The price of electricity is going up, especially in the midstate – PennLive

Science & Technology

The cost of running a Christmas display may be a little higher this year, as electricity rates are going up in most parts of Pennsylvania. This is Longwood Gardens, from January 2019.
You’ve already seen inflation touch the price of gasoline, many foods, used cars and real estate.
Now, we present electricity — just in time for Christmas decorations, the longest nights of the year and winter cold.
The default prices for eight electric distribution companies in Pennsylvania increased this month, effective Dec. 1, but it’s going to be especially noticeable for customers of PPL, which covers a huge swath of central and eastern Pennsylvania, including most of Cumberland, Dauphin, Lancaster and Perry counties.
For those 1.4 million accounts in PPL’s service area, winter electric bills will reflect a price increase of 26 percent, from 7.544 cents to 9.502 cents per kilowatt hour. The new residential rate is also the second-highest of the 10 different distribution companies serving the state, second only to the tiny Pike County Light & Power, which is resetting to 9.796 cents per kWh. Business accounts will be even higher.
If you haven’t read your electric bill closely for awhile, it’s worth remembering that the power used accounts for about half the bill; the rest is distribution charges to pay for the cost of the infrastructure that actually carries it into your home.
For residential customers, the upcoming price-to-compare for electricity will be the highest since mid-2015, said PPL spokesman Russ Hryvnak.
Most of the other utilities – including MetEd, the other major supplier in the midstate — have kept their increases under 10 percent. MetEd’s prices are up 4.2 percent, to 7.414 cents per kWh.
The lowest rate in the state goes to the lucky customers of West Penn Power covering central and southwestern Pa., who will be at 5.698 cents per kWh through the winter.
These default prices only apply to any customer who doesn’t proactively shop for electricity, which consumers in Pennsylvania have had the ability to do since 2010. For PPL customers, about 64 percent take the default rate.
Shoppers can generally find lower prices than the default rates.
But the fact of the matter is that even consumers who are shopping for electricity are likely to find higher rates this winter than in recent years. A PennLive survey of the state’s site found a handful of offers that beat PPL’s new default price, but they are also well above the price levels that could be found in recent years.
“Consumers have very much enjoyed the benefit of historically low prices the last couple of years,” said Glen Thomas, a former member of the Pennsylvania Public Utility Commission and now runs an energy consulting business. “But in 2021, their prices are going to be higher.”
PPL said its large spike is the result of the October 2021 auction where it reserved power capacity.
“We hold competitive energy auctions twice a year, in which we secure a supply at the lowest rate offered, and then pass that supply on to customers without any markup,” said Hryvnak. “This default rate, known as the price to compare, is updated every June 1 and December 1.
“The increase is due to several market conditions such as the rising cost of energy supply sources, including natural gas, as well as overall inflation,” he added.
And why are natural gas prices up?
According to Dustin Myer, vice president of natural gas markets for the American Petroleum Institute, that’s a function of stronger power sector demand during a warmer-than-normal summer, reduced fuel switching due to the retirement of coal-fired power plants and flat production due to workforce and supply chain issues.
Through September and October, API said, a benchmark natural gas price for the U.S. market was averaging 70 percent higher than the current 10-year average, though natural gas prices are expected to fall back as demand eases in the the spring and them remain lower in the long-term.
The increases this winter aren’t being felt evenly across the state, in part because the utilities follow different procurement plans. That means for some, the fluctuations in the market can be smoothed out.
The spikes didn’t affect MetEd as sharply, a spokesman there said, as it goes to auction three times a year, and then averages the cost of its resulting 12- or 24-month contracts.
“When we made some of these purchases, natural gas prices were extremely low and we’re still seeing the benefit of that,” said MetEd’s Todd Meyers.
All the companies as well as the Pennsylvania Public Utility Commission advise customers to shop for better rates at, and then to take whatever steps they can to conserve — especially in the winter months, when customers typically use more electricity for heat to stay comfortable, and are making more use of TVs, appliances and lights.
“The upcoming price changes, combined with falling 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 PUC Chairman Gladys Brown Dutrieuille.
“We encourage consumers to carefully review their electric bills, understand the energy prices they will be paying if they stay with default service, and then explore the PUC’s official electric shopping website for details on competitive offers, along with tips for energy conservation and savings.”
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