Like it or not, electricity competition is upon us. Peco will still be your "poles and wires" utility - it will deliver your power, bill you for it, and answer trouble calls. But after New Year's, those comforting rate caps will vanish for Peco's 1.3 million residential customers. As a result, you'll be more exposed to the market price of power - and thus to market risks and opportunities - than ever before.
If you tune out and don't do anything, nothing awful will happen. You'll remain a customer of Peco's so-called default service. Every three months, Peco will make deals for power and adjust the price it passes along to you accordingly. You'll essentially be billed a "commodity price" for electricity that Peco will adjust every three months, just as it and the Philadelphia Gas Works make quarterly adjustments in the commodity price they charge you for natural gas.
The good news is that Peco has finished its power-buying deals for the first quarter of 2011, and prices have actually ticked down, not up - despite years of warnings that the cap expirations would bring skyrocketing rates. Some credit is plainly due to the emerging competitive markets for power, but you can also thank the recession, conservation, and the abundance of natural gas for helping to keep prices in check.
Next month's transition won't be completely painless. Peco customers can expect to pay about 5 percent more for electricity starting Jan. 1 because of increases in the flat monthly service charge and in delivery rates - parts of your bill that are still regulated by the Public Utility Commission, which gave its final approval last week to those increases.
That equals about $6 a month for the median Peco customer who uses about 750 kilowatt-hours per month, says spokeswoman Cathy Engel.
