Prices Drop In Fifth Round Of PPL Power Purchases For 2010

The Public Utility Commission this week approved the results of the PPL Electric's fifth round of electricity purchases for residential and small-business customers who do not choose their own supplier. Average prices for residential supply purchases were 19 percent lower than the average price achieved in the first four rounds.

 

Lower wholesale energy prices make it likely that PPL Electric Utilities customers will experience a smaller than anticipated 2010 price increase.

 

If prices in the last round of purchases, scheduled for this October, match the lower prices received in this round, the company estimates the average residential customer bill would increase by 30.4 percent in 2010. This is down from the previous estimate of 36.1 percent, which was based on the average of the first four rounds.

 

“These results reinforce the fact that electricity prices rise and fall in a competitive market,” said David G. DeCampli, president of PPL Electric Utilities. “By completing our purchases over a three-year period, we have been able to reduce the risk of price spikes for our customers and blend prices from a diverse group of suppliers.”

 

If prices in the fall reflect the lower prices in this round of purchases, estimated monthly bills for small-business customers would increase on average about 18.9 percent, down from the previous 25 percent estimate. Monthly bills for mid-size business customers would increase on average about 36.8 percent, down from a previous estimate of 44.3 percent.

 

In each round of purchases, the company signs contracts to buy about 850 megawatts of generation for residential, small-commercial and small-industrial customers. Electricity supply for large-business customers who do not select an alternative supplier will be purchased in one purchase this fall.

 

State law requires PPL Electric Utilities, which does not own power plants and does not generate electricity, to buy default electricity supply from the competitive market for its customers who do not select an alternative supplier. The company must pass the costs through to customers without profit.

 

The company is doing that for 2010 under a plan approved by the PUC in 2007. The company has proposed a separate plan, which must still be approved by the PUC, to purchase electricity for 2011 and beyond.

 

“Under current market conditions, our customers may find greater opportunities to shop for better deals from retail electricity suppliers in 2010. And, based on current forward electricity prices, 2011 prices could be even lower than what we are now seeing for 2010,” DeCampli said.

 

He said the PUC’s “Utility Choice” Web site, www.puc.state.pa.us/utilitychoice, can help customers find alternative suppliers if more opportunities arise. The Web site lists alternative suppliers serving utility service territories.

 

“We are required to provide a default supply option that customers can fall back on, but we encourage customers to take advantage of lower-price offers that may become available from alternative suppliers to help them reduce their bills,” he said.

 

 

“Customers can do even more to smooth the transition and control their costs by using energy wisely and more efficiently,” DeCampli said. “Simple steps can go a long way toward reducing electric bills and don’t have to mean big sacrifices in comfort and convenience.”

 

DeCampli said the company’s online Energy Analyzer helps customers better understand how they use energy. Customers can find their daily and hourly usage information, provided by the company’s advanced metering system.

 

The Energy Analyzer allows customers to identify savings opportunities and experiment with changes in their home to see the difference it makes in reducing their electric bills. Nearly 280,000 customers have used the Energy Analyzer since its introduction two years ago.

 

 

In addition, homeowners who have their home’s energy use evaluated by a certified energy auditor can receive up to $250 in rebates from PPL Electric Utilities. Analysts take a whole-house approach, looking at insulation, air infiltration, heating and cooling systems, lighting and appliances. Details and a list of certified auditors under the rebate program are available at PPL website.

 

 

PPL Electric Utilities currently offers an advance-payment phase-in option that lets residential and small-business customers adjust gradually to higher electricity prices over several years. About 140,000 customers signed up for that option last year.

 

PPL Electric Utilities has asked the PUC for permission to offer residential and small-business customers a second option for spreading out the impact of higher electricity prices. That plan, which must be approved by the PUC, would allow customers to defer a portion of the 2010 price increase for one to two years, depending upon how much electricity they use.

 

In addition, he said, PPL Electric Utilities plans to offer a time-of-use pricing option to all customers in 2010. With time-of-use pricing, customers can reduce their bills by saving electricity at times of peak demand, when electricity costs more to generate.

 

“We are giving customers more choices and more options for taking control over their electricity bills,” DeCampli said.

 

For more information, visit the PPL Electric website.