MetEd Announces New Price to Compare

MetEd’s Price to Compare is the total of the Generation Charge + Alternative Energy Portfolio Standard + Transmission Charge.  You can read the entire filing by clicking here.

The default service Price to Compare has increased as follows

For the period March 1, 2013 through May 31, 2013

  • General Service (GS): 7.921¢/kWh
  • Residential (RS, RT): 8.665¢/kWh

PECO Price to Compare

Transformer-214-x-424PECO’s Price to Compare is the total of the Generation Charge + Alternative Energy Portfolio Standard + Transmission Charge.

For the period January 1, 2013 through March 31, 2013

  • General Service (GS): 9.17¢/kWh
  • Primary – Distribution Power (PD): 8.20¢/kWh

For the period April 1, 2013 through May 31, 2013- ESTIMATED

  • Small General Service (GS): 10.88¢/kWh
  • Medium and Large General Service (GS): 6.84¢/kWh
  • Primary – Distribution Power (PD): 9.89¢/kWh

For Large Commercial and Industrial customers on Hourly Pricing with demand >500KW

  • January: General Service (GS): LMP plus 1.91¢/kWh
  • February: General Service (GS): LMP plus 2.61¢/kWh
  • March: General Service (GS): LMP plus 3.92¢/kWh

Note that the Price to Compare includes an adjustment for the 5.90% GRT (Gross Receipts Tax)

To obtain a fixed price electricity supply quote, contact Better Cost Control.

Making Sense of the Present Electricity Market


  • Regional issues are ruling the day, when it comes to understanding today’s electricity market– gas & power correlations remain critical, but we continue to see increased frequency of separation.  There are fundamental factors that are behind this trend:
    • Northeast basis – too much info on this to put in this blog posting, but the short-story is that the region is short gas pipeline capacity and this year’s cold temps and pipeline constraints have caused huge gas spikes to New England (several days in $20-30 range) and to a less extent New York Zone 6 (>$20).  Day-ahead power has moved with gas with some spikes near $200/MWh. This is impacting long-term prices.  Unfortunately, the pipeline constraints are unlikely to be resolved in the near-term.
    • ERCOT Resource Adequacy – this issue is also not going away as ERCOT is expected to remain below is target for reserve margins and the increased offer caps are not expected to resolve the problem.  So do not expect summer premiums to disappear and there will be ongoing discussion on solutions to the problem.  Regulatory news and summer price spikes will both impact forwards.
    • PJM Capacity –the wholesale energy prices in the market remain low, but capacity prices vary greatly within the ISO – rising for most of the West and falling for the East over the next 2 years with certain areaa having exceptional spikes (ATSI).  Note that we have updated capacity charts that clearly illustrate this trend.
    • California Cap & Trade & SONGS outage- ongoing strength in forwards as Cap & Trade has been implemented and there is still tremendous uncertainty regarding SONGS, which has been shut down for almost one year.
  • Customer message:  The overall message is straightforward, but may be difficult for customers to accept since many have had consistent year-over-year price declines since the peak of 2008.
    • Year-over-year declines in gas have stopped with 2012 likely being the bottom.
    • Rangebound gas behavior for the near-term with modestly higher prices possible for 2014.
      • It makes sense that natural gas futures are higher than a year ago, but below long-term averages.  And we expect this to continue.  So don’t count on another spring dip – it is very unlikely to see a repeat of April 2012.
    • Both upside and downside are limited by coal-to-gas, production economics, storage, etc.
    • Regional fundamentals are causing significant regional risks that must be considered.  If you only focus on natural gas, you are exposed to significant regional risks such as New England winter spikes and ERCOT summer spikes.
  • Regional issues may provide a better rationale for customers to contract their electricity now.

Pennelec New Price to Compare

Penelec Price to Compare, Effective December 1, 2012 for three months.

General Secondary – Non Demand Metered (GS-Small) 6.863 cents per kWh

General Secondary – Volunteer Fire Company 7.051 cents per kWh

General Secondary – Volunteer Fire Company Time of Day 7.051 cents per kWh

General Secondary – Demand Metered (GS-Medium) 6.863 cents per kWh

All-Electric School, Church or Hospital (H) 6.863 cents per kWh

Remember: Three month pricing exposes you to more price risk than a fixed price contract.  If you want to control your energy cost, paying a small insurancepremium to eliminate upward price movement may be an attractive option for you.

Met-Ed New Price to Compare For Three Month Period

Met-Ed Price to Compare, Effective December 1, 2012

General Secondary – Non Demand Metered (GS-Small) 9.133 cents per kWh

General Secondary – Volunteer Fire Company 8.900 cents per kWh

General Secondary – Volunteer Fire Company Time of Day 8.900 cents per kWh

General Secondary – Demand Metered (GS-Medium) 9.133 cents per kWh

Municipal Service (MS) 9.133 cents per kWh

Remember: Three month pricing exposes you to more price risk than a fixed price contract.  If you want to control your energy cost, paying a small insurance premium to eliminate upward price movement may be an attractive option for you.

Penn Power New Price to Compare

For the three month period beginning December 1, 2012:

General Secondary – Small (GS) 4.529 cents per kWh

General Secondary – Volunteer Fire Company 5.881 cents per kWh

General Secondary – Volunteer Fire Company Time of Day Option 6.922 cents per kWh,

On-Peak 5.308 cents per kWh, Off-Peak 5.793 Average ¢/kWh, based on 30% On/70% Off split

General Secondary – Medium (GSM) 4.529 cents per kWh

Remember: Three month pricing exposes you to more price risk than a fixed price contract. If you want to control your energy cost, paying a small insurancepremium to eliminate upward price movement may be an attractive option for you.

PPL Default Service Rates Will Fall on December 1, 2012

The Price to Compare for small commercial customers of PPL will fall on December 1.  The Price to Compare will be 10.206¢, a reduction from the previous price of 10.346¢.  These prices are only for the three month period December 2012 to February 2013.

Duquesne Light Files New Default Service Rate

Duquesne Light has filed with the Pennsylvania PUC updated generation rates for medium (25-300 kW metered demand) commercial and industrial (C&I) customers for the period of December 1, 2012 through May 31, 2013.

The new supply charge for medium C&I customers (Rates GS/GM and GMH, 25-300 kW) is 4.2486¢/kWh. This charge reflects base supply only, and not other components included in the Price to Compare.

Electricity Supplier Offers Fixed Rate for Seven Years in Pennsylvania

One of the many electricity suppliers offered by Better Cost Control, quietly introduced the longest-term fixed-rate deal ever offered to  customers since the retail market opened up to full-scale competition in Pennsylvania.  This fixed price offering is available in these electricity supplier areas:

  • MetEd
  • Duquesne
  • PECO
  • Penelec
  • PennPower
  • West Penn Power

Unlike other fixed-rate offers, which tend to demand higher prices for longer terms, this seven-year rate is among the lowest on the market right now. At 7.5 cents per kilowatt hour (kWh), it is 28.6 percent less than Peco’s current price of 10.5 cents per kWh.  Rates are different depending on your local electricity distribution company.

You get a good, low price that’s not going to change for seven years.  One reason they are able to offer such a low price is that this supplier actually owns generation assets, versus most suppliers that actually hedge prices with financial instruments such as derivatives.

Your local electricity company continues to provide billing and customer service as the distribution company.

The Pennsylvania Public Utility Commission currently lists many options on The offers include variable rates, fixed rates and green-energy options.

A long term contract will appeal to customers who want to set-it-and-forget-it.  They will never have to worry about a price increase for the entire seven year period.

Fixed-rate deals may be attractive right now to some customers who are about to be shocked with higher bills because of their utility’s quarterly price adjustment. For example. Peco’s supply charge went up 21.5 percent on October 1.  Peco says the rates will come back down to 8.81 cents per kWh on Jan. 1.

FirstEnergy Solutions says it can offer the price certainty because its parent company controls 20,000 megawatts of power-generation capacity and is looking to lock in long-term customers.

Power prices currently are at record lows, so locking in for the long-term is similar to refinancing a mortgage when interest rates hit bottom. There’s always a chance the rates could go lower, but it’s more likely they will go up.

But by making a seven-year commitment, customers may be limiting their future options. Peco is currently installing smart meters that will allow suppliers to offer hourly pricing next year, which some customers may use to reduce their bills by shifting their discretionary electrical loads to off-peak hourly rates.

First Energy files for Default Service Price to Compare

First Energy just filed for new Default Service rates in Pennsylvania.  These will be the new Price-to-Compare for all commercial electricity customers to use when comparing competitive electricity price offers.

Assuming PUC approval, rate effective September 1, 2012 to November 30, 2012 will be:

MetEd Commercial: $0.07181 per kwh

Penelec: $0.06541

Penn Power: $0.05550

As of this writing, fixed priced electricity contracts through Better Cost Control will save the customer money for the period that First Energy filed.

You may wonder why the dramatic price difference between Penn Power and the other two companies.  This is due to the months that they contracted their tranches of electricity. Penn Power has only two tranches that were purchased at auctions in  Jan 2012 and March 2012, when prices were at their lowest.  The offer prices are based on a weighted average of the different contract periods:

MetEd: Tranches purchased May, 2011, October 2011, Jan 2012, May 2012

Penelec: Tranches purchased May 2011, Oct 2011, Jan 2012, Mar 2012

Penn Power: Tranches Jan 2012 auction and March 2012 auction

To obtain a quotation for electricity or natural gas, contact Better Cost Control.

PJM Electricity Interconnection Organization’s capacity locked in at price of $136 per MW

PJM’s capacity auction secured a record amount of new generation, demand response and energy efficiency resources for the 2015/2016 delivery year to keep the grid reliable as dozens of coal plants retire and are converted to natural gas.

The auction, known as the Reliability Pricing Model (RPM) auction, procured 164,561 megawatts (MW) of capacity resources at a base price of $136 per MW, compared to the price last year of $125.00 per MW.

Capacity prices were higher than last year’s because of the retirement of existing coal-fired generation, due to environmental regulations, which go into effect in 2015.

PJM serves 60 million people in 13 states in the Mid-Atlantic and Midwest and the District of Columbia. Capacity prices were higher in northern Ohio and the Mid-Atlantic region.

For the Mid-Atlantic, PJM said capacity will cost $167 per megawatt.

The Mid-Atlantic region includes utilities served by Pepco Holdings Inc’s Atlantic City Electric, Delmarva Power and Pepco; Exelon Corp’s Baltimore Gas and Electric and PECO; FirstEnergy’s Jersey Central Power and Light, Metropolitan Edison and Pennsylvania Electric; PPL Corp’s PPL Electric Utilities, Public Service Enterprise Group Inc’s Public Service Electric and Gas; and Consolidated Edison Inc’s Rockland Electric.

In FirstEnergy Corp’s northern Ohio territory, PJM said the capacity price will be $357 per megawatt due to the high number of power plant outages in that area.   With the exception of the AEP territory, Capacity is a fairly small component of the retail price of electricity, and the cost of capacity at the retail level tends to be averaged out over several years.


Why long term electricity contracts in PJM service area make sense

The inexperienced electricity buyer looks just at the price and goes with the lowest price. In today’s market (April 2012), shorter term contracts have the lowest price. But taking this approach can be short sighted. Why is that the case? First off, when you want to get a new contract in a year, your price will likely be a lot higher. As long as you know that, fine.  But there is more to understand.

In the PJM service area, one component of your fixed price are future capacity rates and trends. We are encouraging our customers to consider the longest term possible, up to a 24 month term, up to the period ending May 2015, to blend low energy prices against higher capacity rates. Locking in a longer term will protect you from the capacity price increases, which are a known number. So even if the energy cost is the same, the electricity prices will rise because of the rising capacity charges.  The higher capacity charge from next year is averaged into the present cost, which is one reason a longer term contract costs a bit more.  But when you look at your total cost over the 24-month period versus what they would be otherwise, based on the direction of the economy, you will win big overall and protect your budget.

PJM Capacity Cost Component

· June 2012/May 2013 $131.48 Per MWH
· June 2013/May 2014 $227.11 Per MWH
· June 2014/May 2015 $136.50 Per MWH
· June 2015/May 2016 Unknown at this time

· Capacity rates (set three years in advance by PJM) have increased to over $227 level for your next capacity rate contract term

· Recovering economy should keep capacity rates at least to the 2014/2015 level when PJM conducts next auction in May ‘12

· EPA’s plan for MAT (Mercury Air Toxin) rules have driven several generators to close 50’s vintage power plants due to high compliance cost coal plants exerting upward pressure on next auction. Less coal generation means higher prices, but cleaner air. Another reason to lock in a longer term contract.

Capacity charges are typically calculated based on the difference between a customer’s peak energy use during a billing period and their nominal use (normal or hour-to-hour use) during the same period. If the customer expects to have substantially more power available to them than they actually use, then a demand charge is applied to cover this difference.

Demand charges are not a means of gouging customers by charging for unused energy. Instead they are a means of insuring that customers can have larger-than-normal supplies of energy available to them at a moment’s notice.

Keep this information in mind when deciding what contract length you want. Take a long term view and next year you’ll be smiling at the decision you made. Consider the slight increase that you will pay in the short term your price for insurance against rising prices. Insurance costs money. Would you go without fire insurance because it costs money and you have never experienced a fire?