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Check out today’s article in the Philadelphia Inquirer!
Posted on Sun, Dec. 12, 2010
Alternative suppliers can offer cheaper rates
By Andrew Maykuth
Inquirer Staff Writer
Skeptics of electric utilities – you know who you are – regard deregulation as kind of a three-card monte hustle.
How can alternative electricity suppliers sell power below a utility’s rate and still make a profit? The commodity they sell is identical – it’s all the same electrons. What’s the catch?
Peco Energy Co.’s 1.6 million customers can thank – or curse – the wonders of the electricity marketplace for inspiring an invasion of alternative suppliers bombarding the Philadelphia market with discount offers.
As Peco shifts into market-based rates at the end of the month, at least 17 suppliers are offering discounts of 10 percent and more to residential customers for electricity supply. Even more suppliers are targeting commercial and industrial customers.
They are able to undercut Peco’s default price because they are unhindered by the one-size-fits-all pricing that Peco must offer and can more nimbly navigate electricity markets, where prices shift by the hour and the season.
“Alternative suppliers could be buying for a different profile, a smaller audience,” said Cathy Engel, Peco’s spokeswoman.
Under Pennsylvania’s Electric Choice Act, which is being fully implemented Jan. 1 after a 14-year transition period, Peco and other traditional utility companies became solely distributors of power – “wire companies.” New Jersey and Delaware have undergone similar transitions.