On January 1, 2011, the last electric rate caps expired in Pennsylvania, signaling the completion of its transition to electric competition.
With landmark legislation in 1996, Pennsylvania became one of the first states to give customers an opportunity to choose their energy provider.
Pennsylvania's utilities sold their power plants to open the market to competition, and now only own the transmission and distribution wires, while also providing "backstop" power to customers who do not shop for electricity. With the move to competition, the utilities have separated service into two parts:
• Regulated distribution of power, which is still only provided by the utilities, and
• Supply of the electric commodity, which is open to competition.
Customers can choose to receive their electricity supply from their utility, or an alternate energy provider.
Customers who do not choose an alternate electric provider receive default service from the utility. In most parts of the state, including at PECO, PPL, and the FirstEnergy companies, the utilities buy default service power through competitive auctions.
While each utility buys its default service supply differently, they generally follow a similar pattern. Most power for residential and small business customers is bought through competitive auctions on a rotating basis, with a mix of long-term supply contracts and spot market purchases. This mixing of contracts is meant to mitigate power price volatility; however, it can add a risk premium to prices due to hedging power on a long-term basis. Additionally, since contracts have mixed lengths, any decreases in power prices won't be seen right away, because some higher price contracts will remain in effect. Customers can avoid the risk premium, and take advantage of falling prices faster, by choosing an alternative energy provider.
For larger businesses, default service supply is bought on the wholesale spot market, with prices changing hourly. The cutoff for this mandated hourly pricing for customers buying power from the utility varies, but is generally 500 kW and up, and in some cases as low as 300 kW and up. To avoid these volatile hourly prices, large businesses can contract for a flat price with an alternative energy provider.
Customers who choose an alternate energy provider still have their power delivered to them by their utility, and contact their utility for all outage reporting. Customers can choose to receive either a single bill from their utility for their delivery service and energy supply service, or can receive two bills, one from each company.
For power outages, please refer to the numbers below:
Allegheny Power 1-800-255-3443
Duquesne Light Company 1-412-393-7100
MetEd / West Penn Power 1-800-545-7741
Penn Power 1-800-720-3600
Pennsylvania Power and Light (PPL) 1-800-342-5775
Philadelphia Electric Company (PECO) 1-800-494-4000
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