Business
Businesses hear electricity deregulation options
WESTERN PENNYLVANIA — Remember those nerve-wracking days of deciding what to do when they deregulated the phone industry?
Could anyone ever forget the puzzling choices when they deregulated the natural gas industry?
Guess what — now it’s time to deal with electric deregulation.
And, oh, what a batch of new terms there are to learn. Get ready to hear such phrases as: provider of last resort, shopping credit and competitive transition charge.
This is all part of Pennsylvania’s plan to deregulate the electric industry beginning Jan. 1. The state Public Utility Commission still has to rule on a number of regulations and certain rates.
Regardless, this much is clear: This fall Pennsylvania consumers and businesses will be making choices that will determine how much they will pay for electricity.
FirstEnergy Solutions, an electric generation supplier owned by Akron-based FirstEnergy Corp., held a seminar Thursday morning at Sharon Country Club to explain deregulation to area businesses. FirstEnergy also owns Pennsylvania Power Co., a separate company which operates independently of FirstEnergy Solutions.
For Penn Power customers deregulation means they will have to choose a new electric generation supplier as the local utility will no longer provide electricity starting Jan. 1. Penn Power’s new role in deregulation will be to transport electricity to homes and businesses. The utility will no longer generate electricity.
Penn Power currently serves 145,000 customers in all of Mercer and Lawrence counties as well as sections of Allegheny, Beaver, Butler and Crawford counties.
However, in the tricky new world of deregulation terminology, Penn Power will be a provider of last resort. That means if a supplier is unable to provide electricity to a customer, that customer will be able to rely on Penn Power for electricity which it will buy from a power generator. Based on current electric prices bought on the open market, those rates will be higher than what Penn Power customers are currently paying. The PUC is expected to announce in the upcoming months what Penn Power’s provider of last resort rate will be.
In outlining what they believe will happen for businesses, FirstEnergy Solution managers said three different types of products are likely to be offered:
ä Percent-off product — This is where a business is guaranteed savings each month whereby they get a certain percent off of their shopping credit. Shopping credit is the amount not paid to the local utility if the customer buys power from another supplier. It is the price a customer should use to determine savings when buying electricity from a new supplier rather than paying the utility’s regulated rates. This product allows a business to contract for electricity prior to published rates.
ä Fixed price — This is the most popular choice where electric rates are fixed for the length of the contract. It’s recommended to wait until electric rates are published to evaluate this option.
ä Hourly price — This is the most risky as those taking this choice are buying electric rates on the open market. Electric prices on the open market can fluctuate greatly.
FirstEnergy Solution managers stressed businesses should be in a position to make their electric choice buy Oct. 1 as it will take up to two months to process whatever option they choose.
On Thursday morning the PUC approved another electric generation supplier, Premier Power Solutions LLC for the Penn Power service territory. In addtion to FirstEnergy Solutions and Premier, the PUC has approved more than a dozen generator suppliers for the Penn Power territority. But that doesn’t necessarily mean that these companies are providing service.
Penn Power is expected to have information ready for local consumers and homeowners once the PUC has made a decision on electric rates.
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