PPL Electric (Pennsylvania Power and Light) confirmed last week that business customers who do not choose a new energy provider will see their rates increase anywhere from 18% to 36% on January 1, 2010, when a decade-long rate cap is due to expire.
As previously noted, large rate shocks for Pennsylvania electric customers have been expected by PPL for some time, based on preliminary electric pricing data. However, last week PPL completed its final purchases to supply its so-called "default service" customers -- or customers who do not choose an alternate electric company -- and was able to calculate the final impact of the higher rates.
PPL said monthly bills will increase on average about 18.4 percent for small businesses and about 36.1 percent for mid-size businesses. The projections are based on a new, blended rate of 10.053 cents per kilowatt-hour for small and medium-sized business customers.
"Under current market conditions, customers may be able to secure better pricing by shopping and selecting an alternative retail energy supplier," PPL said last week.
That's because PPL's new prices are "blended" over several years of buying electricity. Accordingly, PPL's electricity rates include power that was bought -- and priced at -- record high levels of energy prices in 2007 and 2008.
Energy prices have plummeted since 2008, but customers can't benefit from those savings by remaining with PPL.
However, competing energy providers are able to pass the current low prices along to customers, because they haven't locked in any power purchases yet. That means customers can save significantly on their electric bills simply by shopping for a new electric company and lower rate.
Shopping for a new energy provider can easily save business customers 20% based on current pricing, and depending on the customer's usage and size, even larger amounts.