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Copyright 2000 P.G. Publishing Co.  
Pittsburgh Post-Gazette

April 23, 2000, Sunday, TWO STAR EDITION

SECTION: BUSINESS, Pg. C-1

LENGTH: 2601 words

HEADLINE: TAKING THE CONFUSION OUT OF ELECTRIC CHOICE;
THERE ARE SOME SIMPLE STEPS EVERYONE CAN TAKE TO MAKE CHOOSING AN ELECTRICITY;
SUPPLIER A BREEZE

BYLINE: FRANK REEVES, POST-GAZETTE STAFF WRITER

BODY:


The "digital divide" has grabbed a lot of headlines recently. Last week, for example, President Clinton visited a Navajo reservation in northwest New Mexico to dramatize the disparity in computer access between America's poor and affluent.

But closer to home, Sue Soltis and her colleagues at the nonprofit Dollar Energy Fund cite another information gap they find troubling -- the disparity between Pennsylvania consumers who understand what electric utility industry deregulation has wrought and those who are bewildered by it all.

Founded in 1983, the Dollar Energy Fund's primary mission is still to provide cash assistance to needy families to help them pay their utility bills. Last year, it assisted more than 10,000 families and distributed nearly $ 3 million. But the onset of electric competition has prompted the fund, whose budget is largely paid for by utility companies and customer donations, to broaden its mission. In 1998, it was hired by Allegheny Power and GPU Energy to establish consumer-education programs on electric choice for customers they consider hard to reach: people on fixed or limited income, people living in rural areas and senior citizens.

The Dollar Energy Fund's efforts appear to have hit their target.

Polls indicate that the overwhelming majority of Pennsylvanians have heard about electric competition. Last fall, in a telephone survey of 1,200 people, 94 percent said they were aware that they were entitled to choose the company that generates their electricity.

But the same poll, conducted on behalf of the Pennsylvania Public Utility Commission, also indicated that fewer than half claimed to know how to go about switching electric suppliers if they decided to.

These days, Soltis, one of the fund's energy educators, is a frequent speaker at senior citizen clubs and community meetings throughout Allegheny Power's service area.

On Thursday, she spoke to a senior citizens club luncheon at the Evangel Heights Assembly of God Church in Sarver, Butler County.

Dressed in white overalls, a tool belt wrapped around her waist and a white hard hat atop her head, Soltis began her breezy presentation. She uses deliberately bad puns, wisecracks and a bag full of props to explain the sometimes arcane world of electric choice.

"Can't you tell I've always wanted to be a stand-up comic?" she asks.

The club members nod their heads and laugh.

Soltis said one of the most frequently asked questions she gets is from people who want to know whether they have to choose an electric supplier.

"No," she tells them.

And if they don't switch suppliers, many want to know, will they be without electricity?

Again, she tells them, "No." Their local electric company is still responsible for supplying them with electricity.

Understanding the basics

To understand electric choice, one must begin with a few basics.

When we pay our electric bills, generally speaking, we are paying for three things: the cost of generating electricity, the cost of transmitting electricity from a power plant to our community and the cost of delivering that electricity directly into our homes.

For years, one local electric company provided all three services. Depending on where you live in southwestern Pennsylvania, it was either Duquesne Light, Allegheny Power (formerly West Penn Power) or Penn Power.

These companies were monopolies. In the areas they served, they had no competitors. The rates they charged customers were set by the state Public Utility Commission, often after protracted negotiations between the companies and state regulators. Besides electric utilities, the PUC regulates gas, telephone and water companies.

All this started to change in December 1996, when the Pennsylvania Legislature passed a law opening the electric generation business to competition.

Gradually, customers in areas served by Allegheny Power, Duquesne Light and Penn Power were allowed to shop around for an electric supplier, with the price a company charged to generate electricity no longer fixed by the PUC. Now everyone can choose the company that makes the electricity they use.

However, local electric utility companies still are responsible for transmitting and delivering electricity in their service areas.

Just as before, they remain responsible for reading a customer's meter and responding to calls when electric power is knocked out.

And even if a customer chooses to switch electric suppliers, local electric companies are still responsible for providing the customer with electricity if one of the new suppliers goes out of business.

Last year, DQE, the parent company of Duquesne Light, agreed to sell its electric power plants to Orion Power Holdings for $ 1.7 billion. But the deal also required Orion to become the back-up supplier of electricity in the areas served by Duquesne Light.

Electric deregulation essentially has meant that areas once served exclusively by a single company are now open to "licensed competitors" which apply to the PUC for that right. In Duquesne Light's service area, for example, there are six companies in addition to Duquesne which are licensed to supply electricity. In Allegheny Power's service area, there are five companies in addition to Allegheny.

The PUC and the Office of Consumer Advocate maintain updated lists of licensed suppliers. The phone numbers and Internet address of their offices can be found at this end of this article.

What am I paying now?

Before deciding whether to switch suppliers, the first thing to find out is how much one's local electric company charges to supply electricity to its residential customers.

In electric-choice lingo, this is called "the price to compare." And the price to compare is measured in the price per kilowatt hour.

The charts on the front page of today's Business section show how much residential customers of Duquesne Light and Allegheny Power are charged for electric generation (as of March 31; rates can and do change among all the utilities).

For example, the charts show that Allegheny Power charges its residential customers 3.243 cents a kilowatt hour, while Duquesne Light charges 4.75 cents per kilowatt hour, with one exception: Duquesne customers who have electric heat pay 6.43 cents per kilowatt hour for the first 500 kilowatt hours; after that, the rate drops to 2.21 cents.

To compare one company with another, take your average monthly usage of electricity and multiply it by the rates of the different licensed competitors. For example, a Duquesne Light residential customer who uses 500 kilowatts of electricity a month would pay $ 23.75 for electric generation. If that customer were to choose Utility.com, he or she would pay $ 19 a month.

Straight comparisons between the price per kilowatt hour aren't always the whole story. Suppliers will sometimes add monthly fees that aren't reflected in the kilowatt-per- hour price comparisons that are shown in the charts.

In addition, suppliers sometimes charge different rates depending on the type of energy used to generate the electricity they are selling. If one wants electricity that is generated by a wind- or water-driven generator, one might have to pay more.

Questions?

Before deciding to switch, there are many questions one should ask a supplier. A list of some of these questions can be found in the chart on this page.

Picking a supplier is as easy as making a phone call or clicking onto the Internet. Many have toll-free numbers and Web sites. These also are listed on the charts on the front page of today's section. The information is based on data from the Office of Consumer Advocate.

Once a supplier is contacted, the company should send a contract detailing the terms of the agreement. Once you receive a contract, you have three days to cancel it.

The supplier is supposed to notify the local electric company.

It is easy to forget that what an electric utility charges to generate electricity is only part of one's bill. One must still pay for the cost of transmitting and distributing the electricity.

Transition costs

In recent years, many have noticed that they also must pay for stranded costs. Sometimes these are called transition costs.

Customers have been paying these costs all along. But two years ago, the PUC starting requiring electric companies to post these costs separately on customers' bills.

In the case of Duquesne Light, for example, these stranded costs represent heavy investments in new power plants made by the utility in anticipation of what it thought was going to be an expansion of the steel industry. Instead, Big Steel collapsed and demand for the new capacity never materialized. So the PUC allowed Duquesne to recoup these investment costs from its customers.

By next year, Duquesne officials said they intend to eliminate the charge to customers for stranded costs, largely because of its decision to sell its power-generating facilities.

Take the quiz

Soltis ends her workshop with a quiz, prepared by Dollar Energy Fund and Allegheny Power. It's a test no one is supposed to fail.

She reads off the list of true-and-false questions and asks her audience to check off the answers on their work sheets.

1. The part of electric service you will be able to shop for is called generation. True or False?

2. In order to save money, you need to find a price for electric generation that is lower than your electric company's "price to compare." True or False?

3. If there's a storm and your electric power goes off, you should call your local electric company to restore your service. True or false?

4. If you don't choose an electric generation supplier, you will still have electric service delivered to you by your local electric company. True or false?

If you're still scratching your head over the questions, the answer is "true" in every case. Comparing power suppliers As of March 31, 2000 Penn Power vs. licensed competitors Penn Power - * $ 25.78 (800) 451-9739 www.pennpower.com *For Penn Power customers, each customer's price to compare varies, based on both usage (kWh) and monthly peak demand (kW). The numbers on this chart for customers who continue to purchase generation from Penn Power reflect average usage and demand characteristics. The numbers for competitive suppliers on this chart only vary by usage, not demand. You received your individual price to compare from Penn Power and you can receive it again by contacting Penn Power directly. Allegheny Energy Supply - 3.90o $ 19.50 (888) 232-4642 www.alleghenyenergysupply.com< Electricitychoice.com standard 3.872o $ 19.36 (877) 324-6673 50% 6.10o $ 30.50 www.electricitychoice.com Beginning July 1, 2000, the 50% renewable price will include a $ 3.95< monthly charge not reflected here.< FirstEnergy Services - 5.30o $ 26.50 (888) 254-9227< www.firstenergyservices.com< GreenMountain.com 1% 5.20o $ 26.00 (888) 246-6730 50% 6.10o $ 30.50 www.GreenMountain.com 100% 6.49o $ 32.45 Beginning July 1, 2000, the 50% renewable price will include a $ 3.95< monthly charge not reflected here.< Penn Power Energy - 5.30o $ 26.50 (800) 964-6568 www.pennpowerenergy.com Utility.com - 3.872o $ 19.36 (800) 884-5489 www.utility.com Internet billing only Allegheny Power vs. licensed competitors Allegheny Power - 3.243o $ 16.22 (800) 255-3443 www.alleghenypower.com Electricitychoice.com standard 2.594o $ 12.97 (877) 324-6673 50% 6.10o $ 30.50 www.electricitychoice.com Beginning July 1, 2000, the 50%< renewable price will include a $ 3.95 monthly charge not reflected here.< FirstEnergy Services - 5.10o $ 25.50 (888) 254-9227< www.firstenergyservices.com< GreenMountain.com 1% 5.20o $ 26.00 (888) 246-6730 50% 6.10o $ 30.50 www.GreenMountain.com 100% 6.49o $ 32.45 Beginning July 1, 2000, the 50% renewable price will include a $ 3.95< monthly charge not reflected here.< Penn Power Energy - 5.10o $ 25.50 (800) 964-6568 www.pennpowerenergy.com Utility.com - 2.594o $ 12.97 (800) 884-5489 www.utility.com Internet billing only Duquesne Light vs. licensed competitors (Regular residential service) Duquesne Light - 4.75o $ 23.75 (888) 756-0887 www.dqe.com Allegheny Energy Supply - 4.10o $ 20.50 (888) 232-4642 www.alleghenyenergysupply.com< Electricitychoice.com standard 3.80o $ 19.00 (877) 324-6673 50% 6.10o $ 30.50 www.electricitychoice.com Beginning July 1, 2000, the 50% renewable price will< include a $ 3.95 monthly charge not reflected here.< FirstEnergy Services - 5.80o $ 29.00 (888) 254-9227< www.firstenergyservices.com< GreenMountain.com 1% 5.30o $ 26.50 (888) 246-6730 50% 6.10o $ 30.50 www.GreenMountain.com 100% 6.49o $ 32.45 Beginning July 1, 2000, the 50% renewable price will include a $ 3.95 monthly charge not reflected here.< Penn Power Energy - 5.80o $ 29.00 (800) 964-6568 www.pennpowerenergy.com Utility.com - 3.80o $ 19.00 (800) 884-5489 www.utility.com Internet billing only Duquesne Light vs. licensed competitors (Residential heating service) Duquesne Light - 4.15o< (888) 756-0887 (Average) www.dqe.com - 6.043o $ 30.22< (May - Oct.) - 6.043o $ 30.22* *Over 500 kWh 2.21o per kWh (Nov. - April)< < Allegheny Energy Supply - 4.10o $ 20.50 (888) 232-4642 www.alleghenyenergysupply.com< Electricitychoice.com standard 3.32o $ 16.60 (877) 324-6673 50% 5.88o $ 29.40 www.electricitychoice.com Beginning July 1, 2000, the 50% renewable price will< include a $ 3.95 monthly charge not reflected here.< FirstEnergy Services - 5.80o $ 29.00 (888) 254-9227< www.firstenergyservices.com< GreenMountain.com 1% 5.30o $ 26.50 (888) 246-6730 50% 6.10o $ 30.50 www.GreenMountain.com 100% 6.49o $ 32.45 Beginning July 1, 2000, the 50% renewable price will include a $ 3.95 monthly charge not reflected here.< Penn Power Energy - 5.80o $ 29.00 (800) 964-6568 www.pennpowerenergy.com Utility.com - 3.32o $ 16.60 (800) 884-5489 www.utility.com Internet billing only Questions to ask a supplier In December 1996, the Pennsylvania legislature passed the Electricity Generation Customer Choice and Competition Act. This opens Pennsylvania's electric generation service to competition.< < Some questions to ask the supplier before signing an agreement: Is the supplier licensed by the Public Utility Commission (PUC)? What is the length of the agreement? Will the price offered by the supplier remain the same throughout that time? Is there a penalty for canceling an agreement before its term is up? What steps must you take to switch suppliers? Must you pay a fee or penalty to switch suppliers? Are there restrictions on how much electricity you use and when you use it? Is the supplier's price per kilowatt-hour the only charge, or are there other fees involved? 4Are taxes included in the supplier's price for generation supply? Do you need a special meter and is there an added charge for that meter? Can you have an interruptible rate if you want one? Is there a basic or limited service rate that is less expensive? Will you still get service from a supplier if you have an outstanding balance or bad payment history? Does the supplier offer a budget billing plan? Will you receive one bill or two?

For more information about electric choice, try: The Pennsylvania Utility Commission, 1-888-782-3228 (1-888-PUC-FACT), or www.electrichoice.com; The Pennsylvania Office of Consumer Advocate, 1-717-783-5048, or 1-800-684-6560 (Toll free number will be in operation beginning tomorrow after 8 a.m.), or www.oca.state.pa.us.

GRAPHIC: PHOTO 2 CHART 4, Photo: Andy Starnes/Post-Gazette: Senior citizens in Freeport listen; during the Guide for Consumers seminar on electric choice, developed by; Allegheny Power and Dollar Energy Fund. From left are, Lucille Sarver, Jane; Dodds and Dorothy Faith.; Photo: Andy Starnes/Post-Gazette: Sue Soltis, an energy educator for the; Dollar Energy Fund, holds up up a prop of a power plant while explaining; electric choice options to a group of senior citizens in Freeport.; Chart: Pa. Office of Consumer Adocate; James Hilston/Post-Gazette: (for two; charts) Comparing power suppliers; Chart: Public Utility commission; James Hilston/Post-Gazette: (Questions to; ask a supplier); Chart: Public Utility Commission Graphic: James; Hilston/Post-Gazette:(Questions to ask a supplier)

LOAD-DATE: May 10, 2000