The Met-Ed electricity default rates will increase for all rate classes across the board, including those for small and large businesses, starting December 1st. The new Met-Ed default rate for a business customers will go up to $0.09133/kWh. This will be an increase of 12% for companies who are still using Met-Ed as their default electric supplier. Businesses in the Met-Ed territory who are still on default service can expect to see the increase reflected on their first Met-Ed electric bill received in 2013.

Pennsylvania competitive electricity commercial rates are substantially lower than Met-Ed’s default rate. Commercial customers in Pennsylvania looking to switch to a competitive electricity supplier can expect to save 20-35% based on current market conditions. If a business looking to lower their costs decides to lock in a rate with a competitive electricity supplier they will still only receive one electric bill from Met-Ed.

With January and February expected to be cooler than last year, the demand for energy will go up which is sure to put more upward pressure on commercial electricity rates. Pennsylvania businesses looking to get off the Met-Ed default rate should consider locking in a rate before the holiday season swings into full gear.

Pennsylvania business customers still with Pennsylvania Power and Light’s default service have experienced large swings in their default rates since the PPL cap rates first expired in 2010. They are not alone as many customers still on Met-Ed’s default rate and PECO’s default rate have also experienced large fluctuations in the price of their electric bill. As higher default rates force many to start shopping for competitive electricity rates it is important to understand the basics of Pennsylvania electricity deregulation and what it means for electricity choice in your area.

The electric bill is split up into two basic charges: distribution charge and supply charge. The distribution charge is a regulated charge and will not be affected by switching to a competitive electricity supplier. The distribution charge deals with the cost of maintaining the lines and wires so the electricity can be transferred from your local distribution company directly to your business. The supply charge is the deregulated charge. If your company decides to stay with PECO, Met-Ed, or PPL you will be set up on a default rate determined by a series of auctions. A company on the default rate can choose to switch to a competitive supplier anytime without being penalized. Due to a number of factors involved including the high volatility of the energy market, a company will be charged a premium if they decide to stay on the default rate.

When you start shopping for competitive electricity rates it is important to make sure the suppliers are including all components of the supply charge. The three basic components of the supply charge are energy, capacity, and transmission. These components can be further dissected to line loss, ancillary, congestion and so forth. Some suppliers will leave out a component of the supply charge to make their rate more attractive. However this charge will then be bypassed onto your electric bill as a separate charge. It is important when shopping for competitive electricity rates to let the supplier know you want an apples to apples comparison to your utilities default rate. Do not let this deter you from taking advantage of the large margin of savings. A typical commercial business in Pennsylvania still on the PECO, PPL, or Met-Ed’s rate will save an average of 15-35% per year by choosing a competitive electricity supplier.

Electricity customers who are serviced by Metropolitan Edison Company (Met-Ed) are preparing to shop the competitive electricity market for the first time.  On January 1, 2011 electric rates for Met Ed customers, that had previously been capped, will expire giving customers the option to stay on the Med Ed default supply price or shop the market for lower electric rates.

It is expected that Met Ed customers who compare electricity rate offers from electricity companies will be able to save money versus the Met-Ed default price to compare rates.  Electricity shopping will result in lower electric bills for those electric customers who are able to lock in lower electric rates than the new Met Ed rates.

Met Ed residential customers should take the time to compare all electric offers.  It is expected that some electric companies will offer residential Met Ed customers variable rates that fluctuate with market rates, while other electric companies will offer fixed electric rates for up to two years that will give households price protection.  Other markets in Pennsylvania have seen low variable introductory rates followed by immediate spikes.  Sometimes a slightly higher fixed electric rate will save you a lot more in the long run compared to a lower variable electric rate.

Met Ed commercial and industrial customers will be given a variety of electricity rate options.  As Met Ed moves from a regulated environment to a competitive market, it will be extremely important that businesses take the time to educate themselves on all of their electricity supply options.  The right choice can save them thousands on their electricity bills.

The Pennsylvania Public Utility Commission expects the average Met-Ed residential customer’s bill to increase by about 9.1 percent when the utility’s rate cap expires in December.  That hike is based on wholesale electric prices that have, until recently, dropped based on the sluggish economy and customers who cut back on their power consumption.

A division of Akron, Ohio-based FirstEnergy, Met- Ed serves roughly 190,000 customers in York County.  On Dec. 31, Met- Ed’s rate cap expires, and its customers will then pay full-market prices for their power.  As of May, Met-Ed had completed three of its four energy auctions and had bought the lion’s share of the power it will distribute to its customers starting Jan. 1, 2011.

During the earlier part of this year, wholesale electric prices stayed low as more people cut back on their demand for power.  Also, at the time, wholesale natural gas prices declined.  Typically, natural gas is one fuel that power companies use in the generation of electricity.  It was at that time that Met-Ed held its first three energy auctions.  This fall, Met-Ed has scheduled its final energy auction.  Once the final auction is held, competitive suppliers will be able to determine whether or not they wish to enter the market and offer electric customers in Met-Ed competitive electric rates.

Despite the slight uptick in national wholesale power prices, the PUC doesn’t expect a major change from its prediction of a 9.1 percent increase for Met-Ed customers.  It is uncertain how the competitive market will look like for Met-Ed electric customers.  Dozens of competitors are offering customers choice in PPL, another Pennsylvania utility area whose capped rates expired at the end of 2009.

PECO is trying to prepare their customers for choice in who charges them their electric rates by unleashing multiple programs.  Recently, the PA Public Utilities Commission announced that Pennsylvania utility companies will offer customers a choice of who they buy their electricity from.  In addition, price caps that expired in 2011 in the PECO area - as well as Met-Ed, Penn Electric, and West Penn – have increased default rates and given consumers an incentive to shop.

PECO is rolling out numerous programs to help customers cope with increases including the PECO Smart Home E-Audit, Smart Lighting Discounts, Smart Home Rebates, and Smart Appliance Recycling.  Alot of smart programs, but probably the smartest way consumers will be able to reduce their electricity bill is by shopping for an alternative supplier that will offer a reduced rate versus the PECO price to compare default rates.

PECO will continue to deliver power to those customers who they are currently delivering to as well as continue to send invoices out.    The decision to choose an alternative electric generation company will simply be a choice to pay less.  We will be providing contact information and rates for alternative providers as we get closer to 2011.

Update, as promised above, here are the absolute best rates and electric providers we have found in PECO:
Rates are updated Daily

Question and Answers for Electricity Choice in Pennsylvania

Why should I shop the market?

Savings are available.  If you haven’t shopped you are paying what the state calls a price-to-compare rate.  Your local utility (PPL, PECO, Met-Ed, Allegheny, ect.) does not profit off of price to compare rates.  They simply pass on these default rates that are provided by generation companies who have bid to supply energy to you and other customers who are slow to shop.

Why shouldn’t I shop the market?

Only if price to compare rates are lower than the current competitive market rates.  This isn’t the case right now.  If the goal is to pay the lowest electric rate (and why shouldn’t it be?) then you should shop and sign a contract with a licensed electricity generation company.

What is involved in the process of changing who supplies my electricity?

In order to change electric suppliers and receive a lower rate, all that needs to be done is to sign an agreement form with the provider you have chosen.  The agreement form will stipulate the rate you are paying for the term (example: $0.085 cents per KWh for 12 months)

Will someone come to my property to change the wiring?

No, nothing is physically changed.  Your local utility still delivers power to your property.  The new supplier simply informs the utility that you will no longer be paying default (price to compare) rates and instead will be paying the lower rate that you have contracted for.

Can the local utility “get back” at me for switching off of the price to compare by not responding to service calls or charging me more for delivery?

Absolutely not!  First, through deregulation the utility companies are only in the business of delivering power.  They are not able to make profits off of supply service.  There supply service is through other private companies who have won a series of auctions to be able to supply price to compare rates to customers.

Second, just to give you peace of mind, all actions by utilities including delivery rates and repair services and regulated and monitored by the PA Public Utility Service.

Feel free to post more questions that will be answered immediately.