Why Do Cheap PA Electricity Rates Depend on My Local Utility?

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A total of 11 different electric utilities deliver electricity to home in Pennsylvania but none offer the same rate for the same service. Why is that?
A total of 8 major utility companies, PECO, PPL, Met ED, UGI, PenElec, West Penn Power, Duquesne, and Pennsylvania Power, all run a piece of the Pennsylvania electricity market. But why do none of them offer the same rates for the same service?

Why are there so many different energy rates in Pennsylvania?

Have you ever wondered why your neighbors pay a different rate of electricity than you? And why does the family living across the street pay something different entirely? The reason for this comes down to the utility service territories in Pennsylvania. Not counting rural electrical cooperatives, Pennsylvania is carved up into 11 different territories run by different electric companies, the bulk of which is operated by 8 major utility companies. For example, consumers living in Philadelphia get their electricity from PECO Energy Co., while consumers living in Columbia get theirs from PPL Utilities Corp. However, some counties may get their energy from several utilities, and depending on where you live, your utility could be different from your friends living across town. Consumers in Montgomery, for example, are divided across three different companies; PECO Energy Co., PPL Utilities Corp. and Metropolitan Edison Co.

But what does all that mean? Why does my neighbor in the PECO distribution zone pay less than I do in PPL?

Who decides energy rates in Pennsylvania?

Electric services in Pennsylvania are overseen by the Pennsylvania Public Utility Commission. They are the people who regulate the utility rates that everyone in Pennsylvania must pay for their electricity. Utilities such as PECO and PPL must take their individual rate cases to the PPUC and have them approved. Such rate cases include their ‘price to compare’ and their distribution charges. These charges can vary due to a number of factors, such as the cost of maintaining the distribution grid, and how much energy is available to buy in a certain area. So while PECO has a current ‘price to compare’ of 7.15 cents per kWh, PPL’s ‘price to compare’ comes in at 7.449 cents per kWh. How does that happen?

Local utilities buy their electricity at auctions every six months, so the rate they charge also changes twice a year. Rate auctions results, the prices for electricity, must be approved by the PUC. This is why your neighbor in the PECO distribution zone pays a different amount for energy than you do in the PPL zone.

So how can I save money on my electric bill in Pennsylvania?

You can’t change what your local utility charges for its distribution rate for your electricity, but consumers in Pennsylvania have the right to shop for their electricity supplier, just like you would for a cell phone, cable or insurance. Pennsylvania residents can change their suppliers at will to find a cheaper price on their electric bills. You can compare plans quickly and easily right now and find the best deal for your individual needs by heading over to https://www.paenergyratings.com/electricity-rates to find the cheapest PA electric plans right now.

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