Consumer alert: Electricity-price discounts heat up

A full-scale price war has broken out for Peco Energy Co. electricity customers as prices have hit their lowest levels since market rates came into play a year ago.

Some competitive suppliers are offering residential discounts of up to 20 percent off Peco's price-to-compare, the rate that customers pay if they do not switch to an alternative supplier.

For customers who lock in for the fixed-rate deals, the discounts should become even bigger after March 1, when Peco's price is projected to increase slightly.

Competitive suppliers say the reason for the price decline is simple: Natural gas prices have plummeted this winter to their lowest levels in a decade because of abundant supply and warm weather. Gas is used to generate electricity, and low fuel costs translate into cheap electricity.

"It's all that good shale gas you guys are sending us from Pennsylvania," said Mike Perna, vice president of marketing and business at ConEdison Solutions, referring to the Marcellus Shale boom that has driven down gas prices.

ConEdison has dropped prices 10 percent in the last month to 8.15 cents per kilowatt-hour, fixed for 12 months. That is 18 percent below Peco's current price of 9.92 cents per kilowatt-hour.

Alphabuyer.com, a group-buying company in Paoli that aims for the best current market price, is offering rates as low as 8.1 cents per kilowatt-hour from Amerigreen, a Pennsylvania supplier. As with the ConEdison offer, the price is fixed for 12 months and includes no early cancellation fee.

Another supplier, Energetix Energy Services Co., is offering a 12-month fixed rate of 7.927 cents per kilowatt-hour, but its deal includes an element of risk - a $35 fee for customers who cancel before the end of its term.

A typical residential customer uses about 9,000 kilowatt-hours a year, so a two-cent discount would amount to annual savings of $180.

Prices have dropped so quickly that they have overtaken offers that companies such as Energetix included in recent mailings.

"In a normal pricing environment, the price doesn't really change all that much that quickly," said James DiStefano, the Energetix chief operating officer. He said the company would honor the lowest prices available to customers who respond to the direct-mail offers.