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Peco Energy Co., the largest of the utility companies operating in Pennsylvania, recently released forecasts predicting electricity rates should fall in coming months, according to The Philadelphia Inquirer.
With fuel prices comparatively high, electricity prices rose in many regions around the country, from Wallingford, Connecticut, to San Diego, California. MSNBC reports that a growing number of energy experts expect rising electricity demand and limited added capacity to put strong upward pressure on electricity prices for the foreseeable future.
MSNBC cited a review that found a group of 16 utilities looking for rate increases of at least 5 percent, with eight requesting a 10 percent increase. One utility company in Alaska raised rates 24 percent to cover the costs of a new plant.
Many deregulation policies incorporate automatic price adjustments for fuel prices, so some deregulated regions have seen prices rise at times to cover these costs. Peco was among these companies forced to raise rates.
The spike surprised many in Pennsylvania, largely because the newly adopted deregulation policy allowed Peco to compensate in this quarter for its inability to vary prices earlier in the year when fuel prices spiked, leading to a 7 percent increase in rates in October.
However, the other new aspect for residents is the sudden shift to regularly fluctuating electricity rates to accommodate changes in the market. Yet, while the abrupt change might have shocked some of Peco's 1.6 million customers, a new report from the utility illustrates how beneficial the change can prove for consumers.
With fuel prices continuing to fall from their recent peaks this past spring, the company expects lower electricity rates starting as soon as January 1 and potentially continuing later into 2012. These types of corrections will occur automatically as utilities respond to changes in their costs, automatically passing on savings.
The key for consumers comes when considering new electricity suppliers. Peco still offers discounted rates for some customers, but many have switched to alternative electricity providers. The Peco forecast illustrates the importance of being aware of the seasonal trends in electricity rates and choosing a supplier that allows customers to take advantage of these variations.
"We would hope that anybody who is shopping would do their due diligence," Jennifer Kocher, a spokeswoman for the Pennsylvania Public Utility Commission, told the Inquirer.