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  Light on Savings Here are the best deals on Electric Choice so far, but there's no reason to sign up right away Sunday, October 18, 1998 By Ken Zapinski, Post-Gazette Staff Writer Pennsylvania's new electric choice program was supposed to generate savings for customers. Instead, it's generating a lot of heat. "I'm going goofy trying to figure out what's going on," complained Frank Cservak of Scott. "What I'm telling you is, pity the public," Harmony resident Jack D. Spink said. "Pity the public." Forcing electric suppliers to compete with one another for the right to supply you with power was supposed to unleash free-market forces to drive down electric rates. That hasn't happened yet. Lots of companies that regulators thought would compete for customers aren't doing it. Others say they want to sell you power, but they won't say for how much. And electricity shoppers aren't finding savings they hoped for. Laurie Montgomery of Murrysville found she could dump her current utility - if she wanted to pay more. "There's no choice out there," she said. "There's no one offering a cheaper price than Allegheny Power."
Indeed, that is what a Post-Gazette residential price comparison survey has found. The typical Allegheny Power customer who switched to a new supplier would lose money. But at least Allegheny Power customers can console themselves with the fact that they are already paying the lowest electric rates in the state. Duquesne Light's 580,000 customers in Pittsburgh and surrounding areas are paying some of the highest, and so far, they're not seeing much relief. For the typical Duquesne Light residential customer, Exelon Energy is the most cost-effective choice. A typical customer might save about 13 cents a day, or just under $50 a year. That's less than half of what Public Utility Commission regulators predicted. The PUC knows there is a problem. Duquesne Light, working with the PUC, announced on Friday it would sell 600 megawatts of power - more than its share of the production at the Beaver Valley nuclear plant - to outside suppliers at a wholesale price low enough so that consumers should be able to save more than 10 percent on their bills. That would be about twice the savings that Exelon is currently offering. "We wanted to make sure the marketplace in Duquesne Light [territory] had an opportunity to develop quickly so customers could receive the savings they deserve," PUC Chairman John Quain said. Blame the rocky start of electric choice on a number of things, including a June heat wave. The summer weather across the Midwest caused a temporary shortage in electricity that pushed wholesale prices hundreds of times higher than normal. The roiling market, in turn, made power suppliers skittish about signing up thousands of customers at low prices in case the same thing were to happen again. The failing prospects of the proposed merger of Duquesne Light's and Allegheny Power's parent companies didn't help either, because the rules of competition would depend on the outcome of the deal. Blame it, too, on the fact that households just don't use enough electricity. Many companies are eager to compete for lucrative commercial and industrial accounts. Far fewer are willing to spend the money and hire the people to attract small-usage residential customers. Still, there is one thing to keep in mind. The program is just beginning. Customers (except for those who are in the electric choice pilot that began last year) can't start receiving power from their new supplier until January. Many who have enrolled in the electric choice program have been frightened by the Nov. 1 date included in information they received from their local utility, believing that they must choose a new supplier by that date or forever lose the chance to shop around. That is not the case. The choice program is a permanent change to the state's electric utility industry that will be phased in between now and January 2000. Customers will be free to choose a new supplier whenever they wish, just as they do their long-distance telephone carrier. The Nov. 1 date is the deadline for people who want to start receiving power from a new supplier as soon as they can in January. But with the savings available now so small, there is little risk in staying with your current utility for a few months to see if prices fall. And help may be on the way. The Philadelphia-based Energy Cooperative Association of Pennsylvania, a buying group, is trying to expand into the Pittsburgh area (412-521-1525). The cooperative wants to negotiate a deal with one or more suppliers in which the supplier offers a discount rate to those in the co-op. Thousands of people acting together have a better chance of cutting a good deal than an individual, says co-op manager Christopher van de Velde. Former PUC Commissioner John Hanger, who helped prod the state to bring competition to the utility industry, is disappointed in the way things are shaping up. But it's early, he said. And the legislative reform of the electric industry did more than just bring competition. It froze current rates for up to nine years. And it permitted the PUC to take a harder look at what utilities had built into their rates. The PUC was able to identify literally billions of dollars lingering on utilities' books from the construction of nuclear power plants and other investments. The PUC then limited how long utilities would be able to keep collecting these so-called stranded costs. In most cases, the deadline is 2005, at which time electric rates should drop substantially. If that were the only thing the industry reform accomplished, Hanger said, it would still be valuable.
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