Default Service Pricing

The Pennsylvania Public Utility Commission alerted consumers that June 1 marks the date on which most electric utilities adjust the electric generation prices that they charge their so-called nonshopping (or default service) customers for the summer period. The commission remarked that, statewide, nearly 2.1 million residential and business customers receive their electric generation supply from competitive providers, representing approximately two-thirds of the state's entire electric load.

From the commission's perspective, the upcoming price changes, combined with the increased use of electricity that typically accompanies the summer season, presented an opportune time for consumers to reassess their energy options. The commission pointed out that in most areas of Pennsylvania, consumers can choose who supplies their electricity, based on lowest price or other factors, such as reliance on renewable resources.

While encouraging customers to consider going with an alternative electric supplier, the commission noted that those ratepayers who do not affirmatively select a competitive electric generation supplier will continue to receive default service from their incumbent utility, with the cost per kilowatt-hour being billed as a passthrough cost to the customer based on wholesale market prices.

The commission observed that, by law, a utility cannot make a profit on the generation component of service. The commission also drew attention to the fact that it does not control or regulate the price of the generation portion of electric bills. The commission thus warned that when generation prices do change, consumers often see an increase in supplier offers being promoted via door-to-door sales in neighborhoods, over the phone, through the mail, or online.

Although urging consumers to thoroughly review their options and understand all terms and conditions before entering into any supplier contract, the commission simultaneously noted that it has instituted enhanced consumer protections. Among the protections, the commission said, are regulations that allow customers to switch suppliers, or return to default service, in as few as three business days once the utility has been notified.