The number of consumers shopping for their electricity in Pennsylvania has increased over the last month, a strong indicator of the health of the state’s competitive electricity market.
The Morning Call
Contact: Scott Kraus
State utility regulators see hopeful signs that gun-shy customers are finally shopping for power again, more than a year after they fled the market in droves following price spikes that soaked some homeowners during the polar vortex in early 2014.
New July numbers put the number of customers who have selected someone other than their local utility as their electricity supplier at more than 1.7 million, or about 35 percent of customers, an increase of 8,941 households over last month.
It’s the first time that number has risen month-to-month since November.
In PPL’s service territory, 4,469 customers left PPL for an alternate supplier in July, the most of any electric utility in the state.
The figure is seen by the Pennsylvania Public Utility Commission as an indicator of the health of the state’s competitive electricity market, which it says has been boosted by reforms the agency implemented and new options being offered by competitive suppliers, spokesman Nils Frederiksen said.
Over the last 18 months, however, the number of residential customers who have decided to purchase power from someone other than their utility has been on the decline. The number of residential customers shopping has fallen by 150,000 since January 2014.
PUC officials hope the recent uptick is a sign that trend is reversing.
“The PUC has been doing an extensive amount of consumer outreach and education related to all of these factors, and we believe that consumer confidence in the market — combined with the assortment of options available across Pennsylvania — are having an impact,” Frederiksen said.
PPL doesn’t really care who its customers buy power from.
As a utility, PPL makes its profit by charging all customers, no matter what company supplies their power, a fixed rate to maintain and operate the power distribution network. It also sells power, but must offer it to customers at cost.
It leads Pennsylvania utilities in the number of customers who shop, and encourages customers to explore all their options, PPL spokesman Paul Wirth said. In July, 659,806 residential PPL customers had switched suppliers, 46.4 percent of the total. MetEd’s switching rate is 33.2 percent.
PPL has made an effort to help customers by including a tutorial on its website.
“I do think we did have people who stopped shopping around the time of the polar vortex, and the PUC has taken steps to make it easier to switch,” Wirth said.
The PUC reforms included providing electricity shoppers with better, clearer information on the rates being offered by competitive energy suppliers as well as allowing quicker, easier switching.
The changes grew out of the brutal winter of 2013-14, when thousands of customers who had selected providers offering variable rates were stunned when their bills doubled or tripled as sub-zero temperatures caused demand to spike, sending electricity prices through the roof.
At the same time, safeguards designed to prevent slamming — the unauthorized switching of customers’ power suppliers — made it impossible for customers to switch quickly to cheaper, fixed-price providers, prolonging the pain.
The PUC’s reforms have been helpful, said Pennsylvania’s acting consumer advocate, Tanya McCloskey.
But to significantly increase residential customers’ participation in the market and entice more customers, providers need to offer customers products that offer significant savings or other value such as cleaner energy sources that make shopping for power worth their time, she said.
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