First Energy Corps’ electric utility Penelec announced a large price increase in late 2018 for their customers who are the price to compare residential rate structure. The price increase went into effect on December 1, 2017 and will first become apparent to thousands of customers in January 2018 as the Penelec electric bill with the new higher price arrives in the mail. According to Pennsylvania Public Utility Commission data, the Penelec rate increase will effect close to 358,122 residential customers who are currently on the Penelec price to compare rate structure; a default price given to consumers who have not selected one of the competitive electricity suppliers available through Pennsylvania electricity choice laws.

Default rate payers will see their Penelec electric bills increase by a whopping 25.2% in January from the rate increase that occurred at the end of 2017. The price to compare, which was previously set at $0.05383 per KWh, jumped up to $0.06742 on December 1, 2017 to the surprise of most customers. Most customers experiencing the 25.2% price increase are still uninformed that they are able to shop for lower Penelec electricity prices. Current competitive electricity rates in the region are well below the Penelec price to compare rate, allowing customers the opportunity to pay less for electricity.

Penelec is responsible for delivering power to 500,870 residential customers in Pennsylvania. Only 28.5% of their residential customer pool has elected to shop the market and choose a competitive Pennsylvania electricity supplier, leaving over 358,000 customers who are not participating in electricity choice. Choosing a competitive electric supplier in this market environment is simply about switching out a high default rate for a lower competitive price resulting in electric bill savings. Many first time shoppers are surprised to learn that the quality of power is not effected by switching suppliers since all of the power comes through the same Penelec lines and wires.

The internet and electricity comparison sites have made switching electricity suppliers one of the easiest and quickest ways to save money. In under five minutes a Penelec customer can find a lower electricity price, agree to the Terms and Conditions, and start paying less for their electricity. Below are a variety of options to compare against the Penelec price to compare rate. All electricity suppliers have been vetted and our licensed by the state of Pennsylvania.

Alternative electricity suppliers in Pennsylvania are offering attractive offers to residential customers of Pennsylvania Power & Light (PPL) that are lower than the utility’s price to compare charges. Despite a recent price reduction in the default rate by PPL, the energy choice market is producing rate offers that can provide savings by as much as 15% to the generation supply section of the bill.

On June 1, 2016 PPL was able to drop the default price to compare rate to $0.07491 from $0.07918, which was a modest 5.4% decrease. However competitive rates offered by alternative PPL suppliers have dropped as well providing even larger savings opportunities. The PPL price to compare rates are the result of auctions that are held months prior to the rate actually taking effect. In contrast, competitive rates offered by alternative suppliers are based on current energy market conditions. If wholesale energy rate offers drop after the auction for the Price to Compare rate is complete, alternative suppliers have an easy time undercutting the default price, which gives PPL residential customers a huge incentive to shop for lower electricity prices.

When the price adjustment went into effect on June first, just under 46% of the residential customer pool were purchasing their power from an alternative PPL supplier. The shopping activity in the PPL service area has been above average compared to other competitive electricity markets in the United States and one of the highest in the state of Pennsylvania. However, even with almost half of the customers already active participants in energy choice and a recent drop in the default price, shopping activity could pickup in August as new alternative offers continue to be presented that offer strong electric bill savings.

Here is a list of current alternative PPL electricity rate offers and their comparison to the recent PPL Price to Compare rate.

Peco energy customers are preparing for electricity choice. On January 1, 2011 capped electric rates for all Peco electricity customers (residential, commercial, and industrial) will expire and a true competitive electric market will take shape.

The restructuring is the result of Pennsylvania’s Electric Choice Act of 1996, which forced traditional utilities to divest their power plants and become merely regulated distributors of electricity over their wires. Peco customers have seen their rates stay at constant rates since 1998. When those rates expire at the start of the new year, some customers will see there electric rates on their utility bills increase. To offset the increases and even save more than current prices, Peco customers are encouraged to shop for lower electric rates.

Peco energy makes money from a regulated distribution fee, not from generating the power itself. They are mandated by the state to provide default electric rates for those electricity customers who are slow to shop the competitive market.

One of the biggest misunderstandings is that Peco will be upset with their customers if they choose a lower cost electric supplier. This is a false belief. Peco energy is not in the business of providing electric generation rates and are unable to do so based on the Pennsylvania’s Electric Choice Act of 1996. Peco Energy is actually encouraging their customers to shop for lower electric rates.

Customers in the PPL territory who have not signed an agreement to be serviced by an alternative electric supplier are paying the highest electricity rates in the region.  Since price caps expired on January 1, 2010 a large amount of residential and surprisingly commercial customers remain on PPL default service, in some cases paying 20% more than what is available on the competitive market.

It is important for customers to understand the benefits of shopping for supply or generation electric service.  There seems to still be a misunderstanding among the masses about the new role of PPL; they are soley in the business of delivering power and not supplying power. Shopping for low Pennsylvania electric rates will lower consumer’s monthly electric bill.

Many customers reluctant to switch providers say they wish to remain “loyal” to PPL.  It is important that these customers educate themselves so that they can understand that PPL does not see any profit from supplying them with default service.  That money goes to 11 different suppliers in 8 states who won auctions to provide power to default customers who are slow to shop. 

So what does all this mean.  If you don’t shop you are paying the highest rates in the area to companies who have won an auction to supply service to you at default rates ($0.10402 for most commercial, $0.10448 residential).  Those 11 companies who won contracts to supply power will see profits from the default service.  If you shop the market you can save between 10-20% on your monthly electric rates and the company who you choose to supply you with power will see profits.  Either way, PPL will not see profits from the supply portion (generation plus transmission) of your bill.

For a list of competitive suppliers and their current rates you can either email us with subject line (Send Rates) or join our Power Club on the right.