20 Years of Competitive Electricity

Twenty years ago, Pennsylvania enacted the Electricity Generation Customer Choice and Competition Act of 1996, shattering the long-held paradigm of monopolistic energy distribution.

The act allowed Pennsylvanians to shop for competitively priced electricity from the source, choosing how it is generated it and who supplies it, essentially creating a’ la carte energy delivery rather than a prix fixe rate from a singular supplier.

Two decades on, supporters regard the act as a success.  Power costs in Pennsylvania are 9.3% below the national average.  That’s a 25% decrease since 1996.

Critics are concerned about protecting low-income consumers from the predatory marketing techniques that can accompany marketplace competition, but properly regulated, they feel this trend will be successful.

We’ll speak with John Hanger, a former Commissioner of the Pennsylvania Public Utility Commission and one of the architects of the Electricity Generation Customer Choice and Competition Act.  We’ll discuss the benefits to both the industry and consumers in the Commonwealth.  We will also speak with Christina Simeone of the Kleinman Energy Center and co-author of a retrospective study of the affects the act.

To compare residential and business power rates, visit www.papowerswitch.com.

EMAILS

– I shopped for a supplier the first year and it did not “feel” any different in cost or supply. There were horror stories about people being trapped in high rate suppliers and so when the next year rolled around I just went back to the default supplier.

It takes some effort to shop for a supplier and I hate the feeling that I may not have chosen the best deal (like picking the wrong line in the grocery store). By not shopping, I don’t have the pressure or the extra work.   I am still on the default supplier.       – anon

– We have tried off and on to shop for our electric supplier and our experience has not been good.  You have to be SO CAREFUL to read all the fine print because, at least with the ones we’ve tried, there were significant gotchas and ended up costing more per kwh than our default supplier.  Prices only guaranteed for a certain period, automatic renewal with a price increase unless specifically notified for termination, deceptive phone salespersons, I’ve had it.  I personally am glad that the default rate is competitive, we just couldn’t put up with having to regularly manage our electrical suppliers.

Now I do know that the portion of our electric bill that has to do with generation…. (just addressed by your guest).  Long term contracts have also been a joke for us, we just couldn’t make informed decisions because we don’t have time for the required research.       – Eric

– I had been attracted to the idea of shopping for a different provider by the promised price savings. 

I switched to PA Gas and Electric which promised a “competitive variable rate.”  During the cold snap 2-3 years ago, they increased their rate to more than $0.29 per KWH.  I received a $700 plus bill.  I called them to discuss this, and I argued that a “competitive variable rate” should not increase more than 300% without warning as it is both unethical and non-competative.  After arguing for a while, they sent about half of the money back.

Since then I switched back to the default provider and have been relieved of the headache caused by shopping. 

I’m sure many other providers would not employ such shady business practices, but the process certainly turned me off to shopping.    – Tim

–  How does a consumer gauge where utility rates will go over the course of the next year or so in order to determine if it’s a good time to lock into a 2-3 year contract?     – Christina