Thursday, February 24, 2011

Electric Competition Heats Up

Electric competitors increased by 4 times the amount of electric load they served between January 1, 2009 and January 1, 2011, the date when rate caps and so called stranded cost charges ended nearly completely.  Rate caps plus stranded cost charges made market entry impossible until they expired.  About 25% of Pennsylvania's total electric demand as of January 1, 2011 was supplied by electric competitors.

At the start of this year, retail electric competitors supplied 9,223 megawatts of power to Pennsylvania's consumers, up from the 2,450 megawatts they supplied in 2009.  Competitors won the increased load mainly in PPL service territory where the rate cap ended a year earlier on January 1, 2010. 

By January 1, 2010, the PPL load supplied by a competitive electric supplier jumped to 2,460 megawatts from just 28 megawatts in 2009.   Then, by January 1, 2011, competitive electric suppliers were serving 4,848 megawatts or 65% of the total PPL load. 

More than 50% of the total state load that was supplied by a competitor as of January 1, 2011 was located in the PPL service territory. 

Prior to PPL's rate cap termination, rate caps concluded in DQE as early as 2002 and Penn Power in 2007.  Competitive electric suppliers in the  DQE and Penn Power service territories in January 2011 supplied 54% and 56% of the load respectively.  Both DQE and Penn Power are comparatively small service territories.

Rate caps just ended this New Year in the PECO Energy, Allegheny Power, MetEd/Penelec service territories.  The April 1st 2011 data will be watched to see how much load has switched there in the first quarter following the end of the rate caps.

Since much higher percentages of large users rather than small consumers are now supplied by competitive electric suppliers, the percentage of total load switched is considerably higher than the percentage of all customers served by a competitor. A total of 706,113 customers are served by competitive electric suppliers as of January 1st or roughly 12%.   Of all customers served, 582,097 are residential. 

The percentage of residential customers shopping by January ranged from 0 in Allegheny Power to 35% in PPL.  As of January 1st, 2011 nearly all the residential shopping had taken place in PPL, DQE, and Penn Power service territories.  Considerable shopping may be reported in the PECO Energy service territory in the April 1st, 2011 data where as many as 20 competitors are offering service to residential customers.

Industrial load shopping ranged from a low of 16% in Allegheny Power service territory to a high of 96% in Penn Power service territory.  Ranking second with 92% of industrial load switched was PPL.

This posting will be the first of a series about Pennsylvania's retail electric markets.


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