Penelec customers will see a significant increase in their price of electricity beginning Sunday.
The residential rate for electricity will increase from 7.73 cents per kilowatt hour to 9.28 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 or her bill increase from $95.60 to $107.19, a 12 percent increase, Surgeoner said.
"Although the price to compare is up 20 percent, the overall bill will increase only 12 percent because the generation part makes up 65 to 75 percent of a customers bill," Surgeoner said.
There are two primary reasons for the price increase.
"Prices move higher in the summer due to the air conditioning load in the eastern United States, but the biggest impact is we are required by our default service plan, approved by the Pennsylvania Public Utility Commission, to buy 10 percent of the electricity we sell to default customers who don't shop on the spot market. The time when we were required to buy that electricity was during the polar vortex in January, and that had a significant impact," Surgeoner said.
Surgeoner said he doesn't expect to see a similar increase when the price to compare changes again in September.
"This was a rare exception, a combination of summer prices and the polar vortex impact as well," Surgeoner said.
Penelec is not the only electric utility whose prices will be increasing next week.
"If you have not chosen a competitive supplier, now may be a good time to do so because the price of electricity from the utilities is estimated to increase by as much as 50 percent for some customers," PUC Chairman Robert F. Powelson said in a release this month. "Before the heat of summer brings increased electric usage, now is the time for customers to again take stock of their electric bills, review their generation rate and shop for a better price or price stability."
When electricity caps expired Dec. 31, 2010, Penelec increased the rate from 5.7 cents 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 to minimize spikes and deep valleys.
For the Altoona area, there are 29 providers in addition to Penelec. The other providers' rates for the area, according to PAPowerSwitch.com, range from American Power & Gas of Pennsylvania LLC at 6.50 cents per kilowatt hour (variable rate) to Starion Energy Pa. Inc. at 21.97 cents per kilowatt hour (variable rate). To date, more than 2.1 million Pennsylvanians have switched electric suppliers.
The new Penelec price to compare is significantly higher than the price being offered through the Blair County Chamber of Commerce residential program. The present program being offered is 7.45 cents per kilowatt hour through December 2016, said Cheryl Hefft, marketing manager for the Eastern Region of OnDemand Energy, which along with Chamber Choice unveiled the residential program.
"Our intention all along has been to save our members money and to encourage people to recommit the money they save to spur the local economy by buying locally. By locking in the lower rate, the savings are now extreme. We feel good about helping those people who trusted our program and stayed with it when Penelec's price-to-compare dipped below our rate last summer," chamber president and CEO Joe Hurd said.
Penelec continues to urge customers to shop for their supplier.
"People just need to be sure what they are getting into as far as the terms and whether the price is fixed or variable," Surgeoner said.
Anyone interested in the chamber program should call 866-699-9968 or register online at www.ondemandenergy.com.