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Part 1: Deregulation Explained

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(Photo by Ed Fischer)

(Photo by Ed Fischer)

KYW Regional Affairs Council - Jan. 2011
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The new year signals the dawn of a new day for electric customers in Pennsylvania.

In 1997, the Pennsylvania Legislature passed a law that placed a 15-year cap on electric rates while allowing distribution companies such as PECO to recover so-called “stranded” costs, which included bad infrastructure investments such as the Limerick nuclear power plant.

The idea was to ease the transition to a free market.

Sonny Popowski, Pennsylvania’s state consumer advocate, says there was a lot of anxiety leading up to the lifting of those caps.

“Just a couple of years ago, when energy prices throughout the economy were very high, we were concerned that when PECO’s rate caps came off at the end of 2010 we would see significant rate increases,” he recalls.  “But in fact the rate caps are coming off at a time when wholesale energy prices across the economy are pretty reasonable.”

So now Pennsylvanians have entered the age of “electric choice,” which means it’s time to go shopping.

Robert Powelson, a commissioner with the Pennsylvania Public Utility Commission (PUC), couldn’t agree more.

“We are strongly encouraging the 1.6 million customers in the PECO service territory to not stay on the default rate, to pick an alternative generation supplier,” he told KYW Newsradio.

One thing to remember is that PECO will be still be delivering your power and maintaining the power lines and poles.  If you have an outage, PECO will take care of it.  And your monthly PECO bill will contain the usage charges from your new power generating company.

But customers may be able to avoid a rate increase altogether by shopping for a new electric generating supplier.  PECO customers now have up to 17 companies to choose from, and the PUC has set up a web site to help you browse. The address is www.papowerswitch.com.

Hear the full podcast…

Reported by Paul Kurtz, KYW Newsradio 1060.


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