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Slammed by the State
When marketers move customers to a new energy supplier
without permission, it's called slamming. When state officials in
Pennsylvania pick customers at random and give them to a new supplier
unless they refuse to move, it's called choice.
One in every three residential electricity customers
of PECO Energy will experience that variety of choice this summer
as Pennsylvania tries to stave off the collapse of its retail competition
program.
Caught up in the weird politics of electric restructuring,
Philadelphia-based PECO agreed five years ago to shed half its customers
by this January as part of a complex deal allowing it to recover
more than $5 billion in the "stranded costs" of assets
believed to be unprofitable in a competitive environment.
Unfortunately for PECO, (see "weird politics,"
above) not many of its customers left. Possible reasons include
the sequenced 8- and 6-percent PECO rate reductions mandated under
Pennsylvania's restructuring law and the flight of alternative suppliers
from the Pennsylvania market when wholesale power prices rose a
couple of years ago, making it impossible for most of them to earn
a profit.
This spring, more than 50 competitive electricity
suppliers were still licensed to do business in Pennsylvania, but
aside from incumbent utilities, only two were actively marketing
their services. In April 2001, nearly 800,000 Pennsylvania customers
had alternative suppliers. Two years later, the number had dwindled
to about 276,000.
Last month, state regulators approved a plan to switch
randomly chosen PECO customers to the lowest-bidding competitors.
Some may continue paying their current rates and some may receive
discounts. Officials say no one will pay more.
Savings on monthly bills are expected to average about
44¢.
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