deregulation peco energy

DEREGULATION : 

DEREGULATION What’s the story??

Well……… : 

Well……… As the cold weather sets in and our days get ever shorter, many Peco Energy Co. customers are already aware that their electric bills are on the rise. (NOTE: MOST PEOPLE HAVE NO CLUE YET, BUT THEY WILL & SOON!) Anyway while some of that is because of a greater need for heat, the prospect of a sharp climb in generation and transmission rates for electricity after the rate caps expire in just a few weeks has many people anxious about the implications of deregulation.

SO WHAT IS : 

SO WHAT IS DEREGULATION ????????????? INQUIRING MINDS WANT TO KNOW

Slide 4: 

DEFINITION of DEREGULATION The removal of government controls from an industry or sector, in this case PECO, to allow for a free and efficient marketplace.

A FREE & EFFICIENT MARKETPLACE ?? : 

A FREE & EFFICIENT MARKETPLACE ?? In a free market, the greater the need for any product (energy) coupled with the fact that there are more suppliers of that product, provides for happier satisfied consumers. The freer the market (the theory goes), the more truly the prices will reflect consumer habits and demands, and the more valuable the information in these prices are to all players in the economy. Through free competition between vendors for the provision of products and services, (ELECTRICITY) prices tend to decrease, and quality tends to increase…. Well at least it should!

GOOD NEWS RIGHT? : 

GOOD NEWS RIGHT? Yes and No! It’s great news for those who know about the upcoming changes and switch to a new energy carrier NOW so as to save money. It’s bad news for those who don’t know what’s about to happen, because as a result they will stay with PECO and WILL see an increase in their electric bill month after month, simply because they will get dollar for dollar default rates that Peco charges. Peco has to distribute regardless of who you chose to be your supplier. They would rather NOT have to supply as well as distribute. They make no profit, however they also don’t care about competitive pricing. Then sadly, there are those who hear about it, know what will happen but CHOOSE TO DO NOTHING AT ALL!

15 YEARS AGO….. : 

15 YEARS AGO….. Deregulation of electricity generation in Pennsylvania was approved in the PA General Assembly in December of 1996. The primary impetus for the legislation was to open the electricity industry to competition, thereby enabling Pennsylvania residents, institutions, businesses and industries to buy electricity at lower costs. Originally the deregulation was to be completed statewide by Jan. 1, 2001. MMM Obviously, there have been numerous delays in this arduous process. Now the anticipated deadline for completion throughout the state is Dec. 31, 2010 for all investor-owned utility companies. The rural electric cooperatives and municipal-operated utility companies are exempted from this legislation. So that’s just 15 days away.

Rate Caps : 

Rate Caps Ok so let’s talk about Rate Caps. Electricity rate caps (or price controls) were implemented by the PA Public Utility Commission (PUC) to ensure relative price stability during the potentially tumultuous years leading to the complete deregulation of electricity generation. The price of electricity has remained nearly constant since 1996 believe it or NOT, with annual increases ranging from 0 to about 5 percent, while the prices of other sources of energy were skyrocketing. During this same period, customers were required to pay each month the tangible and intangible transition fees (also known as stranded investment fees) to compensate the utility companies as they transition to the deregulated environment. The rate caps for electricity that have kept the electricity prices fairly low expire when the deregulation of electricity is completed at the end of this year, 2010. The customer's responsibility to pay the transition fees also expires at the same time, YEAH thereby completing the deregulation of electricity generation.

The Basics : 

The Basics So the basics are that each customer will have the opportunity to shop for a supplier of generated electricity. Generated electricity will become a commodity that can be purchased from any licensed supplier or broker that you choose, much like cell phones or gas stations. Whenever considering generated electricity, we need to think in terms of both energy (kW) Kilowatts, A kilowatt is a unit of power equal to 1000 watts : and (KWh) Kilowatt Hours: The standard unit of measure for electrical energy use. For example One kWh is used to light a 100-watt bulb for 10 hours. Why am I telling you all this? Because it’s on your bill and you can understand it better! FYI : Peco’s current rate is 0.94c per KWH If a customer opts not to shop for an electricity supplier, then PECO will serve as the "default service supplier" or the "provider of last resort." If your selected electricity generation supplier is ever unable to provide the electricity you need, PECO will supply you with electricity at the prevailing price.

Wake up there’s still more…. : 

Wake up there’s still more…. The transmission and distribution of the electricity as well as local service will continue to be provided by PECO. It doesn't matter which company you select as your electricity generation supplier; you will remain a customer of PECO for distribution and local services. PECO will be responsible for providing line maintenance, restoring service after storms and accidents and providing on-going customer services including billing. Yes you will still get your bills from Peco but you will be charged by your new supplier! These functions will remain regulated by the PUC for the foreseeable future.

Pa Electricity Generation Choice and Competition Act of 1996 : 

Pa Electricity Generation Choice and Competition Act of 1996 GOALS: 1 To Lower prices relative to regulated rates (Pa rates were @ 15% higher than the National average before this act) Right now Pa rates are 3% lower! 1 Create a Competitive Market with real choices of suppliers 1 Make way for New products and services

Environment in the last 15 Years : 

Environment in the last 15 Years 1 The cost of fuels, (especially Coal and natural gas) has increased dramatically. 1 Power Plant costs have escalated Environmental requirements have become more stringent 1 Uncertainty exists about future regulations on things such as carbon dioxide, SOx, NOx, particulates and Mercury. I don’t know what these are either but uncertainty exists!

Implementation: Post Rate Cap Period : 

Implementation: Post Rate Cap Period Peco provides Default Supply Service- If you do nothing you will continue to receive supply service at Default Service Rates Customers can shop at any time subject to monthly windows for enrollment that are determined by your meter read dates Peco encourages you to shop-Peco doesn’t make money on Default service supply-simple pass thru of supply costs Peco continues to provide you with reliable distribution service-delivers electricity to your door, regardless of whom you buy your supply from. It all comes from the same reliable PJM electricity grid!

What should you be doing now?Shop~Switch~Verify~Save : 

What should you be doing now?Shop~Switch~Verify~Save SHOP-Start now! Get up out of your chair and go find a new supplier but wait a minute I’m not finished this presentation so sit back down… seriously though shop and SWITCH SOON, Why? Because it will take time and Jan 1st is quickly approaching! Verify- Peco will send you a letter asking if you in fact switched. 10 days later you’ll get a letter from new supplier welcoming you… Whole process could take over a month to actually get switched! Save-Use energy wisely-Take advantage of Peco’s Energy Efficiency & Conservation (EE&C) Program Use it or Lose it…you can get paid for NOT using electricity, ask Peco about the Demand programs because it’s mandated by the PUC, that they lower overall usage by certain percentages per year.

The Bottom Line : 

The Bottom Line Peco will be deregulated in 15 days! Peco wants you to find a new supplier, they really do! It is in your BEST interest to switch to a new supplier right now..Don’t wait, it can take 30 days Conserve and manage your energy usage now to save on your current bills and future energy bills Ask about and use energy programs that Peco has to offer! You save money for doing it! And finally, know that competition makes for better service, better prices and more satisfied customers, it’s a good thing! Hopefully you have a better understanding now of what is happening with electric deregulation.

Definitions and Terms : 

Definitions and Terms Demand: Unit of electrical power, expressed in kilowatts (kW). Distribution: Delivery of electricity from the substation to the retail customers. Generation: Production of electricity at a power plant or on-site facility. Investor-Owned Utility: A utility company owned and operated by private investors. Load Factor: Relationship of peak demand (kW) to electricity usage(kWh). Peak Demand: Maximum amount of electrical power (kW) used over a 30-minute interval in the billing period. Public Utility Commission (PUC): Pennsylvania regulatory agency that provides oversight, policy guidance, and direction to electric public utilities as well as other public utilities. Transmission: Transport of high voltage electricity from the generation plant to substations.

INFORMATION : 

INFORMATION Need more information regarding this presentation? You can call 215-469-4648 and leave your name and number or go to www.bb21.us

Have a Great Day : 

Have a Great Day HAPPY HOLIDAYS FOLKS!