Apr 19 - McClatchy-Tribune Regional News - Dan Kelly Reading Eagle, Pa.



Amid forecasts of 30 percent increases in electric bills, a record number of PPL Utilities customers shopped around for a cheaper electric supplier when rate caps were lifted Jan. 1. PPL officials, the state Public Utility Commission and even the state Office of the Consumer Advocate applauded the trust Pennsylvania's electric consumers are showing in the new electricity marketplace. Almost 400,000 PPL customers, or 28.3 percent, switched to another supplier, PUC spokeswoman Jennifer Kocher said. "It is a market that has grown faster than any other market not only around the state but in other states across the U.S. that have restructured their electric markets," Kocher said. "We do expect another block to begin switching when people get their fi rst airconditioning bill." However, because electricity rates have dropped significantly, when Met-Ed rate caps are lifted in 2011, customers might not feel the same incentive to shop. "Because Met-Ed is buying their power now, we may not see as much competitive activity," state Consumer Advocate Sonny Popowski said. The reason Popowski said is the price of electricity was much higher in 2007, 2008 and 2009, when PPL was buying electricity generation contracts for 2010.

Met-Ed's current rate is 7.99 cents per kilowatt hour. If its rates increase by 30 percent, the same as PPL, when rates caps are lifted, its price per kilowatt hour -- 10.3 cents -- would be lower than PPL's current rate of 10.4 cents per kilowatt hour.

The cost of electricity on April 8 on the PJM (Pennsylvania, New Jersey and Maryland) Interconnection was about half of what it was Jan. 7.

Met-Ed purchased power for 2010 in January and again in March and plans to make additional purchases in May and October, company spokesman Scott Surgeoner said.

 Met-Ed won't be able to predict the amount of its rate increase until after the October purchase, he said.

"After that we will get a price to compare out to our customers so they will know that, if they stay with Met-Ed, that is what they will be charged and they will have a full two months to shop for an alternative supplier," Surgeoner said.

"Remember when gas was $4 per gallon during the summer of 2008?" Popowski asked. "Built in to the PPL prices are some (purchases) from a couple years ago that were bought when (energy) prices were high."

Many new competitors in Pennsylvania's electricity marketplace were able to beat the PPL prices, which encouraged switching.

Met-Ed's rate increase probably will not be as high as PPL's, the consumer advocate said.

"A year or two ago we feared the rate increase might be as high as 50 percent," Popowski said. "We're not sure yet, but we won't be seeing the kind of drastic rate increase we feared."

Popowski said customers are looking for one thing -- low rates. And if the rates already are low, they don't have to go shopping

An estimated 395,000 PPL customers have switched to a competing supplier, which is encouraging, company spokesman John M. Levitski said.

He said utility providers make no money on the generation portion of the electric bill, and PPL has actually encouraged its customers to shop around.

"We made six buys of electricity over three years, and we were subject to those higher prices," Levitski said. "Of course, it is possible that next year our rates will be lower as this competition really starts to take hold."

(c) 2010, McClatchy-Tribune Information Services  To subscribe or visit go to:  www.mcclatchy.com/