Pa. improves performance among competitive electric markets
The agony over a spike in power bills during last year's polar vortex didn't hurt Pennsylvania in an annual report that grades the performance of U.S. states and Canadian provinces that have opened their electric markets to competition.
The state's response to complaints from electric customers about unusually high bills and marketing practices of some competitive suppliers may have helped Pennsylvania maintain its No. 3 rank in the residential market and move up from fourth to second in commercial and industrial.
Pennsylvania regulators implemented a series of rules that were intended to provide customers with better information about competitive rate plans and to protect them from being unexpectedly hit with a surges in their electric bills when cold-weather drives up prices.
“In our world, I think the polar vortex had a profound effect on our customers' shopping experience,” Robert F. Powelson, chairman of the Pennsylvania Public Utility Commission, said during a conference call about a report Tuesday.
The Annual Baseline Assessment of Choice in Canada and the United States, or ABACCUS, grades the electric markets on choice and quality. It takes into account some of 49 factors, including the number of people who switched, consumer education and options available to consumers in the marketplace. The report is produced by the Distributed Energy Financial Group LLC, a Houston-based firm focused on retail energy consumers.
Pennsylvania's residential market score rose from 64 to 65 from 2014 to 2015, and its rank remained at No. 3 among 15 U.S. states, the District of Columbia and two Canadian provinces that allow consumers to choose their electric service suppliers.
“Markets are working when regulators and policymakers give competition a chance,” said William Massey of COMPETE Coalition, a Washington, D.C.-based group that advocates for competitive electricity markets. “It drives prices to their lowest available levels.”
Pennsylvania rose from No. 4 to No. 2, tying Illinois, and its score rose from 64 to 69 for its commercial and industrial market competitiveness. Texas ranked first in both categories.
Pennsylvania began phasing in electric choice in 1997. There are 419 competitive suppliers licensed in the state, said Nils Hagen-Frederiksen, a spokesman for the PUC.
The state's score in the annual assessment improved despite a 3.7 percent decline in the number of residential customers participating in electric choice markets last year. Some returned to their local utility, such as Duquesne Light and West Penn Power, because of displeasure with competitive suppliers when their bills surged during extreme cold in January and February 2014. Many had signed up for variable rate plans. These plans fluctuate with the price of electricity in open markets. Some of those customers saw monthly bills that were three to four times their normal levels. Some said they were unknowingly switched to variable rate plans.
Since the polar vortex issues, the number of people switching to competitive suppliers has dwindled. The number of residential customers who had switched to competitive suppliers fell from 1.86 million in January 2014 to 1.71 million in June.
The PUC responded last year by implementing accelerated switching, which allows customers to change competitive suppliers in three days as opposed to 30 to 40 days.
It is also requiring suppliers to provide more disclosures about their products, including when contracts are set to expire, and it requires the logos of suppliers to be included on electricity bills.
Tory N. Parrish is a staff writer for Trib Total Media. She can be reached at 412-380-5662 or email@example.com.