Peco customers are paying less for electricity than at any time since competitive market rates took effect six years ago, thanks largely to cheap natural gas that sets the wholesale market price for all power.
The utility's standard rate for residential generation supply on March 1 fell to 7.16 cents per kilowatt hour (kWh), down 27 percent since 2011. In competitive markets like Pennsylvania and New Jersey, retail customers can shop for a supplier, whose charge typically makes up about half of a customer's bill.
"The competitive energy market and the benefits of clean, affordable, and local natural gas are leading to big savings for our customers," Craig Adams, Peco's president and chief executive, said in a statement.
The utility's prices are slated to go down even more on June 1.
While the price of Peco's power has declined 27 percent in the last six years, customer utility bills have gone down by only 10 percent during that period, saving a typical residential customer who uses 750 kWh a month about $12 a month, said the utility's spokesman, Ben Armstrong.
That's because the reduction in generation costs has been offset by boosts in prices for other components of a customer's bill, including the distribution charge and the fixed monthly customer fee. Those are the components that pay for Peco's operations — and from which it derives its profits.
Still, Peco's generation charge has declined so much — 10 percent in the last year alone — that it is difficult to find a better deal from a competitive supplier than the utility's "default" rate, which is the price given to customers who don't shop for power.
Of 131 offers currently posted on the Pennsylvania Public Utility Commission, only six offers for fixed-rate service of at least 12 months match or beat Peco's "price to compare." Other suppliers offer shorter-term fixed rates or variable-rate deals, which are likely to increase in less than a year after the introductory terms expire.
There is an additional way to save money, and it may seem counterintuitive to many: Sign up for a competitive supplier through Peco itself.
The utility is promoting a program it calls Peco Smart Energy Choice, in which customers are steered to a participating electricity supplier who agrees to provide power for 12 months, with no cancellation fees, at a fixed rate 7 percent below Peco's current price-to-compare.
In the last year, Peco has referred as many as 8,000 residential customers a month to competitive suppliers under the program, Armstrong said. There are currently 17 suppliers who participate in the program.
One might ask why Peco would steer customers to competitive suppliers. Peco agreed with the PUC to promote competitive markets, and since it does not make any profit on electrical supply charges, it doesn't stand to lose if customers switch.
Competitive suppliers participate, even at a low price, because they are eager to capture more customers who they hope will stay enrolled past one year. Currently, about 36 percent of Peco's customers, or about 590,000, are served by competitive suppliers.
The program is only available to customers who are not currently being served by competitive suppliers, Armstrong said. Customers can enroll by calling Peco, 1-800-494-4000, or by signing up online under "my account" at Peco.com.
It may be in consumers' best interest not to rush to a decision because Peco's default rate, which is determined by advanced auction prices, is now slated to decline even further on June 1.