Information Key to Helping Consumers Avoid Electric Rate Shock

As the winter heating season quickly approaches, thoughts of the unexpected spikes in electric bills experienced by many electric consumers last winter is forefront in my mind. Last winter’s polar vortex resulted in dramatic electric generation rate increases for consumers with variable rate contracts. Now is the time for shopping customers to review the terms and conditions of their supplier contracts to determine if their current contract adequately protects them from similar rate spikes this winter.
Competitive electric generation suppliers are not public utilities and although they are required to be licensed by the Public Utility Commission (PUC), their rates are not subject to PUC regulation. These suppliers operate in a competitive free market environment. The terms and conditions of service offered by a competitive supplier are contained in the contracts it offers to customers. Consumers who sign up for service from a competitive electric generation supplier should carefully review the terms and conditions of service as it contains important information regarding the type of rate (fixed or variable), how the rate is determined, if the rate includes taxes and fees, and if the contract is subject to penalties for early termination or cancellation.
Consumers can protect themselves from variable rate fluctuations by signing up for a fixed rate contract. Under a fixed rate contract, consumers are charged the same price for electric generation supply for the duration of their service contract, whereas variable rate contracts are generally subject to a promotional rate period followed by fluctuating monthly rates based on wholesale electric prices. While variable rate contracts may work for many consumers, anyone considering a variable rate contract for electric generation service needs to be aware that those rates may be subject to dramatic rate increases.
I fully support a competitive retail electric generation supply market. I believe that consumer education is key to balancing a free market offering services to consumers with the need to protect consumers from the substantial and unexpected increases seen by many last winter. To this end, I encourage all consumers who are thinking of switching to a competitive electric generation supplier to visit the PA Power Switch website ( Administered by the PUC, this website contains information about licensed generation suppliers, the different types of contracts suppliers may offer and a list of questions consumers should ask before signing up.
With these answers, consumers will be armed with the information they need about fixed and variable rate contracts; the contract term; introductory or teaser rates; and the applicable taxes, fees and billing that will apply to their contract. This information will help ensure electric customers are equipped to manage the portion of their electric bill related to generation supply. I encourage all consumers to visit the PA Power Switch website or contact the PUC with any questions.
Representative Bob Godshall
53rd District
Pennsylvania House of Representatives
Media Contact: Donna Pinkham