Deregulating or restructuring any sector of our economy is complicated, but restructuring an industry that produces something you can?t see or store, yet use everyday, is even more of a challenge. The electricity deregulating process in Pennsylvania may be confusing for some, but saving money by shopping around is something everyone can appreciate.

The Pennsylvania Public Utility Commission (PUC), as well as electricity suppliers looking to gain new customers in 2011, are doing their best to make choosing a new electricity supplier as simple as possible. Still a lot of confusion persists, so here are the five most common misconceptions about shopping for electricity.

1. Why are my rates going up? Aren?t electric companies just being greedy?

There are several reasons why most areas will see an increase in their electricity prices come January- but you can significantly limit this increase, and in some cases actually cut your electric bill thanks to competition. First, capped rates are being adjusted for inflation. Pennsylvanians were paying 12% less for their electricity in 2008 than they were in 1996. Second, rising manufacturing costs have made the process of generating electricity more expensive. For example, the cost of fuel rose rapidly from 1999 to 2008 (coal and natural gas increased by 200% and 300%, respectively).

In other words, we have been paying artificially low electricity prices for years while other goods have continued to increase in price. The auction process used to procure power for those consumers who do not shop is carefully regulated by the PUC to ensure utilities are doing all they can to purchase low cost power. Still consumers will get a better deal by shopping.

2. Is shopping for electricity really worth it? Will I save enough money to make it worth my while?

Yes! PUC Chairman Jim Cawley has made it clear that it is in the best interest of Pennsylvanians to shop, as the vast majority will save money. If you are shopping for residential electricity, it only takes about 10 minutes to switch. As of early December, PECO customers can save over $70 a year on electricity by shopping. Savings are even more pronounced for businesses that use services like or hire consultants to find the best deal. As January approaches, it?s likely that more competitors will enter the market driving rates lower.

3. My electricity company has always been good to me, why should I punish them by switching?

Shopping for electricity doesn?t punish your old utility, in fact it helps them. Electric utilities like Penelec, PECO, Met-Ed, and Allegheny Power used to be in charge of generating your electricity and delivering it to your home. But with restructuring, these utilities only get paid for delivering your electricity. So choosing an electricity supplier means the utility doesn?t have to shop for you. But if you choose not to switch providers they are required by law to purchase generation and pass it on to you without any markups.

4. Will I have less reliable electricity if I shop?

No, your utility will continue to provide reliable service to your door regardless of your electricity generation supplier. All power comes from the same electricity grid, and utilities cannot delay restoration of your power or discriminate against you in anyway for choosing a electricity supplier.

5.What happens if I shop and then my power goes out? Who do I contact?

You contact the same company you?ve always contacted. It?s still PECO, Penelec, Met-Ed, or Alleghany Power?s job to make sure electricity is delivered. If you have a delivery problem, you will contact them and not the company that supplies your electricity.

Competition in the electricity market is working.  Residential and commercial electricity rates are still a little higher than the national average according to the Energy Information Administration –12.58 cents compared to 11.32 cents per kWh for residents and 10.11 compared to 10.03 cents for commercial businesses. Yet, Pennsylvania?s rates are significantly below neighboring Mid – Atlantic States at 15.42 cents for residents and 13.61 cents per kWh for businesses.