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Published November 07, 2009 08:22 am - Managers of mid- to large-size businesses shopped their options for electricity suppliers here Friday, but “choice” remained largely a phantom for private homeowners.

Power to the people?
Companies say price has to be right

By Diane Petryk
The Daily Item

LEWISBURG -- Managers of mid- to large-size businesses shopped their options for electricity suppliers here Friday, but “choice” remained largely a phantom for private homeowners.

About 16 suppliers and brokers set up information tables and courted big users at a SEDA-COG sponsored seminar.

The closest one could get to hope that competition pressure would force prices down for home users served by PPL Electric Utilities was with Direct Energy of Pittsburgh. Senior Business Development Manager Thomas Lynskey, said his firm, which supplies the third highest amount of electricity across North America, doesn’t disdain private customers.

“We serve seven million home owners in Canada and Texas,” he said. “We’re coming,” he said.

Where and how long that will take, depends on profit potential, of course. Mike Beck, Direct Energy’s vice president for residential business, confirmed in a phone call that the firm is actively looking at PPL territory, but insisted no decision has been made.

“The market must be structured in such a way that it lets us compete fairly,” he said. For instance, PPL does the billing on behalf of the generating company and this allows the company to take advantage of systems already in place, he said. PPL is also responsible for collecting and writing off bad debt. Once another generating firm is in the mix, one question is, what happens with bad debt?

There are three facets to electricity service, explained Ray Murphy, Jr., PPL’s major accounts manager — distribution, transmission, and generation. Distribution — the local part of the delivery system — is regulated by the Pennsylvania Utility Commission. Transmission — the transport of high votage electricity from the generation plant to substations — is controlled by the Federal Energy Regulation Commission. Generation is the production of electricity at a power plant. This power is the only facet on the unregulated open market.

“That’s what people are shopping for,” Murphy said. As yet, however, the only people who can go shopping in our region are those who represent businesses or institutions, such as hospitals or schools, that use a lot of energy.

The right fit

For people served by PPL, the utility is their default provider if they don’t shop around. The utility must pass on the price they pay for the electricity. There is no profit in it for them.

PPL wants customers to find their own suppliers, Murphy said. He used a shirt analogy. “We can buy you a shirt. It’ll be white Oxford with a 17-inch neck and 16 and 3/4 inch sleeves. You can wear it, but I don’t think it’s gonna fit you. What I want is for you to buy your own shirt. You can get the size and color you want. We’ll ship it for you. That’s what we are.”

Lynskey said to shop for the best electricity deal you have to understand your bill. Most bills are easily comprehensible, he said. “You look at the transmission charge, transition charge, and generation charge. What you’re paying now is the baseline. Look at PPL’s published rates for next year and compare the expected generation charge to someone else’s rate.

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