Met-Ed Customers Expect Higher Electric Rates in 2011
The Pennsylvania Public Utility Commission expects the average Met-Ed residential customer’s bill to increase by about 9.1 percent when the utility’s rate cap expires in December. That hike is based on wholesale electric prices that have, until recently, dropped based on the sluggish economy and customers who cut back on their power consumption.
A division of Akron, Ohio-based FirstEnergy, Met- Ed serves roughly 190,000 customers in York County. On Dec. 31, Met- Ed’s rate cap expires, and its customers will then pay full-market prices for their power. As of May, Met-Ed had completed three of its four energy auctions and had bought the lion’s share of the power it will distribute to its customers starting Jan. 1, 2011.
During the earlier part of this year, wholesale electric prices stayed low as more people cut back on their demand for power. Also, at the time, wholesale natural gas prices declined. Typically, natural gas is one fuel that power companies use in the generation of electricity. It was at that time that Met-Ed held its first three energy auctions. This fall, Met-Ed has scheduled its final energy auction. Once the final auction is held, competitive suppliers will be able to determine whether or not they wish to enter the market and offer electric customers in Met-Ed competitive electric rates.
Despite the slight uptick in national wholesale power prices, the PUC doesn’t expect a major change from its prediction of a 9.1 percent increase for Met-Ed customers. It is uncertain how the competitive market will look like for Met-Ed electric customers. Dozens of competitors are offering customers choice in PPL, another Pennsylvania utility area whose capped rates expired at the end of 2009.
