Price Increase Set for Penelec Electricity Rates
Pennsylvania electricity customers who are serviced by the Penelec price to compare default rate will see an increase of 25.5% on the price they pay for power this summer. The rate increase, which was approved by the Pennsylvania PUC, will go into effect on June 1, 2013.
The large rate increase is expected to create a flurry of new energy shoppers as consumers will look to avoid the rate increase through the Pennsylvania electricity choice program. Electricity choice in Pennsylvania allows consumers to choose a competitive energy company to supply power to their homes and business instead of being forced to pay the default regulated supply rate provided by local regulated utility companies such as the Pennsylvania Electric Company (Penelec). By shopping for lower electricity rates a customer can avoid the Penelec price to compare increase.
The Penelec increase is a result of a series of competitive electricity auctions where energy companies bid for the right to supply default paying customers in the Penelec service area for a certain period of time. Energy companies must work in a premium in their bids to take into account part of the Pennsylvania Energy Choice Act that allows customers to switch off of default service and onto competitive service at any time. In contrast, a competitive energy supplier can often offer lower electricity prices to individual customers by having them sign a fixed electric rate contract for a specific number of months.
So far about 32% of the roughly 480,000 Penelec residential customers have compared electric rates and chosen a competitive supplier. The switch percentage may take a significant increase this summer as more and more customers become aware that their Penelec electric bills have increased by 25 percent. However, since most customers won’t see the effect of the higher rate on their bill until July, which will be for the June service period, the majority of consumers will continue to pay higher than needed electric rates for the month of June. It is important to spread the word about the Penelec rate increase and Pennsylvania electricity choice options so that customers can avoid paying too much on their summer electric bills.
On June 1 the Penelec price to compare rate will officially rise to 8.76 cents from 6.98 cents. Below are a number of competitive electricity rate offers from alternative suppliers available for Penelec customers to shop and compare.