While electricity shopping has increased throughout the year in Pennsylvania, an abundance of confusion remains on the finer points of Pennsylvania’s deregulated electricity choice market.
One of the biggest subjects of confusion is the new role of the incumbent utility companies – PECO Energy, Pennsylvania Power and Light, Met-Ed, Duquesne Light, and more.
Prior to the decision to make Pennsylvania an energy choice state, the utility companies were regulated by the Pennsylvania Public Utility Commissison to serve all functions of electricity for Pennsylvania consumers; they were in charge of electricity generation, delivery, and the maintenance of the power lines and wires.
Today, after PA electric choice has been implemented, these companies are still regulated by the PUC to deliver power and control the maintenance of the power lines and wires. Their revenue streams are derived from the distribution charges found on your electric bill. The distribution charges remain regulated by the state and are the same no matter which electric supplier you choose.
The other parts of the electric bill (generation and transmission) have been opened up for competition allowing alternative power companies in PA to compete for customer enrollments. Customers who do not choose an alternative power company pay a default rate with their incumbent utility company. The utility company does not profit from the default rates and instead passes these charges on to other power companies who have won previously held auctions for the right to service default paying customers.
This brings up one of the most intriguing aspects of electricity choice in Pennsylvania; even if you haven’t selected an alternative power company, your money is already going to one through the default rates you pay. So if you can find a lower rate from an alternative power company on your own, there is no reason not to enroll with that company.
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