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Deregulation Q&A for PECO Customers

With the expiration on Jan. 1 of the last remaining electricity generation rate caps in Pennsylvania, full electricity deregulation has finally made its way to customers of PECO Energy Co., the state’s largest utility.

As a result of deregulation and the expiration of the rate caps, some 1.6 million PECO customers in Southeastern Pennsylvania now have the power to choose which electricity provider they buy electricity from.

Although deregulation is actually pretty simple, the subject can be a little confusing for customers that come from a regulated or partially-deregulated energy market, so here are a few answers to some of the most common questions about the new deregulation affecting PECO customers.

Do I have to find a new electric provider?

No. You can remain a PECO customer if you wish, and you don’t have to “switch” to a competing electric provider.

What happens if I stay with PECO?

If you remain a PECO customer, you will get PECO’s “default service” and pay its “price to compare” for your electricity, which is currently set at 9.92 cents per kilowatt-hour through March 31 and is scheduled to be adjusted quarterly, once every January, April, July, and October.

Why should I “switch” to a competing electric provider?

Switching to a competing electric provider, like Spark Energy, could save you money. If you stay with PECO, your monthly electric bill will increase by about 5 percent due to rising electricity delivery costs, and PECO has the option of raising rates three times again this year, once in April, July, and October.

How much money can I save by switching?

For each one-cent decrease in your electric rate, you stand to save about $1 dollar a year for every 100 kilowatt-hours of electricity you use. Therefore, since the average PECO customer uses about 9,000 kilowatt-hours of electricity each year, every penny saved on your electric rate will translate into about $90 a year in savings.

Sources

Questions and Answers on Electricity Rate-Cap End, The Philadelphia Inquirer, Jan. 3, 2011.

The Pennsylvania Public Utility Commission, PA Power Switch brochure.

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