Peco's electric-heating discount ending

During America's great expansion into the suburbs, the electric-power industry extolled the virtues of clean, modern, "flameless" electric heat.

General Electric Co. spokesman Ronald Reagan urged homeowners to "Live Better Electrically." All-electric houses were sold as "Gold Medallion Homes."

Peco Energy Co. did its part to promote electric heat. In the late 1960s, when Peco built power plants to supply a growing summer air-conditioning load, it had spare winter generation capacity and offered a discount for heating customers. About 160,000 Peco households - mostly in Philadelphia's suburbs - still receive the below-market rate.

They can say goodbye to that sweetheart deal.

Over the next two years, Peco's discounted rate for electric-heating customers will go the way of rotary phones, leaded gasoline, and bell bottoms.

An unadvertised aspect of the coming era of electric deregulation is that Peco must discontinue a host of special electric rates. The residential heating rate - called "Rate RH" in electric-tariff jargon - saves a typical family about $40 a month during the heating season.

Heating customers won't lose their special rate this winter. The discount will be cut by half during the 2011-12 heating season, however, and by the end of 2012, it will disappear altogether.

Loss of the discount could lead to some steep increases in the monthly heating bills of power-hungry customers.

But, to help soften the impact, the utility is planning to introduce programs to help customers cut costs and consumption, Peco spokeswoman Cathy Engel said.

"A typical RH customer not taking advantage of these programs could expect their total monthly bill to increase an additional 5 percent per year in 2012 and 2013 as the discounted generation prices are phased out," Engel said.

This change in the special-heating rate is not to be confused with the much-anticipated lifting of electric-rate caps at the end of this year. On Jan. 1, Peco's residential fees are scheduled to increase about 5 percent for all customers who do not sign up with the growing legion of electric suppliers flooding the market with discount offers.

Peco's heating customers will not find better offers, though. Ten alternative suppliers have listed discount offers for Peco's regular residential customers on the Pennsylvania Public Utility Commission website, yet none is extending savings to heating customers - an indication that Peco's RH rate cannot be beat, for now.