Peco electricity price to rise 21.5% Monday

Posted: September 30, 2012

Peco Energy Co. electricity customers are about to get a jolt in their bills.

The Philadelphia utility's residential price for electricity is slated to increase 21.5 percent on Monday.

The increase from 8.64 cents per kilowatt hour to 10.5 cents amounts to $13.95 a month for a customer using 750 kilowatt hours (kWh).

The quarterly adjustment pertains only to the supply charge on the bill, and won't affect the 30 percent of Peco customers who have switched to competing suppliers. Peco has 1.6 million customers in six counties.

Peco spokeswoman Cathy Engel Menendez said the increase was mostly caused by the utility's undercollection of revenue in the second quarter of this year. She said the utility already projects that its price will return below 9 cents on Jan. 1.

Pennsylvania utilities are required to adjust their supply charge every three months to take into account over- or under-collections, as well as shifts in commodity costs.

Peco doesn't make any money off electricity supply - the cost is a pass-through. The utility earns its profits on a distribution charge it gets from all customers, regardless of who generates their power.

The price boost - even if it is short-lived - is likely to trigger renewed interest in shopping for electricity suppliers.

"The smart Peco customer would be shopping," said Engel Menendez.

Since January 2011, about 474,000 Peco customers have switched to alternative suppliers under the state's electric choice system.

The Pennsylvania Public Utility Commission has posted offers for Peco customers from 45 residential suppliers on its website, The offers include fixed-rate, variable rate and green-power options.

Some suppliers are offering fixed-rate deals as low as 7.6 cents per kWh, or nearly 28 percent off Peco's price.

"For bargain-basement customers, these are the lowest prices I've ever seen," said John Raisch, a cofounder of, a Paoli group-buyer that is offering a six-month fixed rate of 7.55 cents per kWh.

The last three months of 2012 also marks the final billing period that Peco's 160,000 electric heating customers will receive a discounted two-tiered rate from the utility.

Under the PUC's rules, distribution companies like Peco are considered the supplier of last resort, and can only offer a single "default" rate for residential customers. Peco was required to phase out discounted rates for electric heating customers, as well as a cheaper off-peak rate for customers with electric water heaters.

As of Monday, Peco's price for residential-heating customers - identified on their bills as "RH" customers - is 10.59 cents for the first 600 kWh, and drops to 8.25 cents for usage above 600 kWh.

But some competitive suppliers have fashioned discount offerings aimed at heating customers, who use large amounts of power in the winter, when wholesale power-generation prices tend to be lower than in the summer.

The PUC website has several offers posted for RH customers, as does the Pennsylvania Office of Consumer Advocate:

Power Shopping

Pennsylvania's Public Utility Commission explains electrical choice and lists alternative suppliers at

The Pennsylvania Office of Consumer Advocate will mail a free Peco shopping guide: 1-800-684-6560.

Peco Energy Co. explains its rates at

Contact Andrew Maykuth at 215-854-2947, @Maykuth on Twitter or

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