PECO has announced that their default price to compare option for residential customers will drop on September 1, 2023. However, despite this news of a lower PECO electric rate this fall, substantially lower competitive rates are being offered by Pennsylvania electricity suppliers that can result in customers saving a bundle on their monthly electric bills.

In June PECO customers on the default rate experience a sharp increase in the price the pay for electricity as it went up to 10.3¢ per kWh. That rate will drop on September 1, 2023 to 9.672¢ per kWh. While some PECO customers are celebrating the 6.2% rate reduction in a time of rising costs due to high inflation, the reality is that these customers can save a whole lot more if they take the time to learn about electricity choice in the PECO service area and rest of Pennsylvania.

While the new PECO price to compare rate will drop to below 10¢ in September 2023, multiple competitive rate options can be found below 9¢ and even below 8¢ in some cases. Customers on the default rate should search for the lowest PECO electric rates in order to maximize their potential electricity savings.

The Pennsylvania Office of Consumer Advocate released a report on July 1, 2023 indicating that only 21.5% of PECO Energy customers were purchasing their electricity from a competitive supplier. ElectricRate.com, an energy comparison platform, is showing competitive Pennsylvania electricity rates yielding savings from 14% to as high as 30% against the default rate. It’s hard to believe but the reality is that 78.5% of PECO Energy customers are missing out on the ability to a tremendous amount of money on their electric bills.

While the PECO default rate did remain quite low in 2021 and into 2022, current competitive prices have remained well below the price to compare in 2023. After the September rate adjustment the next one will not occur until December 1, 2023 and there is not a lot of data to indicate that the price will drop significantly or at all.

Locking in a competitive PECO electric rate will save consumers money right away as well as protect them from further PECO rate hikes. Even though the PECO default rate is going down by 6% in September, the trend over the last year has been for the rate to increase, making it all the more important to secure a low fixed rate now to avoid fluctuating PECO electric bills over the next one or two years.

PPL Electricity Rates June 2023 by Todd Yasbin

If you live in Pennsylvania and have not educated yourself about the energy choice laws in the state then you are missing out on a bunch of savings. Put another way, if you haven’t taken the time to shop for lower electricity rates, then you are vastly overpaying on your monthly electric bill.

While technically speaking electricity choice has been around in Pennsylvania since the early 2000s, it wasn’t until the beginning of 2010 when people throughout the state really started to take notice. It was then that a decade long low price lock in the state’s second largest electric utility expired and opened up the floodgates of new electricity suppliers entering the state market.

Pennsylvania Power & Light (PPL), the utility company that delivers power to around 1.2 million customers throughout the central part of the state, had to increase their default rate for electricity generation supply. The previous default rate had been locked in a decade prior when wholesale energy rates were very low. When the rates finally expired, wholesale rates were now much higher and caused the price their customers were paying to increase around 20% overnight.

1. The previously low rates had two major effects on Pennsylvania electricity choice:
   For the first decade of the 21st century, competitive electricity suppliers could not offer rates to customers below the default rate and thus didn’t bother entering the market.
2. Because rates were low customers didn’t feel the need to educate themselves about electricity choice. They may have read an article that a new law created a new energy choice market in Pennsylvania, but from their perspective nothing had changed. They still received their bill from their utility and there were no other companies marketing their service.

But that changed in 2010 when the default rates spiked. Now competitive electricity companies had a reason to enter the Pennsylvania market as they could offer customers with lower electric rates and savings on their PPL electric bills.

Electricity companies rushed into the PPL service area market with billboards, TV commercials, online advertising, and even door to door salesmen. More people started to familiarize themselves with electricity choice and the savings available by shopping for the cheapest PPL electric rates.

The following year in 2011 the same thing occurred in the state’s largest electric utility service area PECO Energy. PECO Energy, the utility that delivers power to the city of Philadelphia, had their decade long default rates expire and were forced to charge their customers a much higher rate for electricity supply.

Meanwhile, as was the case in PPL, competitive electricity companies could offer PECO Energy customers rate plans that were much lower than the default rates. Customer started comparing Philadelphia electricity prices and switching. The industry of electricity choice was starting to take shape.

Dissecting Myths about Pennsylvania Electricity Choice by Todd Yasbin

Over the next eight years customers in the other utility service area markets in the state started to see savings opportunities offered by competitive electricity suppliers. Many of the suppliers were slow to enter into the smaller First Energy areas at first, but once they could offer savings to those customers and choice awareness picked up, it make sense for them to go in and acquire a pool of new customers.

From 2010 until 2019 electricity suppliers were able to offer savings to at least some pool of Pennsylvania customers at any given time. The market was maturing as more people began to realize that they can not only shop for savings, but for price security and even renewable options.

Electricity Shopping Activity Stops

But everything seemed to change around the time of the pandemic. From early 2020 until the summer of 2023 the default rates became very low and competitive suppliers became unable to offer savings. For the last three and a half years, the growth in electricity shopping in Pennsylvania completely stopped.

Worst yet was that many customers went back onto the default rate with their utility. The number of active customers on a competitive plan began shrinking quite rapidly.

A lot can happen in 42 months. Over the last three plus years hundreds of thousands of people in Pennsylvania have moved into new homes, and without competitive electric rates offering savings to incentivize people to shop, most consumers have forgotten that Pennsylvania electricity choice exists and have reverted back to the days of regulated energy.

2023 Pennsylvania Electricity Rates are Competitive Again

In recent months the electricity suppliers have been able to start offering competitive rates that are lower than the utility default rates. At first the savings were slight, but in the summer of 2023 savings have really started to expand.

Customers of the two largest utilities - PPL and PECO Energy - are able to lower their electric bills by more than 20%. As of April of 2023 only 21.4% of PECO Energy residential customers were purchasing their power from a low Pennsylvania electricity supplier even though savings were as high as 30% off of the PECO price to compare rate.

There is absolutely no reason why a PECO Energy customer who can save 30% should remain on the price to compare rate, and yet there are more than 1.2 million residential customers who are paying that high default electric rate.

Residential customers in the PPL service area who are not receiving their power supply from a competitive supplier will be hit with a large price hike on June 1, 2017. The increase will manifest on the price to compare rate which encompasses the generation and transmission components of the bill. Customers who have entered into electricity contracts with competitive Pennsylvania electricity suppliers will not be effected by the change.

PPL Energy is required by law, through the Pennsylvania Energy Choice and Competition Act, to provide default service for the generation and transmission charges on the PPL electric bill for those customers who do not shop for competitive rates. The default price, often referred to as the ‘Price to Compare’ is calculated through an auction process whereby competitive suppliers bid to service a portion of the default paying customers. For the past two years, and foreseeable future, PPL enacts a change to the price to compare rate twice a year. Prior to that the change was made every three months.

Over the last six months default paying customers have paid a rate of $0.07439 for the price to compare rate. On June 1 that price will rise to $0.08493, representing a 14.17% increase on the bill for PPL customers who continue on the default rate structure. This will be the first price increase since March 1, 2015. The last four price changes have been rate decreases. Despite the downward price trend over the last two years, customers were still able to find significant savings off of the price to compare rate in the competitive market; licensed competitive suppliers were able to offer fixed rates that were lower than the PPL default rate. Customers who have become used to seeing a decreasing electric bill might be surprised when they get their PPL electric bills in July showing a large increase.

Though the competitive market has presented savings to customers over the last several years, the upcoming price hike will present an even greater opportunity for customers to save money through Pennsylvania electricity choice. As of April 2017 PPL reported that 57% of their over 1.2 million residential customers were still on the default price to compare rate. These customers have the opportunity to avoid the upcoming rate increase and even lower their existing rate by taking the time to shop the market for competitive offers. In addition, by locking in a long term fixed rate customers may be further protecting themselves from a future PPL rate increase that could occur in the next rate change happens later this year in December.

On March 1, 2013 PP&L raised their price to compare electric rate by an average of 13% for small and medium size businesses. The price to compare is the default rate that PPL customers pay for generation and transmission service who have not entered into a competitive electricity agreement with a competitive power supplier. Through Pennsylvania electricity choice businesses have the ability to shop for competitive electric rates than can offer substantial savings versus the PPL utility default rate.

As the state’s second largest electric utility, the rate increase imposed by PP&L will effect a large number of businesses throughout central Pennsylvania. Roughly 90,000 businesses in the area will see their electric rate increase to $0.1039 (10.39 cents) per KWh. Meanwhile competitive rates for business consumers spending over $600 a month are as low as $0.082 (8.2 cents) which can provide savings of 17.5% once the gross receipts tax is factored.

The Pennsylvania Public Utility Commission reports that 47% of commercial customers in the PP&L service area are still on the price to compare rate structure. All of these customers should take immediate action and find a low fixed electric rate that will provide lower PP&L electric bills. Low PP&L electric rates will offer immediate savings versus the default rate and also protect the business customer from further potential price hikes that can take effect as early as June.

Compare low PP&L business electric rates below. Simply choose your utility (PPL) and your average monthly electric bill. You will then be given a matrix that will let you compare fixed electric rates by term and start month.