Pennsylvania Market among the Most Improved

The 2011 ABACCUS study, an annual assessment of competitive electricity markets, finds Pennsylvania and Illinois are the most improved electricity markets, but they still have a long way to go.

ABACCUS ranks commercial and industrial markets as well as residential markets in North America. Illinois ranks second most competitive in the commercial market and seventh in the residential market. Pennsylvania ranks fourth in the commercial market and third in the residential market with an excellent rating, the same rating given to Texas and New York.

In Pennsylvania’s first full year of residential competition, 1.4 million customers began shopping for electricity. As of November, 92.3 percent of industrial customers are exercising electric choice with 33 providers. Almost 20 percent of residents in the Keystone state are shopping from the same 33 electricity suppliers with 55 different product offerings.

In Illinois, 94.4 percent of industrial customers are shopping from 26 suppliers. The residential market has lagged the success of Pennsylvania’s because of the state’s highly subsidized residential rates before rate caps expired. Today, real-time pricing is slowly strengthening competition.

Product differentiation in residential markets is beginning in Illinois and Pennsylvania. Constellation Energy, which Exelon is in the process of taking over, offers Consert a user-friendly residential energy management solution that allows consumers to conserve energy and offer it back as additional capacity. Direct Energy offers Comfort Club to residential Pennsylvanians to bundle electricity with heating and air conditioning tune ups and safety checks. And PPL EnergyPlus offers an online billing platform that puts customer hourly load and pricing information at the fingertips of its commercial and industrial customers.

Innovation in the electricity market isn’t just reserved for the most improved markets. New consumer products and services are a constant feature of the most competitive markets. Energy suppliers in Texas have developed prepay offerings coupled with the use of advanced meters and mobile communications. Direct Energy’s Power-To-Go offers prepaid electricity to residential Texans with a new payment channel, pay as you wish, and daily text updates. In New York, consumers can select fixed-price contracts with periods of two to 60 months and green content at levels of 25, 50 or 100 percent renewable content. Improvements in advanced metering, transmission system upgrades and continued innovation in internet and telecommunications products ensures consumers will continue to see steady stream of new products and services.

To continue improving the electricity marketplace in Illinois and Pennsylvania, the ABACCUS report recommends phasing out default electricity. Not surprisingly, the Pennsylvania PUC is already investigating the possibility of phasing out default service. If the PUC decides to pursue this policy Pennsylvania could be the most improved market again in the 2012 ABACCUS report.

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Written by The Electricity Guru

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