The Pennsylvania PUC has proposed sweeping changes to the state's restructured electric market -- where alternative electric suppliers compete to supply customers with electricity.

Customers have been able to choose their electricity suppliers in Pennsylvania since the late 1990s, but shopping for power only took off once the rate caps expired at the electric utilities in 2009 and 2010.

Since that time, some two million Pennsylvania customers have shopped for a lower electric rate from a competing electric supplier.  While that's a huge number, most customers -- especially when it comes to residential customers -- still buy "default" electricity supply, which is provided by the local utility.

However, the default electric rate can be 10-30% higher than rates from competing electric suppliers. But because many customers aren't familiar with shopping for electricity the way they shop for groceries, gasoline, or cellular service, many customers aren't taking advantage of the huge savings available in the electric market.

The Pennsylvania Public Utility Commission has proposed a series of changes to encourage customers to save money on electricity by shopping for an alternative energy supplier.

Chief among these proposals, issued by the PUC last week, is that default service for residential and small business customers should be based on the market price for power.  Specifically, the default electric rate for residential and small business customers in Pennsylvania would be based entirely on short-term contracts no longer than 90 days in length, and the electric rate would change every 3 months based on swings in the wholesale price of power.

Among other things, the PUC's changes would mean customers wanting certainty in their electric rate would need to shop for a competing supplier offering an alternative, value-added rate.

The PUC's proposed changes are still a long way off, and require legislative approval.  At the earliest, they would start in June 2015.

However, customers don't have to wait until then to enjoy the savings from competition in the electric industry.  Pennsylvania electric customers, today, can find low electric rates from competing energy suppliers.  With the head-to-head competition in electric rates, Pennsylvania customers can save big on their electric bills.

Recent Articles