Electricity Deregulation: What Should I Do?

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Hotline, Fall 1998

It sounds so easy. It sounds like the right thing to do. Choose your electricity provider. If you are like many people in the area that filled out an enrollment form and were chosen, you are now face to face with this task and it is anything but simple. Here are some of the many questions that consumers are wondering about.

Must I do this now or lose the opportunity to switch? No. Whenever you choose, you will receive your first bill from your new generator approximately two months later.

Will my total charges for power be from the new provider? No. You are only choosing a generator of the electricity and you will receive a bill from that provider. Even if you have not yet enrolled in the choice program, you will see your electricity unbundled into its component parts starting in 1999. Thus you will also be billed by your local utility for transmission of the power from the source of supply to the local distribution company, for distribution of the power from the local distributor to your home, for stranded costs, known as a transition charge, and a basic charge for billing including meter reading, and service line maintenance known as a customer charge. You may be able to select a combined bill or be required to receive separate bills depending on the companies involved.

What is stranded cost? It is the debt for such things as construction costs that a utility must continue to repay. Some companies have higher stranded costs due to the higher costs often associated with construction of nuclear power facilities. Utilities generally pushed the Public Utility Commission (PUC) for high stranded cost recovery while citizens groups argued that the utility investors should bear the brunt of these business decisions, not the customer.

How will I know who is supplying energy in this service area? The companies will be listed in the guide, “How To Shop” that your present power provider will send to you if you are in the program. However, in my experience of just recently receiving a brochure, several of the companies listed are not supplying power to residential customers. You need to call each company and there may be new choices not listed in the brochure. Check with the Electric Choice Hotline (1-888-782-3228) or visit this web site: http://www.electrichoice.com. Another option is the Wattage Monitor at http://www.wattagemonitor.com. Change is coming so fast that going on line to these services may also produce differing results from day to day.

How will I compare these companies? You will need to research their proposals on your own. Although price is the comparison of concern for most people, there are other considerations:

  • Companies may offer discounts for electricity use at off peak times.
  • There may be an option for a combined single bill.l Is the supplier licensed by the PUC?
  • Does the supplier’s cost includes transmission costs?
  • Are there any incentives or special services for signing up?
  • Finally, but (GASP believes) most importantly, you will want to know what kind of fuel and emission levels are associated with this provider. The least expensive energy (generally old coal fired plants with few controls) may come at a low monetary price only because part of the cost is born not by the company but by us in damage to our health and the environment.

At the other end of the emission spectrum, a company may provide several products specifying varying levels of renewable energy or possibly non-nuclear fuel sources. The fuel sources will often affect the price of the product.

Is there an easy way to find a green supplier? GASP and other environmentally concerned groups argued before the PUC that consumers should be given easily available information about the fuel sources and emissions of the power generators during their comparison shopping. Unfortunately, this information too must be specifically requested from each company. It should be a major consideration, as making electricity causes more air pollution than any other industry. The following is a web site where you can find comparisons of emissions and fuels of major utilities: http://www.nrdc.org, click on guides, then utilities profiled.

In response to the opportunity for the public to choose cleaner power, a program was started in California called the Green-e program, and the Green-e program has now come to Pennsylvania. It asks generators to sign a contract with the Center for Resource Solutions (CRS) Green-e Program agreeing to have an annual audit and abide by a Code of Conduct. The generator agrees that at least 50% of the electricity supply will come from energy generated from renewable resources such as solar, wind, small hydro, bio mass, geothermal or energy conservation.

The non-renewable component will not be more polluting than the typical available system mix which may include some nuclear. Companies joining the program may use a Green-e logo with their certified products. More information is available at http://www.green-e.org or call 1-215-988-0929 to reach the Energy Coordinating Agency (ECA) in Pennsylvania for Green-e.

The Green-e Program has recently come under fire by the Ralph Nader organization, Public Citizen. The organization makes the point that buying green power that already exists in the utility power grid does nothing to create a difference. The power is repackaged and may be more expensive.

“CRS needs to strengthen their requirements for Green-e certification and exclude utility power” says Cleen ‘n Green in California, the only energy provider to be a stand out in the Green Power Report from the Nader organization. The report, entitled “Green Buyers Beware,” notes that only Cleen ‘n Green obtains power from in-state, independent “green” generators of electricity not under contract to utilities. Other providers offer “green” energy resources from utilities that would be used anyway. “We purchase our power from the Automated Power Exchange, a private power exchange that hosts a renewable energy trading market that does not accept renewable power from utilities”, says Rick Kohl of Clean n Green. “Also, while we support the intentions of CRS’s Green-e program, their requirements are not stringent enough. Cleen ‘n Green’s green 100 and green 50 products exceed the minimum requirements of the Green-e program. They (Green-e) require a minimum of 50% “green” content and their requirements for non-green power is that it not exceed ‘system mix’. System mix in California includes coal and nuclear power, so if you sign up for a Green-e certified company’s green product, that is not 100% “green,” you will probably be getting power from these conventional, polluting sources. Cleen ‘n Green energy will NEVER buy any power from coal-fired, oil, or nuclear power plants,” states the Cleen ‘n Green web site. Cleen ‘n Green has not joined the Green-e program.

The Green-e Program supporters will say this is how we get started and create demand. In fact some generation choice programs in California promise to create new renewable power capacity if they get enough support for their “green” program, and early indications are that California is building new renewables, as the state is experiencing an approximately 7% increase in planned renewable capacity after decreasing capacity in the 80s and early 90s. This is due partially t o the public interest and partially to a renewable incentive program available from the California Energy Commission. Pennsylvania has no incentive program.

In Pennsylvania and the east coast in general, “green” power of any sort is less available so there is an even greater need to stimulate this new market. If we want NEW “green” capacity, it will take a show of support from the public by purchasing green products and continuing to be active communicators with our legislative representatives. There are 50% and 100% renewable products available from some of the listed current suppliers for western Pennsylvania.

Additionally, Citizen Power, Inc. in Pittsburgh has teamed up with the Energy Coordinating Agency of Philadelphia to form the Energy Cooperative Association of Pennsylvania, or ECAP. The western ECAP is on the newer list of suppliers to choose from in this area. ECAP is a non-profit organization and has a Green-e certified program, among others. Its mission is (1) to help residential — particularly low income — customers enjoy the promised benefits of retail electric competition, and (2) to build a market for clean and renewable energy sources and energy conservation. Some of ECAP’s products may be available in this area at time of this Hotline’s publication.

The ECAP is a membership organization with annual dues of $5 per year. Seniors and low-income membership is free. In electricity buying, “bigger is better.” The ECAP will be able to get a price ( through aggregating a large consumer base) for you that is better than what you may be able to get on your own. Call Citizen Power for more information at (412) 421-6072 or call (412) 521-15 25 to join ECAP.

This is an opportunity for us to support a new and healthier direction for our state and country by supporting “green” renewable power.

by Suzanne Seppi, GASP Vice-President