I’ve already seen inflation touching the price of gasoline, many foods, used cars and real estate.
Now, we’re introducing electricity – just in time to decorate for Christmas, the longest night of the year and the coldest of winter.
Virtual prices for eight Pennsylvania electricity distribution companies have increased this month, effective December 1, but they will be especially notable for customers of PPL, which covers a large swathe of central and eastern Pennsylvania, including most of Cumberland, Dauphin, Lancaster and Perry Counties.
For those 1.4 million accounts in the PPL service area, winter electricity bills will reflect a 26 percent increase in rates, from 7,544 cents to 9,502 cents per kilowatt-hour. The new residential rate is also the second-highest among the 10 different distribution companies serving the state, second only to small company Pike County Light & Power, which resets to 9.796 cents per kilowatt-hour. Commercial accounts will be even higher.
If you haven’t read your electric bill closely for some time, it’s worth noting that the energy used accounts for about half of the bill; The rest is a distribution fee to pay for the infrastructure you already carry into your home.
For residential customers, the next comparable price for electricity will be the highest since mid-2015, said PPL spokesperson Ross Hrivnak.
Most other utilities — including MetEd, the other major supplier in the middle — kept their increases below 10 percent. MetEd prices rose 4.2 percent, to 7,414 cents per kilowatt-hour.
The lowest rate in the state goes to the lucky clients of West Penn Power who cover Central and Southwest Pa. , which would be 5.698 cents per kilowatt-hour during the winter.
These default rates only apply to any customer who does not proactively shop for electricity, which Pennsylvania consumers have been able to do since 2010. For PPL customers, about 64 percent takes the default rate.
Shoppers can generally find prices that are lower than the default rates.
But the fact of the matter is that even consumers who shop for electricity are likely to find higher prices this winter than in recent years. PennLive’s survey of the state’s PAPowerSwitch.com found quite a few offers that beat PPL’s new default pricing, but they’re also well above the price levels that can be found in recent years.
“Consumers have enjoyed a lot of the benefits of historically low prices over the past two years,” said Glenn Thomas, a former member of the Pennsylvania Public Utilities Commission who now runs an energy consulting firm. “But in 2021, their prices will be higher.”
Why does this happen?
PPL said its significant rise is the result of the October 2021 auction where it retained power capacity.
“We run competitive power auctions twice a year, where we secure the supply at the lowest offered price, and then pass that supply on to customers at no price increase,” Hrivnak said. This default rate, known as the rate to be compared, is updated every 1 June and 1 December.
He added, “The increase is due to several market conditions such as the high cost of energy supply sources, including natural gas, as well as overall inflation.”
Why are natural gas prices rising?
According to Dustin Myer, vice president of natural gas markets at the American Petroleum Institute, this is a function of increased energy sector demand during a warmer-than-normal summer, and lower fuel switches due to the retirement of coal-fired power plants and flat production. Because of manpower and supply chain issues.
The API said that during September and October, the average benchmark price of natural gas for the US market was 70 percent higher than the current 10-year average, although natural gas prices are expected to decline with lower demand in the spring and will remain low. . The long-term.
The increases this winter have not been felt evenly across the state, in part because utilities are following different procurement plans. For some, this means that volatility in the market can be smoothed out.
A spokesperson there said the spikes didn’t affect MetEd sharply, as it goes to auction three times a year and then sets the average cost of the resulting contracts for 12 or 24 months.
“When we made some of these purchases, natural gas prices were very low and we still saw the benefit of that,” said Todd Myers of MetEd.
How can you still save.
All businesses and the Pennsylvania Public Utilities Commission advise customers to shop for better rates PAPowerSwitch.comand then take whatever steps possible to maintain it—particularly in the winter months, when customers typically use more electricity for heating to stay comfortable, and make more use of televisions, appliances, and lights.
“Upcoming price changes, combined with lower temperatures, make this an important time for consumers and businesses to evaluate their energy options and explore ways to save money and energy in the coming months,” said Gladys Brown-Dutreoy, Chair of the PUC Board of Directors.
“We encourage consumers to review their electricity bills carefully, understand what energy prices they will pay if they continue with the default service, and then explore the official PUC electric shopping site for details on competitive offers, along with tips to conserve and save energy.”
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