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6 Things Pennsylvania Businesses Should Know About Utility-Provided Default Electric Service

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Recently, Senate Bill 1121, known as the Electric Competition Benefits Enhancement Act, was introduced to Pennsylvania via Senator Bob Mensch. The Act is a big step forward to implementing a fully competitive electricity market for the Keystone State’s energy consumers, both residential and business. For more information about the Act, you can read one of our previous blog articles.

I want to take a moment to share 6 Things Pennsylvania Businesses Should Know About Utility-Provided Default Electric Service:

  1. Utility default service rates are not the cheapest. Since the end of rate caps in 2010, PA consumers that stayed on default service have been overpaying for electricity.
  2. Utilities are guaranteed recovery of all costs, so they pass any miscalculation of supply and billing lag costs onto their default service customers.
  3. Customers that shop also have access to benefits such as buying renewable power and other innovative products to meet businesses’ unique energy needs.
  4. Less people shopping due to utility-provided default service limits the size and scope of PA’s energy market.
  5. Dozens of Electric Generation Suppliers (EGSs) are actively serving customers across PA, but only one third of Pennsylvanians are shopping for electricity. There is a lot of untapped opportunity for EGSs to make the kind of investments to deliver truly innovative product and service offerings in the state. This is reflective of basic economics: supply=demand.
  6. Default service keeps consumers focused only on price savings relative to the regulated utility rate – known as the Price to Compare. Therefore, customers often don’t consider other value-added offerings aimed at improving their buying experience.

Senate Bill 1121 aims to create a robust, sustainable competitive retail electricity market for all PA consumers – both residential and business. There is a website dedicated solely to this legislation. I urge you to visit it and if you’re in support of the bill, please take action with your legislators, and/or email me.

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Posted: November 13, 2013