Electric rates for small and medium business customers in the Pittsburgh, Pennsylvania area served by Duquesne Light will become more volatile starting June 1, 2013, after the Pennsylvania Public Utility Commission adopted a new process for setting "default service" prices.
Default service is provided by Duquesne Light to electric customers who do not shop for their electric supplier. It's a pass-through of wholesale market costs to serve these customers' power needs.
In January, the Public Utility Commission adopted a new program to procure default service supplies at Duquesne Light for the period beginning June 2013, and the new process exposes small and medium business customers at Duquesne Light to greater volatility in the default service rate.
Customers can avoid this volatility by actively choosing a lower electric rate offered by a competing energy supplier.
Specifically, for medium commercial customers at Duquesne Light (those with demands of 25 kW to 300 kW), the PUC has removed the "laddering" of default service power supplies. Laddering is the use of overlapping supply contracts, procured at different times throughout the year, to serve default service customers. It's meant as a way to reduce volatility and mitigate the impact of any spikes in the wholesale electric market.
Starting June 1, 2013, default service for medium commercial customers at Duquesne Light will have no laddering. Instead, all of the power for a six-month period will be bought in a single procurement. These procurements will be repeated every six months.
This exposes medium commercial customers to the full impact of wholesale market conditions at that point in time. Additionally, since default service will only be hedged for a short period (six months), customers who do not shop for a competing electric supplier will be exposed to wholesale market volatility, and an electric rate which fluctuates every 6 months.
Default service is also changing for small commercial (less than 25 kW) customers at Duquesne Light. While small commercial default service will still have some laddering, small commercial customers will no longer receive a fixed rate for 12 months. Instead, Duquesne Light will change the small commercial electric rates every six months, as new power supplies are procured for these customers on a more market-reflective basis. Similar to medium commercial customers, small commercial customers at Duquesne Light are facing greater electric rate volatility as they lose their 12-month default service hedge.
Choosing an alternative electric supplier, and getting off of default service, will allow Duquesne Light business customers to avoid rate volatility and find a low electric rate. The deregulation model forces competing electric suppliers to compete for your business, so you always get the lowest electric rate.
Competing electric suppliers can save Duquesne Light small commercial customers 10-15%, with savings even higher for medium commercial customers.
Avoid the surprises of default service and take control of their energy costs today.