Pennsylvania’s electricity market became fully deregulated in 2011. All residents now have electric choice in the state, meaning that they can shop around for their electricity supply from various “retail electricity providers” in order to save money.
Prior to deregulation in Pennsylvania, electricity customers were required to purchase their electricity from the utility (or municipality) that services their respective areas. Generally, customers had only one rate plan option that was subject to fluctuate at any given time. Not surprisingly, electric rates in the state were higher prior to deregulation.
Pennsylvania residents are not required to switch to a retail electricity provider, but utility companies no longer have an incentive to supply electricity. By law, utilities can only profit from the distribution and transmission of electricity and not from the supply. And since the utilities more often charge higher rates than retail electricity providers, there is little reason to stay with the utility.
Because of deregulation, customers are now able to choose between various “retail electricity providers” in their service areas. Retail electricity providers essentially compete with each other for your business, and as they compete, electric prices are driven down.
Electric Choice Results in More than Cost Savings
Electric choice doesn’t just result in cost savings. Competition also drives the providers to create more customized and flexible plans as well as to offer other incentives to switch. When searching for a retail electricity provider, look for these value-adding incentives:
- Fixed rates that won’t increase during the duration of the plan
- Contract Durations that you are comfortable with (3, 6, 12, or 18-month terms)
- Special rates for first-time customers
- Free or Discounted Repair Services for your furnace or other energy-related appliances
- Bundled Services if you have a landline home phone – some companies can bundle telephone bills with local telephone providers at a lower cost
- Green Power options if you are seeking to be more environmentally conscious
Understanding Your Bill
No matter if the utility or a retail electricity provider supplies your electricity, there are two main charges on your electric bill:
- Transmission & Distribution
- Transmission and distribution charges are charged to you by the utility, no matter who supplies the electricity. These rates are overseen by Pennsylvania’s Public Utility Commission (PUC) and will not be affected if you choose to switch to a retail electricity provider.
- The supply portion of your bill is what you are able to shop around for. Supply charges are expressed in cents per kilowatt hour (kWh), and are charged to you by your retail electricity provider (or your utility, if you haven’t taken advantage of electric choice).
How to Take Advantage of Electric Choice
To find an electricity supplier with the best rates in your area, use our FREE tool in the orange box at the top of this page. Type in your Zip Code, select your utility, and view the best available rate options in your service area. Compare the supply rates that you are currently being charged with the rates offered by the prospective suppliers. Be sure to look for other incentives to switch that may add value to your plan. If you are currently receiving your electric supply from a retail electricity provider, make sure that the contract has expired before switching, unless there are no cancellation fees.