New plan to help fight higher electric rates

November 16, 2009 8:01:34 AM PST
In today's tight economy, the last thing you want is for your bills to go any higher. But that's exactly what will happen when the electricity rate caps expire. PECO customers, your electric bill could go up as much as 20-percent when federal rate caps expire on January 1st, 2011, that's the prediction from PECO itself and the Pennsylvania Public Utilities Commission.

"I'm pretty upset about it," said Lorraine Dohrmann of Havertown.

PECO says right now the price for electricity per kilowatt hour is about 15-cents.

The average household uses 1,000 kilowatt hours a month, the equivalent of roughly 150-dollars a month. The rate increase could add to that as much as 30-dollars!

"I don't like it but I don't think there's much I can do to change it," said Warren Jenkins.

But maybe there is PECO says to help ease the pinch later you can enroll now in its new program called "Early Phase-In".

"Customers would pay a little bit more each month, based on their energy usage, and that money, PECO would put in what we're calling an energy savings account," said Cathy Engel of PECO.

Let's stick with the example where you use 1,000 kilowatt hours a month. For the rest of this year, you would pay an extra 5-dollars a month into the program, next year, in 2010, it would be an extra 10-dollars a month.

On top of that PECO would give you 6-percent interest compounded monthly.

In this example all of that could total 160-dollars. Come 2011, PECO would then divvy that up and apply it as credit to your monthly bills over the next two years.

"All of the money that's accumulated will be applied to customers' bills beginning January 2011 to help offset any price increases."

"All it does is put a small band aid on a gaping scar," said Lance Haver, the director of Philadelphia Consumer Affairs.

He says it would be smart for folks who can afford it to participate in the program but he's worried about the bigger picture. Haver says the removal of rate caps in other areas, like Maryland or even Pike County, Pennsylvania have resulted in bill increases of as much as 70-percent!

"The real problem is what's going to happen when the rate caps come off and people can't afford to pay. We should be preparing for that and not just telling people to prepay now."

PECO's Early Phase-In program is voluntary and you can opt out at any time.

If you do opt out the money you've accrued in the Early Phase-In program will be applied to any outstanding balance. If there is no balance or you've moved and are no longer a PECO customer, you'll get a refund check.

All this does not affect PSE&G or Delmarva customers. Their rate caps have already expired.

PECO News Releases on Rate Caps Expiring:

Earn 6 % Interest from PECO to Help Pay Your Energy Bill

PECO's Early Phase-In option, approved today by the Pennsylvania Public Utility Commission (PUC), will help customers begin to prepare for the end of rate caps on January 1, 2011. With Early Phase-In, customers have the option of paying a little more each month beginning July 2009. Those payments, plus 6 percent interest paid by PECO, will be applied to customer accounts beginning in January 2011 to help offset any price increase.

"Our customers are looking to us to help them as rate caps expire," said Denis O'Brien, president and CEO of PECO. "Our Early Phase-In program will give customers peace of mind, knowing that they can do something now to prepare for the impact of the end of rate caps. It also makes their energy dollars go further with the 6 percent interest from PECO."

Customers participating in the Early Phase-In program would pay an additional half-cent per kilowatt-hour (kWh) of energy use beginning in July 2009 and an additional penny per kWh of energy use beginning in January 2010. For example, a residential customer using 1,000 kWh of electricity monthly would pay an additional $5.30 a month beginning July 2009 and $10.70 a month in 2010. This customer would receive $9.70 credited to their account each month in 2011 and $4.86 credited to their account each month in 2012.

Enrollment in Early Phase-In begins in May. Residential and smaller commercial customers, with accounts in good standing, can choose to participate in Early Phase-In. Customers also can choose to leave the program at any time and receive a full credit, with interest. Additional details regarding the program and enrollment options will be included in customers' May bills.

Early Phase-In participants also can still choose to purchase their electricity from a retail energy supplier. Participation in the program will not affect a customer's price to compare ? the price used to compare offers from other electricity suppliers.

In addition to Early Phase-In, PECO offers many programs to help customers. The budget billing program makes short-term fluctuations in monthly bills much easier to handle by dividing annual energy costs evenly throughout the year.

The company also manages the largest and most comprehensive low-income assistance programs in the state. Each year PECO provides assistance to about 180,000 low-income customers through programs like the Low Income Home Energy Assistance Program (LIHEAP), the Low Income Usage Reduction Program (LIURP), the Matching Energy Assistance Fund (MEAF), Customer Assistance and Referral Evaluation Services (CARES), and the Customer Assistance Program (CAP).

The Early Phase-In option is part of PECO's comprehensive strategy to help customers manage the transition to market-based rates. Other elements include: plans to buy electricity that will result in the lowest prices for customers; expanded assistance for low-income customers; energy efficiency tools, information and rebates; and support for a healthy retail energy market in Pennsylvania.

For more information visit www.peco.com or call 1-800-494-4000.

SIGNED . . .SEALED . . .DELIVERED!

PECO has finalized a plan that will result in the lowest electricity prices for customers when rate caps expire on January 2011. The plan also provides $7 million in additional energy efficiency assistance for low-income customers. Agreed to by consumer advocates, industrial users and others, the plan was filed today for approval with the Pennsylvania Public Utility Commission (PUC) and is part of PECO's comprehensive program to address the needs of customers in 2011 and beyond.

"This is a very good day for all PECO customers," said Denis O'Brien, president and CEO of PECO. "We know our customers are concerned about how the end of rate caps will impact their bill. With this plan we can begin purchasing electricity in the near future, taking advantage of current lower prices. We also will make those purchases in a way that will provide the best prices for our customers. And, we will provide even more assistance to customers through energy efficiency and weatherization, which benefits the environment as well."

The plan includes:

A robust strategy to buy electricity at the lowest prices

PECO will take advantage of current wholesale market prices by beginning to buy electricity for its customers in June. The company will buy electricity at several different times, reducing the risk to customers of purchasing electricity all at one time, when market prices could be high.

Specifically, PECO will buy electricity four times between June 2009 and the fall of 2012. PECO's purchases will include both short-term and long-term contracts, as well as some hourly priced purchases.

The electricity that PECO buys will be available to customers who do not choose to purchase their electricity from a retail energy supplier. PECO will continue to ensure the safe, reliable delivery of electricity to all customers regardless of whether or not they purchase electricity from another supplier.

Significantly expanded programs for low-income customers

PECO, which already manages the largest and most comprehensive low-income programs in the state, will significantly expand those programs as a result of the settlement. PECO's Customer Assistance Program (CAP), which provides discounted rates to qualified customers, will be expanded from four to six rates to provide more targeted assistance.

PECO also will spend an additional $7 million during the next four years on energy efficiency, conservation and weatherization programs for low-income customers. This is in addition to the $5.6 million currently spent each year through the Low Income Usage Reduction Program (LIURP).

Easing the transition to market-based rates

PECO committed to working with retail electric marketers to support a healthy retail energy market for Pennsylvania. The company also will provide customers with helpful information on the competitive energy market and retail energy suppliers.

Beyond this filing, the company will continue to develop programs to help customers manage the transition to market-based rates. These would include energy efficiency tools and information, rebates, and the option to phase-in any price increases.

PECO's Early Phase-In proposal is currently being reviewed by the PUC. Through Early Phase-In, customers would make advance payments beginning in July 2009. Those payments, plus 6 percent interest paid by PECO, would be applied to their account beginning in January 2011 to help offset any price increases.

Organizations that worked with PECO to achieve the settlement included the Office of the Consumer Advocate, Office of the Small Business Advocate, the Philadelphia Area Industrial Energy Users Group, the City of Philadelphia, the Retail Energy Supplier Association and others.

A complete copy of the settlement is available at www.peco.com/KNOW.

House Bill 20, outlines early phase-in programs


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