LEWISBURG -- Managers of mid- to large-size businesses shopped their options for electricity suppliers here Friday, but “choice” remained largely a phantom for private homeowners.
About 16 suppliers and brokers set up information tables and courted big users at a SEDA-COG sponsored seminar.
The closest one could get to hope that competition pressure would force prices down for home users served by PPL Electric Utilities was with Direct Energy of Pittsburgh. Senior Business Development Manager Thomas Lynskey, said his firm, which supplies the third highest amount of electricity across North America, doesn’t disdain private customers.
“We serve seven million home owners in Canada and Texas,” he said. “We’re coming,” he said.
Where and how long that will take, depends on profit potential, of course. Mike Beck, Direct Energy’s vice president for residential business, confirmed in a phone call that the firm is actively looking at PPL territory, but insisted no decision has been made.
“The market must be structured in such a way that it lets us compete fairly,” he said. For instance, PPL does the billing on behalf of the generating company and this allows the company to take advantage of systems already in place, he said. PPL is also responsible for collecting and writing off bad debt. Once another generating firm is in the mix, one question is, what happens with bad debt?
There are three facets to electricity service, explained Ray Murphy, Jr., PPL’s major accounts manager — distribution, transmission, and generation. Distribution — the local part of the delivery system — is regulated by the Pennsylvania Utility Commission. Transmission — the transport of high votage electricity from the generation plant to substations — is controlled by the Federal Energy Regulation Commission. Generation is the production of electricity at a power plant. This power is the only facet on the unregulated open market.
“That’s what people are shopping for,” Murphy said. As yet, however, the only people who can go shopping in our region are those who represent businesses or institutions, such as hospitals or schools, that use a lot of energy.
The right fit
For people served by PPL, the utility is their default provider if they don’t shop around. The utility must pass on the price they pay for the electricity. There is no profit in it for them.
PPL wants customers to find their own suppliers, Murphy said. He used a shirt analogy. “We can buy you a shirt. It’ll be white Oxford with a 17-inch neck and 16 and 3/4 inch sleeves. You can wear it, but I don’t think it’s gonna fit you. What I want is for you to buy your own shirt. You can get the size and color you want. We’ll ship it for you. That’s what we are.”
Lynskey said to shop for the best electricity deal you have to understand your bill. Most bills are easily comprehensible, he said. “You look at the transmission charge, transition charge, and generation charge. What you’re paying now is the baseline. Look at PPL’s published rates for next year and compare the expected generation charge to someone else’s rate.
How energy’s used
Then again, rates aren’t the only factor, advise SEDA-COG handouts. Decisions should be based on services and incentives offered as well.
The reason energy suppliers are slower to serve residential users is that it’s more cumbersome, said Mike Palumbo of Exelon Enrgy. “It takes more resources, technology, and back office support,” he said.
“The cost of marketing to (individual) consumers is very high,” said Carolyn Pengidore, president and CEO of ClearChoice Energy of Pittsburgh, a broker that helps people shop for energy. “That’s why these suppliers forcus on business customers first,” she said.
But the biggest user is not necessarily going to get the best deal,” said Matthew Burke, a Hess Corp. energy marketing account manager.
“It has to do with how you use energy,” he said. “If it’s at night, you’ll get a better deal than if you use it at peak hours.” Hess will supply a buyer of no less than 500,000 kilowatt hours a year, he said. That’s about the usage of a small grocery store.
At the seminar, ClearChoice was selling its “Demand Response” conservation program as a means to save money. Customers participate by agreeing to temporarily reduce their electric use during and emergency on the electric system or in response to high prices.
The program is ideal for a school system or similar, Pengidore said. The customer agrees to drop 100 kilowatts of use between noon and 8 p.m. weekdays, when asked by the resgional grid operator.
SEDA-COG’s program was part of its “Energizing our Region Breakfast Seminar” series . The next is “Showcasing Local Energy Projects” and will be held 7:30 to 9:30 a.m. Dec. 4, at The Parkview Room. 17 South Sixth St., Lewisburg. For further information, contact Katie Ruiz at kruiz@seda-cog.org or (570) 524-4491.
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