A few days ago, Energy Consumers First went on the road to the home improvement show at the York Expo Center in the heart of Met-Ed (FirstEnergy) country. Over a couple of days, I had the honor to talk to probably hundreds of citizens about energy choice.
And, I got an earful. York Countians told me they are disappointed by the lack of choice they’ve seen to date in the FirstEnergy territory which was opened up to the competition on January 1. Thus far, they have a choice of only two competitive electric suppliers – FirstEnergy Solutions (the power supply affiliate of FirstEnergy, their distribution utility) and one other. Many savvy consumers know that just next door in PPL territory, there are more than a half dozen companies competing for the electric supply business.
Consumers wonder why this is.
To be fair, competition is young in FirstEnergy territory. But the situation is also complicated by the proposed merger of FirstEnergy with Allegheny Power, which would make the combined company the largest of its kind in the Keystone State, serving all or part of 50 of 67 counties and over 2 million customers.
And, just maybe, some competitive suppliers are wary of going up against FirstEnergy, because they see how weak the competitive market has been in FirstEnergy’s home state of Ohio. There, competitive energy suppliers complain that FirstEnergy makes it difficult for customers to switch power suppliers.
Fortunately for consumers, Pennsylvania is not Ohio. The PA Public Utility Commission, right now, is in a position to ensure more competition than we’ve seen in Ohio as part of its authority to approve or disapprove the proposed merger with Allegheny Power.
One way to help ensure a level playing field for all competitive energy suppliers is to do something in the proposed FirstEnergy/Allegheny Power territory about the way the so-called “default provider pool” is handled. In most cases, the default provider is the energy-generating affiliate of the local electric distribution company.
The “default provider pool” is made up of customers who don’t choose a power supply source. It’s sort of like saying to the pharmacist, “I’ll take the generic equivalent of the brand name drug,” only you don’t get the highly discounted price. Statewide, about three out of four customers don’t choose a competitive provider.
The thing is that for all of us consumers, that’s “leaving money on the table.” As consumers, we are valuable assets to power suppliers. Some power companies are more than willing to participate in an auction of “default pool” customers.
In one proposal now under consideration at the PUC, power suppliers would bid on blocks of customers – in multiples of say, 25,000 or 50,000 at a time. The money paid by the high bidders would then be divided, pro rata, among all customers in the service area. Estimates are that an auction of customers in the FirstEnergy/Allegheny territory could fetch enough money to pay upfront rebates of $150 to $500 per household.
Just as important, over the long haul, it would bring “robust competition” to FirstEnergy country and make my new York County friends very happy.