Energy insights Featured

10:02am EDT July 22, 2002

The good news is that Pennsylvania's Electricity Choice program is under way, and thousands of southwestern Pennsylvania small businesses are participating. The bad news is that actually shopping for an electricity supplier is turning out to be confusing and frustrating.

In some cases, problems are the unavoidable consequence of doing something completely new. In other instances, however, there is needless complication due to utility company bumbling and/or obstructionism.

To generate maximum electricity - shopping leverage for our combined 12,000 member-companies, SMC and the Manufacturers Association of Northwestern Pennsylvania recently partnered with Pittsburgh-based Strategic Energy Limited (SEL). SEL is Public Utility Commission-licensed and has a unique approach: Rather than marketing electricity for a single power generator, it shops all suppliers to find the cheapest electricity for its customers.

The theory behind partnering with SEL was that its electricity shopping on behalf of an aggregation of hundreds of small and mid-sized member-companies would deliver cost savings the individual companies could not get alone. Results are proving that correct, but unexpected problems are slowing progress, particularly for companies shopping themselves.

On the utility side of electricity choice, Duquesne Light had done a first-rate job preparing both its residential and commercial customers. Duquesne Light customers who enrolled in the state's new electricity choice program have received a timely confirmation letter and a detailed summary of their past 12 months' electricity consumption. The summary contains all the numbers an electricity supplier needs to quote a price.

However, Allegheny Power and Penn Power have failed to provide adequate or timely information to their affected customers. Whether this was due to incompetence or deliberate obstructionism, the PUC should have - but has not - penalized the two utilities. Instead, Allegheny Power and Penn Power customers have been forced to scramble through their files, looking for copies of their past 12 months' electricity bills. This paper chase has significantly slowed the progress of electricity choice for thousands of companies and homeowners.

A serious problem has also developed among electric suppliers. Although as many as 75 suppliers have been licensed by the PUC, only a few are selling electricity in western Pennsylvania. For instance, it was three weeks into the Electricity Choice program before SMC could locate a cost-effective electricity supplier for its home-based business owners.

True, residential customers aren't generally as attractive to power marketers as high-kilowatt commercial customers. But there is relatively little interest in commercial customers, either. For reasons still not completely clear, few active players exist in the electricity marketplace. Strategic Energy Limited is one of those few, and it is being absolutely overwhelmed by business owners and managers who can't find any other cost-effective source of power.

To be sure, no one is threatened with the lights going out. Our local utilities will still supply electricity - at the usual prices. But needless consumer frustration and confusion is being caused by (some) utility companies' lack of cooperation, and marketplace distortions of mysterious origin are hampering progress, too. To ensure that Pennsylvania's pioneering electricity choice program succeeds, the PUC needs to step in, ferret out obstacles, and, if necessary, rattle some cages.

Cliff Shannon is president of SMC Business Councils.