The Pennsylvania Public Utility Commission is alerting consumers that many utilities are adjusting their energy supply prices this fall – including all PUC regulated electric utilities on December 1st – and reminding households to understand those changes, explore options to manage winter energy bills, and #CallUtilitiesNow to discuss affordability programs.
It is important for consumers to understand the two major parts of their monthly electric or natural gas bills:
- Generation/supply charge – This charge covers the cost of the energy (electricity or natural gas) used during the month – and this charge is influenced by whether a customer chooses to “shop” for their energy services. The energy cost for this portion of the bill is determined by a consumer’s contract with a competitive supplier or, for consumers who do not shop, the utility’s “Price to Compare” (PTC).
- Delivery/distribution charge – This charge includes the cost for the operation and maintenance of the poles, wires, pipelines and other infrastructure that delivers energy to your home or business. This portion of your monthly bill supports your local utility. Consumers may not shop for energy delivery/distribution services.
All Pennsylvania regulated electric utilities are adjusting their PTCs on December 1 for residential non-shopping customers. The PTC averages 40% to 60% of the customer’s total utility bill. However, this percent varies by utility and by the level of individual customer usage.
Beginning December 1, electric distribution companies report the following changes in their PTCs for residential customers:
- Citizens’ Electric, estimated decrease from 13.333 cents to 10.964 cents per kWh (-18%);
- Duquesne Light, estimated decrease from 11.45 cents to 10.46 cents per kWh (-8.6%);
- Met-Ed, increase from 10.24 cents to 11.306 cents per kWh (10.4%);
- PECO, estimated decrease from 9.672 cents to 8.919 cents per kWh (-7.8%);
- Penelec, increase from 9.703 cents to 10.607 cents per kWh (9.3%);
- Penn Power, increase from 10.556 cents to 11.231 cents per kWh (6.4%);
- Pike Co. Light & Power, increase from 7.3005 cents to 8.67 cents per kWh (18.8%);
- PPL, decrease from 12.126 cents to 11.028 cents per kWh (-9%);
- UGI Electric, decrease from 12.128 cents to 10.26 cents per kWh (-15.4%);
- Wellsboro Electric, decrease from 12.393 cents to 9.206 cents per kWh (-25.7%); and
- West Penn Power, increase from 9.929 cents to 10.001 cents per kWh (1%).
There are three key factors for every consumer to consider when preparing for winter energy bills:
- The cost of energy.
- The amount of energy you use.
- And “Mother Nature.”
It’s the combination of all three that drives the size of monthly utility bills. While consumers cannot control the weather, they can reduce energy use and shop for an energy supplier to lower their utility bills.
During cold weather months, the cost of energy used – either electricity or natural gas – can account for more than half of a typical customer bill, so the price of that energy is very important.
In purchasing electricity for default service customers, the PUC notes that electric utilities are required to meet a “prudent mix” requirement of spot market, short-term, and long-term purchase contracts. Plus, over time, the utilities must procure energy at the least possible cost to customers.
However, the Commission does not regulate prices for the generation portion of electric bills. Generation prices are separate from the closely-regulated rates that utilities charge for their distribution services – the delivery of electricity to homes and businesses.
For small business customers, the PUC notes that most EDCs are also adjusting their PTCs on December 1 in their small Commercial and Industrial rate classes. Among the state’s major EDCs, price changes in default service rates for small businesses will vary – ranging from PTC increases in the FirstEnergy service territories (Met-Ed, Penelec, Penn Power and West Penn Power) between 1% to 10% to an anticipated decrease of nearly 9% for small business customers in the Duquesne Light service territory.