With a savings potential of well over 10% available in the competitive market, one would think that the act of switching electricity suppliers in the PECO service area would by now have evolved to be as popular as shopping for mobile phone service. Instead the market remains somewhat immature with only slightly more than a third of the PECO residential market currently participating in the state’s energy choice program by purchasing power from a competitive supplier. Nevertheless, competitive suppliers are ramping up their marketing efforts by increasing their advertising budgets and lowering their prices in an effort to educate consumers and gain new customers.
Pennsylvania’s electricity restructuring act allows customers of PECO Energy to shop and switch competitive generation rates. The act unbundled PECO Energy so that they are now only responsible for delivering the power to energy consumers who reside within their service area. Customers who do not switch to a competitive rate pay a default rate that is charged through PECO Energy, however PECO Energy does not profit from the revenues received for the default price. The default rate is offered by competitive electricity suppliers who bid in an auction held by PECO Energy to provide electricity generation service to default paying customers. PECO Energy collects the revenues for default service on the electric bill and then passes through the charges to the suppliers who have won the auction. In essence, every PECO Energy customer is purchasing their power supply from a competitive supplier, those who haven’t made a decision for themselves have their money being passed through PECO Energy to competitive suppliers through the auction process.
On the other hand, customers who do switch often have the ability to select a electricity price that is below the default rate, as well as make other important decisions about their electricity purchasing decisions such as the length of term they lock their price in for and the way their energy is generated. With the default rate changing every four to six months, some shopping consumers like to enroll in short term plans so that they are not locked in if the default rate drops substantially. Other customers prefer to switch to a secure low fixed rate for as long as possible to hedge against the risk of a potential volatile energy market. Pertaining to electricity generation source, there is an increasing number of consumers who are environmentally conscious and prefer to pay a premium for power that is derived from renewable sources. However for the majority, price remains the biggest factor when looking to switch to a competitive PECO Energy rate.
The biggest plus side of Pennsylvania electricity choice are the options that is provides to consumers. Instead of the one size fits all approach, PECO customers can switch to a energy rate plan that best fits their desire. The PECO default rate simply provides a benchmark so consumers can see if the price they are being offered is a fair value. With the savings between competitive rates and the default rate widening, more PECO Energy customers are expected to switch suppliers in the coming months. Compare PECO Energy rates below from competitive suppliers who have been licensed by the state of Pennsylvania.