A Quick Lesson For Utility Customers From Chambersburg
A little article has been getting around singing the praises of Chambersburg’s municipal utility. Not that Chambersburg or any of Pennsylvania’s other 34 municipal systems are bad. Their rates can often beat the default service rates from electric distribution companies (EDC). But the article hints that prices in Chambersburg’s utility system are comparable if not better-ish than the retail electric generation suppliers in the deregulated parts of Pennsylvania.
Sure, that sounds amazing. But there’s a few things Chambersburg did that savvy consumers shopping for cheap electricity have been doing for a long time.
A Quick Lesson About PA Munis
As in many other states, the Pennsylvania Public Utilities Commission does not have jurisdiction over electric utilities owned and operated by cities, boroughs or townships. Because Munis are non-profit systems with a scope of business that ends at their borders, there’s no oversight. Consequently, munis are allowed to act pretty independently for the good of their communities with elected officials setting the electric rates, fees, rules and policies. In fact, as per PA law, muni utility customers are prohibited from shopping for their own electricity. At first blush, that sounds like a potential trap for customers because munis can raise rates at will. In some recent cases, munis have resorted to funding their general budget shortfalls by their hiking electric rates.
A Quick Lesson For Utility Customers
The news story cites a study performed by Utility Engineers PC for the Pennsylvania Municipal Electric Association compared the retail cost of 1,000 kwh of electricity using the Price to Compare, which is the default service from the state’s local utilities, the EDC’s. Of the state’s seven EDC rates for 2016 default service of 1,000 kWh, West Penn Power’s rate came in the lowest, $117.59. Chambersburg easily beat that with $100.90 per 1,000 kwh.
How’s that even possible?
Three big little words: shop, choice, and fixed.
Instead of clinging to a single central utility as in the past, Chambersburg decided to shop around for the best competitive rates. While the borough does generate a small amount of power, it buys practically all of its electricity from about 20 different energy suppliers. Instead of just going from month to month, it signed onto long term power purchase agreements that lock-in prices for several years.
Plus, one perk the borough managed to land was having its electricity delivered to a substation within its own power system. This allows it to avoid paying additional delivery or congestion fees. According to their analysis, Chambersburg estimates their transmission charges for 2016 came in at about 5.5¢/kWh — one of the lowest in the state.
Now, of course Chambersburg is not just another Pennsylvania electricity consumer. It’s a large community of over 11,000 people with it’s own state permitted utility and grid. It’s also true that because it’s buying supply from multiple suppliers, the borough has more in common with a retail provider. And lastly, the majority of Pennsylvania homeowners don’t own power substations that let them bypass paying transmission charges — that’s probably a good thing just from the lawn care alone.
But the big lesson here is that, like many homeowners and businesses, Chambersburg wanted better rates so the borough chose to act to find a better solution. It compared offers and shopped around for the best deal that worked for its situation. Instead of rolling the dice on an increasingly volatile market, it chose fixed rates for a long term that provided a stable, predictable price. And lastly, it managed to land some great money-saving deals.
Chambersburg had to shop for its money saving deal practically all by itself. You don’t have to.
This is why we created Pennsylvania Energy Ratings. It’s a place where people can come to research, learn, and share their own stories of the different Pennsylvania electricity providers. Our mission is to provide not only a useful place for folks to compare the different prices on available electricity plans but to create a community with one goal: to provide all of the resources and information that help people find the best electricity plan that fits their needs.
Originally published at PA Energy Ratings: The Blog.
