No doubt businesses and residents served by PECO will have a lot to learn as they begin to shop for their electricity as rate caps expire in January. But customers in Allegheny Power’s territory will have to deal with rate cap expiration and a merger with First Energy.
The Pennsylvania Utility Commission (PUC) is currently reviewing the proposed merger of Allegheny Power and First Energy?First Energy is the parent company of Penelec, Penn Power and Met Ed. If the merger is approved, First Energy will serve roughly one-third of Pennsylvanians, and become one of the largest utilities in the nation.
How will the merger affect customers in these regions and what can they do to ensure they retain the ability to shop for lower electricity prices? It?s a question that is up for debate with innovative proposals from competitive suppliers looking to gain customers, the utilities involved, and consumer protection groups.
Penelec, Met-Ed, and Allegheny Power are distribution companies that will soon become default providers of generation once rate caps expire. This means the companies will continue to deliver electricity, but a customer may choose to buy their electricity (or generation) from a competitive supplier.
Competitive supplier, Direct Energy has proposed a public friendly auction of all First Energy customers including Allegheny Power?s, where companies could bid to serve blocks of consumers. This plan would also create a separate billing company and up to a $500 credit for customers.
Another alternative, proposed by First Energy, is to place First Energy as the default supplier of all customers in their territory. In other words, First Energy would be the default supplier while Met-Ed, Penelec, and Allegheny Power would only function as distributors of electricity.
Finally, some citizens are going the extra mile to make sure the merger addresses their concerns. Energy Consumers First is a new group looking to ensure customers are provided with accurate and timely information during the merger and rate cap expiration in January. The group supports the plan offered by Direct Energy because they are worried about the size and scope of First Energy. They are urging the Pennsylvania Utility Commission to support the auction plan and are encouraging residents to write letters and sign an online petition to pass the Energy Consumers Bill of Rights.
Either way, consumers in these regions will benefit from some type of rebate as Allegheny Power plans to provide around $11 million in rebates over 3 years thanks to a more diverse portfolio of power plants and the large contiguous reach of First Energy. Consumers will also benefit from a distribution rate freeze until 2012.
Apart from the concerns over default suppliers, customers can expect a healthy array of competitors to enter the market, offering deals below Allegheny?s 7.008 cents per kWh and Penelec?s 7.03 cents per kWh price-to-compare.
