West Penn, Penelec to lower electric transmission rates on June 1st but still seeking large increase in revenues by January 1st

29 May 2024- With energy prices set to increase or decrease depending on service territory, the PUC encourages consumers to stay informed about these changes and evaluate their energy options, even if they already have a contract with a competitive electric generation supplier.

“Empower yourself this summer by staying informed and making smart energy choices,” noted PUC Chairman Stephen DeFrank. “With the upcoming price changes and higher electricity usage typical during the hot summer months, now is the perfect time to review your electric bills and supplier contracts, understand your rates, and explore all available options to save on energy costs.”

Consumers are encouraged to learn more about managing energy costs by visiting the Commission’s official electric shopping website, PAPowerSwitch.com, for competitive offers and energy-saving tips.

Price ‘Checkup’ on Electric Bills and Supplier Contracts

It is important for every utility customer to understand their electric generation supply charges, whether through default service or a contract with a competitive supplier.  Key questions to ask include:

  • How do competitive suppliers’ rates compare with the utility’s Price to Compare?
  • Is the supplier contract for a fixed or variable rate? If variable, what are the conditions for price changes?
  • Does the contract include monthly service fees, early termination fees, or other fees?
  • When will the contract expire, and what are the options as the end date approaches?

The PUC’s PAPowerSwitch energy shopping website provides consumers and small businesses with valuable information on how to shop for electric supply services.  It enables quick comparisons of offers from competitive suppliers against the default service rate from their local utility and provides guidance on switching suppliers or returning to default service.

Consumers are advised not to sign a contract without knowing the length, price, whether it is fixed or variable, and if there are any fees.  Information on fixed and variable electric rates is available on the PAPowerSwitch site.

June 1 “Price to Compare” Adjustments

All Pennsylvania regulated electric utilities are adjusting their Prices to Compare (PTCs) on June 1 for residential and small business non-shopping customers.  Customers not choosing a supplier continue to receive “default service” from the utility – with the utility setting a PTC per kilowatt hour (kWh) on a quarterly or semiannually basis.  The PUC approves a utility’s electric generation procurement plan, but does not regulate the price of the generation portion of the electric bill,  which is driven by wholesale market factors.

The PTC averages 40% to 60% of the customer’s total utility bill.  However, this percentage varies by utility and by the level of individual customer usage.  Beginning June 1, EDCs that have adjusted their PTCs for residential default service customers include:  

  • Citizens’ Electric: from 9.869 to 8.089 cents per kWh (down 18%)
  • Duquesne Light: from 10.46 to 10.37 cents per kWh (down .9%)
  • Met-Ed: from 11.306 to 10.404 cents per kWh (down 8%)
     
  • PECO: from 9.425 cents to 9.276 cents per kWh (down 1.6%)
     
  • Penelec: from 10.607 to 9.744 cents per kWh (down 8.1%)
  • Penn Power: from 11.231 to 10.389 cents per kWh (down 7.5%)
  • Pike County: from 8.1852 to 8.0590 cents per kWh (down 1.5%)
     
  • PPL: from 11.028 to 10.04 cents per kWh (down 8.9%)
  • UGI: from 9.978 to 10.525 cents per kWh (up 5.5%)
     
  • Wellsboro Electric: from 9.206 to 8.132 cents per kWh (down 11.7%)
     
  • West Penn Power: from 10.001 to 8.787 cents per kWh (down 12.1%)

For small business customers, the PUC notes that most EDCs are also adjusting their prices to compare in their small Commercial and Industrial rate classes. 

Standard Offer Program as an Option

Consumers may explore their utility’s voluntary Standard Offer Program (Standard Offer) – an alternative for default service customers not participating in the competitive electricity market. 

Standard Offer provides the option of receiving service from a competitive supplier at a fixed price that is 7% below the utility’s current PTC. The Standard Offer price is fixed for one year and can be canceled by the customer at any time with no early cancellation or termination fees.  Availability may vary by area.

Consumers should contact their utility or visit their utility’s website for more information or to enroll in a Standard Offer Program.

This all is set to come, however, as FirstEnergy pushes for a major price hike after these figures take place.

The Pennsylvania Public Utilities Commission is set to hold a series of hearings on the proposed hikes, which would largely reverse and eclipse the cuts made set to take place in June. The rate increases, the PUC and FirstEnergy (which owns most notably Penelec and West Penn Power’s grid systems) say, would result in increased revenues for the company of up to 34%.

The utility is seeking an annual increase in revenues of $503,848,000 (34%) for electric distribution services provided to customers in the Med-Ed, Penelec, Penn Power and West Penn Power Rate Districts, which serve about 2.1 million customers in 56 counties across the Commonwealth.

In the Penelec Rate District, a proposed revenue increase of $132,963,000 (28%) would increase the average monthly bill for a residential customer using 1,000 kWh per month from $200.96 to $220.75 (9.8%).

In the West Penn Rate District, a proposed revenue increase of $169,789,000 (40%) would increase the average monthly bill for a residential customer using 1,000 kWh per month from $156.36 to $172.98 (10.6%).