Neighborhood electricity forum explains Jan 1. rate changes

    The meeting room in the back of the Chestnut Hill Library filled quickly on Monday night. Isolene Nelson broke up a meeting of her East Falls block association to get there on time. Homeowners came in bundled up in down vests and sweaters and hand-crocheted caps, filling the back rows, many with a wave to Larry Schofer, chair of education for Weaver’s Way Cooperative. Most had been drawn by flyers and emails announcing the forum’s topic: “What Consumers Need to Know in the New World of Deregulated Electricity.”

    Nelson said it was about time someone explained it. “I’ve been getting nothing but mail, and calls,” she told Newsworks. While electric power has been deregulated since 1996, a host of new Pennsylvania suppliers has cropped up this year, since the price caps granted by the Philadelphia Electric Company (PECO) will end January 1.

    Nelson said she’s been to PA Power Switch, the portal set up by the Public Utility Commission to help consumers compare the 15 companies now competing for our business. But with so many, including New York giant Con Edison and Spark Energy, it was a little daunting to sort out. “I like to be informed, so I got here early,” she said.

    Standing in front of the room, Larry Schofer, the chair of Weaver’s Way’s education committee, echoed Nelson. “We’ve all been deluged with mail, and calls… Some have even had a knock on the door. Has anyone here had someone knock on their door yet?” No hands went up, though many had seen Sunday’s Inquirer story about the hundreds of new “associates” being hired to sell electricity

    Schofer organized the event with Weaver’s Way and Chestnut Hill Rotary because “We all have questions about what’s next.” Standing beside him stood Blaine Martin, electricity program manager for The Energy Cooperative, a 30-year old energy supplier whose founders were also members of Weavers Way. “He’ll give us a little history and explain how it works, and answer our questions.” Only at the very end, Schofer promised, would Martin give his own sales pitch for why customers might want to choose his company.

    Martin started with a capsule history of electrification in Pennsylvania, from the plants built to power the Pennsylvania railroad and the “power wars” between Thomas Edison’s General Electric and George Westinghouse’s Westinghouse companies to the rise of the Philadelphia Electric Company, founded in 1881.

    Electricity was a regulated utility until 1996, when state officials saw benefits to consumers from deregulation in other states, Martin said. His company, a nonprofit that had long been providing heating oil to homes and businesses, got in with several energy plans, along with many others.

    However, he added, “a few years ago commodity prices started spiking, and almost every energy supplier left the market.” Now that the caps have expired, he said, electricity bills might jump sharply in the future — but for right now, companies like his can offer competitive plans.

    PECO will still be in the business of distribution after January 1, Martin explained to the group on Monday. “The power from the substation to businesses and homes will still come from PECO. That’s still a regulated utility. And your bill will still come from PECO. ” But the bill will look slightly different, “If you choose another supplier, you’ll see a PECO charge, a distribution charge, and then a line for another company, such as the Energy Cooperative.” For people just starting out, he said, “I would go to papowerswitch.com. That’s where you want to do electricity shopping.”

    Comparing prices

    A helpful price point to keep in mind is 9.92¢. Recently PUC spokesperson Jennifer Kocher told WHYY’s Susan Phillips that for at least the next year the consumer is in the driver’s seat. “The price to compare for PECO is 9.92¢ per kilowatt hour so that’s kind of the magic number. Anything below that can save you money or anything above that that’s offering a green product is also an option.”

    At Mondays meeting a woman cried out from the back of the room “How do we know what to choose?”

    Some criteria Martin recommended while we’re looking at the supplier list:

    Variable rate or fixed rate? “Some ppl are selling power month to month — which might sound great, you might be paying 7 cents a kilowatt hour right now. But in August it might double! The most expensive time to buy electricity is the summer – when providers have to start up the uneconomic generators, like diesel. That’s called a variable rate plan. Others offer six-month plans. But if you do that, then you end up in June at the mercy of the market.” PECO itself is switching to a quarterly structure: “If you look at your bill now, they’re charging 9.94 cents per kilowatt hour,” Martin said. “In January, they’re promising 99.2. But for spring they’re predicting 10.16, and next summer — they think it might be 11.4.” Martin’s company, like a number of others on papowerswitch.com, offers instead a yearlong fixed rate plan.

    Special discounts. For the next few years, PECO will continue to offer discounts for residential heating, and for those who have off-peak meters. “For these folks it might make sense to stay with PECO at least for awhile. “What about discounts to veterans and senior citizens?” Isolene Nelson asked. Martin said that his company does not offer them, nor does it have PECO’s program for low-income residents. Consumers need to research these issues carefully, he said.

    Cancellation fees. In general, you can switch providers at any time, Martin said. But some, if you commit to a contract, can charge a very stiff cancellation fee.

    Renewable or not renewable? Pennsylvania law requires that at least nine percent of your electricity come from renewable sources — wind, hydroelectric, solar or methane. The Energy Cooperative, he said, offers one plan with 100 percent, at 9.78 per kilowatt-hour, and one that’s 20 percent renewable, at 9.28. There are other suppliers of renewables including PECO Wind, a high-prestige product that goes for 2.5 cents/kwh over PECO’s standard rates. Martin listed a number of reasons to choose renewables, including climate change, air quality issues, and reducing demand on the dirtiest forms of power, such as coal plants and diesel turbines. But “if you’re only looking at cost,” a number of companies that don’t make renewables a priority, such as Spark and Con Edison, are offering lower fixed-rate contracts.

    The Energy Cooperative

    Martin then went into more detail about his company’s plan, including where it buys its power from and what it means to be a member. He swallowed hard when local artist Pesha Leichter confronted him about whether his company had the staying power to be reliable.

    “Last time there was choice,” Leichter said, “I switched from PECO, chose a provider that went belly up, got thrown back into PECO. Then I chose again – and I think I chose you, with that Energy Choice 20. Then you stopped, and you were only offering 100 percent, which I couldn’t afford. Is there any guarantee you can offer now?” Martin apologized for Leichter’s bad experience and said that his company wasn’t going anywhere.

    As the group broke up, many surrounded Schorer and Martin. Others filed out with the expressions of fifth-graders given a term-paper assignment. “I thought I’d stick with what I have, at least for now,” Leichter told Newsworks. “I don’t want to spend that much time thinking about my electric bill.”

    One thing was clear: everyone had a lot of work to do. “This process is very messy,” Martin said. “Everyone knows it. PECO knows it. But it’s what we’ve got.”

     

    Related links:

    FAQ on switching electricity providers

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