PECO Energy is a utility company who delivers electricity to 1.6 million customers in Pennsylvania.  On January 1, 2011 they will be increasing their rates by about 10%.

January 1, 2011 marks the expiration of rate caps that were enacted in 1997.  PECO energy customers will more than likely also see their generation rates increase as the capped rates expire and they move to PECO electric generation default rates.  Customers will be able to find lower generation electric rates with other electric companies.

It is important for people to understand that PECO Energy is still a regulated company.  PECO is responsible for the delivery of power to their customers, but they are not responsible for offering low generation rates.  People who wish to remain “loyal” to PECO by staying with their electric default rates are poorly misinformed.  Those who shop and buy lower electric rates with other electric companies will have lower electric bills, but they will still receive their monthly electric invoice from PECO.

PECO electricity customers will be able to offset the 10% increase that PECO is imposing on their delivery charges by shopping for lower generation electric rates, which makes up about two-thirds of the bill.

Best PECO Competitive Electricity Rates (updated daily):

Philadelphia electricity users are customers of PECO energy, who provides electric supply service as well as electric delivery service for businesses and households in the city.  While PECO energy will remain the electric delivery company for these electric users, many customers will change their electric supply company in 2011 when PECO’s capped rates expire.

Starting January 1, 2011, commercial and industrial energy users in Philadelphia who do not choose an alternative energy company to supply their electricity needs will be on the PECO default electric rates.  Most businesses in Philadelphia will find in advantageous to shop and compare Pennsylvania electricity companies.

Large Commercial and Industrial electricity users in the PECO territory (whose KW demand is greater than 500KW) will pay a default price to compare rate of $0.0897 per kilowatt hour, if they elected to go with the fixed default electric rate.  If they did not elect for the fixed default rate, they will be forced to ride the volatile hourly ahead market rates.  Large electricity users in Philadelphia have bee offered fixed electric rates of $0.072 in recent weeks, a price 19.8 percent less than the PECO price to compare default rate.

Small and medium commercial customers in PECO will not know their exact price to compare rate until later in the year.  It is estimated it will be between $0.09 and $0.095 per KWh in 2011.  The number of electricity companies offering competitive rates to these customers will increase as 2011 approaches.  Savings are expected to be between 8-15% off of the price to compare default rates.

Update:  We have received numerous reports from our partners at Electric Rate that businesses are seeing significant savings with competitive peco commercial rates for contracts starting in 2011.

If you are looking for competitive electric rates for your home, we would recommend the below:

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.