ELECTRICITY FACTS

Did you know that Pennsylvania residents have the right to choose from a wider range of electricity options, including prices, customer service, and benefits? As of now, that choice is being stifled and undermined, costing you in service, transparency, and innovation. The fact is – too many Pennsylvanians don’t even know they have that choice.

Choice in the electricity market provides consumers with new economically and environmentally valuable options unavailable through monopoly utilities; choice sparks innovative and responsive new solutions to consumer needs, and provides wide-ranging benefits to every consumer.

For example, a “predictable billing” plan offered by an electric retail supplier allows consumers to pay a flat amount, every month, all year long, protecting consumers from seasonal bill spikes.

Current Law

Based on widespread demand from residents and businesses, Pennsylvania’s Electricity Generation Customer Choice and Competition Act of 1996 (House Bill 1509) was intended to create electric retail competition. Prior to this legislation, the local electric utility companies were in charge of providing power to consumers within their service territory.

Under the 1996 legislation, consumers were given the ability to choose to purchase power from a competitive electric retail supplier or do nothing and continue to receive electricity service from the local utility. But the intent of the legislation was never realized. Because the utilities were allowed to “compete” with the new suppliers entering the market for the first time, robust competition and investment in innovative new energy options did not develop.

In the two decades since the law was passed, only a small proportion of Pennsylvanians have received their electricity through retail suppliers that are available to Pennsylvania households. In part, it is because the established utilities have made it hard for consumers to exercise their choice.

The Problem

One reason so few consumers have shopped for retail service is that the utilities remain firmly in the middle of the relationship consumers have with their chosen suppliers and consumers cannot easily see the value their chosen suppliers offer. The process to switch can be burdensome to consumers and is controlled by the utilities. And, once switched to the supplier of their choice, the utilities continue to bill consumers for not just the utility-delivery service they provide, but also for the supply service that suppliers provide.

Instead of seeing their new retail supplier as “my energy company,” consumers see the utilities as their energy company. Consumers don’t have an opportunity to build a relationship with their chosen suppliers. And because the utilities generally include the suppliers’ charges on page 4 of the utility bill, consumers who switch quickly forget that they did so. For consumers, their suppliers are “out of sight, out of mind.”

This kind of competitive barrier undercuts the competitive market’s ability to meet the needs of consumers with innovative electricity solutions, and undermines the spirit and intent of the law passed in 1996. Through their monopoly power, utilities have done everything they can to secure themselves as “your energy company,” even when they are not supplying your electricity.