York and Adams Smart Growth Coalition

 Electric Rate Caps Expiring

The York/Adams Regional Smart Growth Coalition hosted a free seminar on what homeowners need to know about the electric rate caps expiring on August 3, 2010.  A crowd of about 350 people turned out for the session at Heritage Hills Golf Resort & Conference Center.

'What does the electric rate caps expiring mean?' The electricity rate caps were put in place in 1997, controlling costs after legislators restructured the electric industry. The caps for FirstEnergy's Met-Ed, which services most of York County, are set to expire Dec. 31.  This means that Met-Ed can increase its rates. Customers may want to shop for another company to cover the generation portion of their home electricity service, explained Terry Gilman, FirstEnergy spokesman.  Met-Ed will still service the area for transmission and distribution, he said, regardless of which company a customer chooses for generation. Generation reflects only the production of electricity.  The electricity will still be transported through Met-Ed's lines, and Met-Ed crews will still be on scene when there's a problem with lines, he said.  Customers have had the ability to shop for generation suppliers for years, but few chose to do so because Met-Ed's rates were capped, he said.

'What can homeowners do?' Customers who choose to find a new generation company can start by visiting www.papowerswitch.com said Christina Chase Pettis, a spokeswoman with the state's Public Utility Commission.  The PUC Web site walks customers through the process of finding a supplier, she said. By November, the site will be updated to include a list of the generation rates of several licensed companies, she said.  Area residents are likely to be inundated with mailings from companies over the next several months, but it's important to choose a company licensed with the state, she said.  It's also important to read the terms of the contract into which the customer would be entering. Some companies, just like credit cards, offer a low introductory rate that increases after the initial term expires, she said. Some companies also charge a penalty fee for canceling service before the contract expires, she said.  "It's not just as cut and dry as picking the lowest price," she said. "One company might only be cheaper for the first three months."  If a customer finds a rate lower than Met-Ed's and agrees to the terms of the contract, that company becomes the customer's generation supplier.  But customers don't have to do anything.  In that case, Met-Ed will continue to be the default provider, she said.  "The only way you're not going to have (electricity) is if you don't pay your bill," she said.  But customers who choose to stay with Met-Ed are likely to notice an increase on their bills. 

'How much will my bill go up?'
 Though the PUC months ago predicted Met-Ed rates could increase as much as about 30 percent, recent projections show an increase of 9.1 percent.  Met-Ed hasn't committed to a number, but a spokesman said the first three of the four auctions for consumer electricity this year have had rates "about 10 percent higher than the capped rate that is currently in effect." By early November, after the last auction, consumers will know exactly how much of an increase to expect.

Resource Links:


Presentation by Met-Ed

More than 100 Ways to Improve your Electric Bill

Energy Efficiency and Conservation Fact Sheet

Shopping for Electricity

12 Questions to Ask When Shopping for an Electric Generation Supplier

Understanding Your Electric Bill  

Three Components of Electric Service

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