago by Smokey Robinson & The Miracles when discussing the upcoming expiration of electricity rate caps.

In a little more than a year’s time, on Jan. 1, 2011, the electricity rate caps that have been in place since 1996 in the majority of the commonwealth will go away. Rate caps already have expired for six utilities statewide.

Consumers will then have an opportunity to “shop” for providers for the generation portion of their power bills, Powelson told members of the TriCounty Area Chamber of Commerce gathered for a breakfast meeting Thursday at Spring-Ford Country Club.

“Many people are not aware that in 2011 — 2010 for PPL — the rate caps are coming off,” said Powelson, a Kennett Square resident and former president of the Chester County Chamber of Business and Industry. This means electric rates will rise to meet the true cost of generation.

“Nothing’s going to change except for that one little part of the bill — the generation rate,” he said.

For Pottstown area ratepayers, this means PECO Energy will continue to distribute electricity. Where that electricity is generated, however, can be decided by the consumer.

Taking the time to shop for electricity and practice better energy conservation will help to keep your electricity bills in check, Powelson said.

Now — before the rate caps expire — is the time to look into installing “smart” technology at home, such as bi-directional smart meters that provide feedback to the electricity provider as well as the consumer, digital thermostats and compact fluorescent lightbulbs, he said.

Replacing older appliances with Energy Star appliances and weatherizing your home to increase energy efficiency are also recommended.

Switching to CFL bulbs alone “will save you $70 to $100 on your energy bill in one year,” Powelson said.

An energy-saving option that will become available to PECO customers in the next year is a time of use rate, Powelson said. For example, a person who does a load of laundry in off-peak hours, such as late at night, will receive a lower rate than a person who does that same load during peak hours of the morning.

Powelson encouraged consumers to ease the transition by taking advantage of “phase-in” programs such as PECO’s Voluntary Market Rate Transition Phase-In Program, a savings plan that matches customer contributions with 6 percent interest. “You take it with you when you shop for a new generation supplier,” Powelson said.

Businesses will be able to utilize conservation service providers who “will come to your business and do an assessment of your HVAC and lighting systems on a pay-per-performance contract,” Powelson said.

Making upgrades now could be advantageous to small businesses in Pennsylvania who will be able to “leverage state monies now for later,” he said

Improvements in the energy efficiency of all state buildings have resulted in “savings for the commonwealth into the millions,” Powelson said.

Many companies are going the LEED-certified route, which will help them — and the environment — in the long run, he added.

The PUC has been regulating legislation enacted to help Pennsylvania service providers prepare for the rate cap elimination. Per Act 129 of 2008, service providers are required to reduce overall energy demand by 1 percent by May 2011 and to further that reduction to 3 percent by May 2013. Also by May 2013, providers must reduce by 4.5 percent in 100 hours of peak demand, according to Powelson.

If those service providers — including PECO Energy — fail to comply, they can be fined up to $20 million, he said

Deregulation came about with the Electric Generation Customer Choice and Competition Act of 1996 “because Pennsylvania electricity rates were 15 percent higher than the national average,” Powelson said. Since that time, the state has had stable rates and has realized a $7 billion savings, he said.

Come 2011, however, the electricity distribution rates, which have been capped since 1996, may go up. PECO and other providers will likely ask for an adjustment of that rate, Powelson said, which underscores the desirability of shopping for the rate you will be able to control through competition — the generation rate.

“When the rate cap comes up, the ‘d’ in default stands for ‘dumb’ for not shopping,” Powelson said. “And by the way, PECO wants you to shop. They’re not going to be offended if you do.”

By Michelle Karas, mkaras@pottsmerc.com

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