New Castle News

Closer Look

November 1, 2013

Bill looks at electric suppliers

HARRISBURG — A proposed bill recently introduced in the Senate would automatically switch the power company for millions of people in Pennsylvania.

The author of the bill, Sen. Robert Mensch, R-Montgomery County, argued the move could generate $370 million to the state from payments made by companies bidding to pick up customers.

Pennsylvanians have been able to choose their electric supplier since the beginning of 2011. In a memo to other lawmakers, Mensch said that more people would switch electric suppliers, but many believe the process is confusing and complicated.

Consumer advocates say this is hogwash.

According to the state Office of the Consumer Advocate, 34 percent of residential customers of Penn Power and Penelec have chosen different electricity suppliers. Forty-four percent of PPL residential customers have switched electric suppliers.

An AARP survey released last year found that 93 percent of Pennsylvanians over the age of 50 said they were aware they could switch electric companies. Twenty-eight percent of those who did not switch electric suppliers said they had looked into the process and decided to stick with their default supplier.

Ray Landis, advocacy manager for the AARP in Pennsylvania, said he believes the number of people who are familiar with the process of switching electric companies can only have increased in the more than year since that survey was released.

“The current system works,” said Patrick Cicero, co-director of the Pennsylvania Utility Law Project, based in Harrisburg. “Anyone who wants to shop for a new electric supplier can do so.”

The original version of the bill circulated around the Capitol included language suggesting electric companies would have to guarantee that customers would see lower electric prices if they were forced to switch suppliers. However, that protection was replaced in the bill with a provision indicating that customers would get $50 from their new electric supplier. In addition, the electric company would pay the state $100 for every electric customer forced to switch to them.

Advocates argue that those costs would simply be passed onto consumers.

“It’s a raw deal,” Cicero said. “Every consumer advocacy organization that I know of is against it.”

The number of alternative electric suppliers available varies dramatically depending on where you live. The list of alternative electric suppliers available to PPL customers runs 12 pages. Switching would save a customer in a home using $5 to $10 per 1,000 kwh of use. The Energy Information Administration estimates the average Pennsylvania home uses $870 kwh a month. The list of alternatives for Penn Power only runs four pages with the best deal only offering $2.50 in savings for 1,000 kwh of use.

The push for the change is largely being driven by the companies that hope to pick up customers if more people are forced to leave their default suppliers.

“We do not have a position on this bill,” said Terrance Fitzpatrick, president and chief executive officer of the Pennsylvania Energy Association. The utilities can recover their costs for providing the default service. There are some utilities that are more eager to shed the chore of providing the default service, but there is no consensus.

Cicero said that the basic price set by the default supplier may not always be the cheapest, but it is stable and serves as a benchmark price. Companies competing to woo customers may offer low introductory prices and the jack up the price later, Landis said, and that’s what has consumer advocates and the AARP worried.

(Email: jfinnerty@cnhi.com)

1
Text Only | Photo Reprints
Closer Look
  • well.jpg Auditor: State doesn’t have enough inspectors to monitor wells

    The state’s 83 well inspectors face a daunting enough challenge keeping tabs on 120,000 active oil and gas wells that have been drilled over the last century.

     

    July 29, 2014 1 Photo

  • vote.jpg Independent hopefuls may widen gubernatorial field

    Just when Pennsylvania voters were getting used to the idea of a gubernatorial election showdown between Republican incumbent Tom Corbett and Democratic challenger Tom Wolf, other hopefuls may soon be joining the fray.

    July 28, 2014 1 Photo

  • manna.jpg John K. Manna: Measuring the money

    Should we even bother to have an election in November? By some accounts, maybe the results of some contests are already in.

    July 26, 2014 1 Photo

  • shooting.jpg Man injured in city shooting

    A man was flown to a Pittsburgh hospital Thursday morning following a shooting on West Lincoln Avenue.

     

    July 25, 2014 1 Photo

  • police.jpg Police: Man pulls gun on construction workers

    Construction workers in Neshannock Township flagged down police Thursday claiming a business owner had pulled a gun on them.

     

    July 25, 2014 1 Photo

  • Shooting.jpg Shooting witness arrested for giving false name

    State police have arrested a second Detroit area man after questioning him about Sunday’s fatal shooting in Ellwood City. DeMarco Dorian Hoskins, 22, of Highland Park, Mich., was the third man in a private car that transported the deceased to look for a hospital. Hoskins allegedly gave police a false identity when they questioned him as witness.

    July 24, 2014 1 Photo

  • bridgerepair.jpg PennDOT seeks outside help to make bridge repairs

    State officials are poised to sign a massive deal that will enlist outside help to rebuild and maintain up to 600 bridges, marking the Corbett administration’s latest foray into privatizing key government functions.

     

    July 24, 2014 1 Photo

  • GALLO_Natalie.jpg County native plays Clinton intern

    Natalie Gallo isn’t an intern, but she’s playing one on the New York stage.

     

    July 24, 2014 1 Photo

  • Shooting.jpg Coroner: Shooting victim hit by two bullets

    An autopsy revealed a Detroit area man killed in an Ellwood City shootout had suffered two gunshot wounds. Only one was a fatal hit.

    July 23, 2014 1 Photo

  • schoolmoney.jpg Schools strain from weight of rising pension costs

    Gov. Tom Corbett is ratcheting up pressure on the Legislature to reform the state's pension system by focusing on how often school districts use tax increases to offset costs.

    July 22, 2014 1 Photo

House Ads
Seasonal Content
Section Teases
Must Read
Continuous Super Bowl Coverage