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Small businesses who are still on the PP&L generation default rate will likely see a significant increase on their electric bills in December. PP&L has announced that their default generation electricity rates, known as the price to compare, will likely increase by 14% on December 1, 2013. The exact increase will not be known until late November as the price to compare rates are based on an auction process whose outcome is largely dependent on the wholesale electricity market at the time of the auction. However the estimated number have been consistently accurate, making the 14% electric bill increase for small businesses serviced by PP&L highly probable. The default rate in December is expected to be 8.686 cents.

The rate increase will only occur for those businesses who have not shopped for competitive electric rates and are still paying the utility default rate for generation and transmission. Companies who have immersed themselves into Pennsylvania electricity choice and have locked in fixed electric rate contracts will continue to pay the price for power as stipulated in their contracts.

Business electricity customers who have not yet found a competitive power company still have time to lock in a low fixed rate and protect themselves from the December rate increase. Currently in Pennsylvania customers can only switch off of default service and onto a competitive rate structure on their scheduled meter read date. In addition, at least eleven days are needed for processing prior to the switch date. Companies with meter read dates towards the beginning of the month would want to lock in a fixed rate with a competitive electricity company before November 20th at the latest to prevent the December rate increase.

Below are a collection of Pennsylvania commercial electricity rates gathered from several companies. The enrollment process can occur online and takes only a few minutes. Lock in a low PP&L commercial rate as soon as possible in order to prevent your company from paying the higher December default rate.

Compare PP&L Business Electricity Rates:

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September 18, 2013

Already one of the most successful electricity choice markets in the country, Pennsylvania could get a boost in their number of power shopping customers due to recent utility rate increases. The state’s second largest electric utility, and most active service utility market in regards to number of shoppers, has increased their default electricity rates by 18.5% since May. Pennsylvania Power & Light (PP&L) raised their price to compare default rates to 8.227 cents from 7.4 cents on June 1. Another rate increase to 8.77 cents went into effect for the 57% of PP&L residential customers who are still buying their power from the utility’s default rate service program.

In terms of number of residential customers currently purchasing their power from a competitive supplier PP&L is Pennsylvania’s most active choice utility market. Currently 534,341 residential customers encompassing 43% of the total residential class has elected to shop for lower PP&L electricity rates found through third party suppliers. Customer who have locked in fixed electric rates with alternative energy companies will not be affected by these rate increases. Customers who are still on the PP&L default rate can prevent the rate increase by locking in a low fixed electric rate available in the competitive market. Competitive electricity prices replace the PP&L default rate on the electric bill offering easy-to-see savings.

Many residential customers who have not shopped for competitive electric rates are intimidated by the number of offers being solicited to them from numerous energy companies who they have never heard of before. Customers should take ease in the fact that all energy companies offering them service are licensed by the Pennsylvania Public Utility Commission. They should however be careful of deceitful marketing practices that offer a teaser rate that quickly jumps up after the initial month of service. Below is a list of electricity rate offers pre-screened by electricitywatch.org, all prices are apples-to-apples comparisons to the PP&L default rate.


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On June 1, 2013 Pennsylvania Power & Light customers who have remained on the electric default rate got a significant rate increase that will show up when these consumers receive their electric bills in July. The PP&L price to compare rate jumped from 7.4 cents to 8.227 cents as calendar pages turned from May to June. PP&L electric rates have been very volatile since the start of Pennsylvania electricity choice. At times competitive rates have showed savings as high as 25% versus the PPL price to compare, while in recent months few competitive suppliers were able to offer savings versus the default price.

The PP&L price to compare is the default rate consumers pay for generation and transmission charges who do not shop for competitive power. The price changes every three months and is often very difficult to predict. Even when PP&L does post an estimated price to compare for the next three month period it has proved to not be an accurate forecast. The majority of PPL customers who have done an electricity switch and who are buying their power from an alternative supplier do so because of the savings they get at that specific time period. However, for more customers the benefits of electricity choice is becoming just as much about price security and certainty as the instant savings. Consumers who locked in fixed electric rates last fall to save money during that time may have been slightly disappointed when PPL announced a default rate reduction from March through May of this year. However now they are saving money once again when electric bills will be at a premium in the hot summer months. These customers do not have to be concerned with this PPL rate hike or the potential of another one in three months since they locked in a low fixed electricity rate.

As of May 29, 2013 over 527,000 residential PP&L electricity customers are purchasing their power from competitive energy companies. This number actually decreased slightly from the all time high achieved in March of 2013 due to the low PPL default rates over the last several months. With the recent rate hike in effect that number is expected to grow. With 42.8% of the residential class active in electricity shopping the idea of electric choice in Pennsylvania is no longer a foreign idea. The market has become once of the most competitive energy choice markets in the country with new suppliers entering almost every month offering low electricity prices and sometimes additional incentives.

Current competitive PP&L electricity prices can be found below.


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In discussing the best time to lock in fixed business electricity rate contracts, there is a wide misconception that fixed electricity rates go down during the fall and spring season of the year. While recent historical data may lead one to believe this may be the case, following this to an end in itself is a fallacy and can cost businesses money as they sit around and wait for prices to potentially fall.

Fixed electricity pricing is based on future forward contracts. With natural gas being a significant source of electricity generation in Pennsylvania, fixed rates are highly correlated with natural gas future contracts. This means that when you look to lock in a two year fixed electricity price, the forward natural gas prices for the next 24 months have an effect on the final fixed price for power. Every month included in the duration of the contract will have a set rate the moment the contract is signed. The final fixed price will be the weighted average of the estimated amount of electricity a business is expected to use for a given month times the rate. This means if a Pennsylvania business customer decides to lock in a fixed commercial electricity rate in the middle of summer the price will take into account the cooler months that come along with the fall and spring seasons.

Locking in a fixed rate will protect Pennsylvania business customers from the volatility associated with the energy market. The fixed rate will put a ceiling on the price if the market were to rise during the term of the contract. If the market were to drop you are not necessarily stuck with having to pay a higher rate. More and more electricity suppliers are offering the blend and extend option in Pennsylvania. This allows a business electricity customer on a fixed rate product to immediately lower their rate at any point during the term of the contract in return of extending out the contract. Exercising this option will maximize the savings for the initial term of the agreement while extending out protection against the risk of a potential rise in future energy prices.

Fixed rates are the most common rate structure for those looking to get off PPL, Met-Ed, or PECO’s high default rates. One appealing feature of fixed rates is the transparency in allowing a company to forecast their annual electricity expenditures. Those businesses still on the utility default rate will have to deal with large swings in costs when the electric bill comes due. Budget certainty is a great asset to have when dealing with a volatile market. With the blend and extend option in place, Pennsylvania business customers looking to sign a fixed rate may want to consider locking in a term for several years.

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The Basics of Pennsylvania Electricity Choice for Business Owners

October 15, 2012

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 […]

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Higher Summer Electric Bills for PPL Customers

May 18, 2012

Electricity rates will be increasing for PP&L customers who remain on the default “Price to Compare” rate on June 1, 2012 for both residential and business consumers. Residential consumers will see a 11.9% increase on their electricity supply charges which include electricity generation and transmission costs. PP&L is encouraging their customers to shop for competitive […]

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PA Electricity Choice Pushes Down Prices

April 10, 2012

Electricity choice in Pennsylvania allows for alternative power companies to solicit customers who previously did not have choices when it came to who do buy their power from. The program seems to be working as more power companies continue to offer service in the state, resulting in lower electricity prices for energy shoppers. Electricity customers […]

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Alternative Power Companies in Pennsylvania

October 27, 2011

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 […]

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Allentown Energy Rates

August 18, 2011

Businesses and households in Allentown Pennsylvania have several electricity companies to choose from now that the state of Pennsylvania has been deregulated. Energy choice has given electricity consumers dozens of rate options to choose from, many of which are lower than the local utility default rates. While citizens of Allentown have choices of who to […]

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Energy Price Comparison

June 11, 2011

Performing an energy price comparison among different energy companies and their offers is not always as simple as it may seem.  If you are shopping for competitive energy prices you may not always get apples to apples rate comparisons, especially if you are doing electric rate comparisons for a business. Increasingly competitive energy suppliers are […]

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