For the majority of Pennsylvanians, electric competition has been a success. With the average electricity rate down from 15 percent to 12 percent above the national average, electricity is getting cheaper while almost everything else from groceries to gas is rising in price. On the other hand, industrial customers have not fared so well. While commercial and residential rates have fallen, industrial rates have actually increased.

In a hearing conducted by the state House Committee on Consumer Affairs, David Ciarlone, Vice President of the Industrial Energy Consumers of Pennsylvania (IECPA), testified on rising industrial rates. In one year, from 2009 to 2010, rates for industrial customers increased $6 million or 72 percent. Such volatility could lead to more manufacturing fleeing the state.

In one example, a manufacturer located in Lancaster County calculated that for every dollar spent on electricity their competitor was paying $0.78 in 2009. By 2010 the gulf had widened significantly with the competitor paying between $0.53 and $0.63 on every dollar.

Mr. Ciarlone recommended following Ohio?s lead. The Buckeye state charges a one dollar surcharge dedicated to an economic development tariff for job retention and creation. The fund offsets manufacturer’s high electric bills. Other states offer direct concessions to industrial consumers.

But not all parties at the hearing agreed with Mr. Ciarlone, ?Deregulation has worked across the board, except for large manufacturers,? said state Rep. Bob Godshall, the committee chairman. ?Residential prices have come down. I?m not willing to go back to the regulated market where manufacturers were heavily subsidized.?

Pennsylvania’s electricity rates were lower than the rates of all other Northeastern states in 2010. And 40 percent of customers, representing 68 percent of load, have chosen an alternative electric generation supplier.

So what is the market solution for industrial customers? That remains to be seen. While demand response programs that curtail electricity based on high prices or emergency needs can lower industrial rates, their affect thus far appears limited. Likewise, Pennsylvania?s new wealth of natural gas has caused some to speculate that the wealth of cheap in-state generation could help lower electricity rates in the future.

While the electricity market will not benefit all residents equally, there can be no doubt that more control and choice for customers is a good thing for the majority of Pennsylvanians.