The Daily Item, Sunbury, PA

August 11, 2011

PPL loses 40% of its residential base since deregulation

By Joseph Deinlein
The Daily Item

— Almost 40 percent of PPL residential customers have switched electric suppliers since deregulation, and on average, they are saving $100 a year.

“It may only look like a couple cents” on the monthly bill, said Denise McCracken, state Public Utility Commission spokeswoman. But it does add up for the 500,000 who left PPL.

Only Pike County Light & Power, at 74 percent, had a higher percentage of residential customers leaving than PPL of the nine electric utilities listed on the PUC website.

“What controls the market right now is wholesale prices,” McCracken said.

Competition was a key component in the deregulation of the electric industry, which took effect at the beginning of 2010.

The deregulated market works like this: The lines running to your house are still owned by a particular electric company, known as a distributor. In most of the Valley, that’s PPL, except in the Lewisburg area, which is controlled by Citizens’ Electric Co., Lewisburg.

While there’s no choice in paying for the connection, there is choice in paying for the supplier. PPL competes against more than 30 other companies that go out to the wholesale power market regularly to get prices on blocks of energy.

Because it owns the lines, PPL is required to set its price quarterly and be approved by the PUC to ensure it is competitive, McCracken said. The other companies can change their rates more frequently.

As a result, PPL’s cost per kilowatt hour (the base measurement for electricity) was listed as $0.0877 as of Wednesday afternoon on the PUC website.

PPL’s cheapest competitor is Starion Energy, of Southbury, Conn., which was listed at $0.0799 per kilowatt hour.

However, keep in mind that Starion’s price is variable. Other competitors offer fixed rates at an amount lower than PPL’s, such as Ambit Energy, of Plano, Texas, with a rate of $0.083.

Also, some suppliers offer renewable or “green” energy sources, which usually costs more, McCracken said.

For those who get their power from Citizens’ Electric, there are no other competitors in the market.

But that’s not so bad. As of Wednesday afternoon, Citizens’ cost per kilowatt hour was listed at $0.0753, about 14 percent less expensive than PPL’s.

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