Penelec customers will see a decrease in their price of electricity beginning Saturday.
The residential rate for electricity will drop from 6.3 cents per kilowatt hour to 5.96 cents per kilowatt hour, said spokesman Scott Surgeoner of FirstEnergy Corp., Penelec's parent company.
The average residential customer who uses 750 kilowatt hours per month will see his bill drop from $96.37 to $92.35, a 4.2 percent reduction, Surgeoner said.
There are a couple of reasons for the third consecutive quarterly drop, Surgeoner said.
"The economy is still not what it should be. The large commercial and industrial customers are not using as much as they normally would, so that leads to an abundance of supply," Surgeoner said. "Don't forget about the Marcellus Shale gas. That helps drive down the price of electricity. An abundant supply of natural gas helps keep the price down as well."
When electricity rate caps expired Dec. 31, 2010, Penelec increased its rate for electricity from 5.7 cents per kilowatt hour to 7.03 cents per kilowatt hour for residential customers. The rate, which Penelec calls its "price to compare," has fluctuated since that time.
The company updates prices quarterly.
Penelec serves 600,000 customers in 31 western Pennsylvania counties.
For the Altoona area, there are 10 providers in addition to Penelec. The rates for the area, according to PAPowerSwitch.com, range from FirstEnergy Solutions at 3.88 cents per kilowatt hour to IDT Energy Inc. at 8.69 cents per kilowatt hour.
To date, more than 1.8 million Pennsylvanians have switched electric suppliers.
"One key point we can say is that competition in Pennsylvania is working, just for the sheer fact there are now 10 suppliers out there to serve Penelec residential customers. When the program started back in 2011, there were only a few at best," Surgeoner said. "Competition is working. You have more choices. That all leads to more competition and better pricing."
The Blair County Chamber of Commerce has offered a residential program, and that offer has been extended to all Penelec customers in Blair County.
Through the program offered through FirstEnergy Solutions, an unregulated subsidiary of FirstEnergy Corp., customers were able to lock in a rate of 7.25 cents per kilowatt hour through the end of 2013.
Joe Hurd, president and CEO of the Blair County Chamber of Commerce, said he is not concerned that Penelec's rate continues to drop.
"I would say that the expectation over the long haul is that the rate [ours] will be one that will be difficult to beat. We are sticking with that line of thinking," Hurd said. "We consider the rates the people have locked in to be a very safe investment despite the fact the Penelec price to compare seems to fluctuate. That leads us to believe this is the safe and more economical way to go."
Surgeoner said at some point the Penelec rates likely will increase.
"There are signs the economy is beginning to pick up and that will lead to higher prices we believe," Surgeoner said.
Mirror Staff Writer Walt Frank is at 946-7467.