FirstEnergy seeks Duquesne Light customers with lower rate offer
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FirstEnergy's Bruce Mansfield power plant in Shippingport.
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FirstEnergy, the Akron, Ohio, energy giant that expects to close on the purchase of Greensburg-based Allegheny Energy in this quarter, is going after Duquesne Light's customers with an offer to provide electricity through its subsidiary, FirstEnergy Solutions.
The company is offering Duquesne Light residential customers a fixed price of 7.19 cents per kilowatt-hour on electric generation through December 2012. Duquesne Light's current rate for residential customers is 8.89 cents per kWh.
The new offer places FirstEnergy among a growing number of companies that have come forward to market electricity locally in a new regulatory environment designed to foster competition.
Historically, a consumer's utility company generated that consumer's electricity, transmitted it from the power plant to a local substation, and distributed it to that consumer's home. Under that arrangement, the amount that could be charged for generation was regulated by the state Public Utility Commission, as part of its oversight of utilities.
With the restructuring of the industry, many utilities sold off their power plants. Now any electricity generating company can supply electricity to the customers of any utility.
In theory, generation companies and marketers can charge as much (or as little) as they want for the electricity that they supply. In practice, the commission hopes that as customers learn to shop among suppliers, generation rates will fall.
The universe of available suppliers has grown dramatically during the phasing out of rate caps for utilities. Those caps ended across the state on Dec. 31.
"In the middle of 2009, we had about 45 licensed suppliers in the state," said commission spokeswoman Jennifer R. Kocher. "Now we have 170."
First Published January 19, 2011 12:00 am
