Pennsylvania allows consumers to choose their energy supplier. Is it worth it?
Stephen J. BronnerContributor
Stephen J. Bronner is a New York-based freelance writer, editor and reporter. Over his more than a decade in journalism, he has written about energy, local politics and schools, startup success tips, the packaged food industry, the science of work, personal finance and blockchain. His bylined work has appeared in Inverse, Kotaku, Entrepreneur, NextAdvisor and CNET, and op-eds written on behalf of his clients were published in Forbes, HR Dive, Fast Company, NASDAQ and MarketWatch. Stephen previously served as contributors editor and news editor for Entrepreneur.com, and was the VP, Content and Strategy, at Ditto PR. He enjoys video games and punk rock. See some of his work at stephenjbronner.com.
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But for Pennsylvania, where deregulation of the energy market went into effect in 2000, the benefits have been less clear, according to researchers from Harvard University and the University of Pennsylvania.
"We find substantial price increases for consumers in deregulated states relative to consumers in regulated states," the Harvard researchers wrote. "However, consistent with earlier findings, marginal costs declined in deregulated states, indicating that higher prices are driven by higher markups."
We'll help you find the best electricity rates in your area
This finding was confirmed by the University of Pennsylvania researchers, who said that although electricity prices fell below the national average in 2015, much of the savings were realized by commercial and industrial energy customers. "Statewide average annual retail electricity rates to residential shopping customers were higher than utility default service rates," they found.
Energy deregulation allows people to shop for energy suppliers, so there are savings to be had for those who find a good deal. The law also introduces options that weren't available prior to deregulation, including the ability to get electricity from renewables. Here's what you need to know to find the best price on electricity.
We'll help you find the best electricity rates in your area
Shop for electricity in Pennsylvania
The table below shows the current price to compare -- the standard rate available from your utility company -- and the price range of options available through Choose Energy, which is owned by the same parent company as CNET.
All rates displayed are accurate as of Feb. 7, 2024, for the ZIP codes listed with each utility. CNET staff regularly update these rates but they may have changed since the last update. For the most current rate information in your area, enter your ZIP code at choosenergy.com. These rates only represent the supply charges, not the utility's delivery charges or any taxes.
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Deregulation in Pennsylvania: What does that mean?
"In Pennsylvania, deregulation means that you have a right to pick the provider of your electricity down to the source," said James Freihaut, director of the US Department of Energy's Mid-Atlantic Combined Heat and Power Technical Assistance Partnership at Penn State University. "You have a wide variety of selections in terms of the types of electricity generation that you want, using the local utility transmission distribution system as the provider and as the biller."
Pennsylvania utility vs. electric supplier
Pennsylvania is primarily serviced by two large utilities, which own a variety of subsidiary brands:
Exelon, composed of BGE, ComEd, PECO, Atlantic City Electric, Delmarva Power and Pepco, is the utility for the eastern side of the state including Philadelphia.
FirstEnergy -- whose umbrella includes Ohio Edison, Illuminating Company, Toledo Edison, Met-Ed, Penelec, Penn Power, West Penn Power, JCP&L, Mon Power and Potomac Edison -- serves the middle and west side of the state.
While Pennsylvanians are locked into what utility serves their area, they have the freedom to choose energy suppliers because of deregulation.
What types of electricity plans are offered in Pennsylvania?
You've got choices, including the option not to choose anything. Here's what you can do:
Stick with your utility
If you don't want to shop for an electric supplier, you'll be defaulted into your utility's generation plan or standard offer.
How do you find the best electricity rates in Pennsylvania?
Freihaut's advice is simple, but time-consuming: "You have to read."
The PUC's website allows you to sort electric suppliers by rate and pricing structure, allowing you to choose cheaper electricity. But be careful of any plans that charge monthly fees or fees for lower or higher usage.
Typically, finding a supplier with fixed pricing is easiest -- you're paying the same price for every kilowatt-hour of electricity no matter what time of day. If you're a more savvy energy user, you can try a variable price plan, which fluctuates based on how many people are pulling from the grid. Electricity will be more expensive during the day and when people come home from work, for example, than during the nighttime. Unlimited plans, in which you pay a set price per month no matter how much energy you use, are also available.
What should you look for when choosing an electricity plan in Pennsylvania?
Be wary of monthly fees or other hidden changes for lower or high usage, as they can make what seems like a good deal expensive in the long run. Be careful of the length of your contract, because suppliers tend to boost prices when it expires if you don't negotiate.
"I had a two-year contract and I forgot what month the contract was up," Freihaut said. "I went over the period and, automatically, I started paying five cents more per kilowatt-hour."
How to make the switch in Pennsylvania
Switching is an easy process. With your utility bill in hand, shop for suppliers on the PUC's website, choose a plan you like, sign up with the supplier and it'll notify your utility of the change. Your new pricing should be reflected within a billing cycle or two.
Who has the cheapest electricity rates in Pennsylvania?
There's no single supplier that offers the cheapest electricity rates in Pennsylvania. It'll depend on where you live, which utility serves your area and which suppliers are available. Enter your ZIP code on the Pennsylvania Public Utility Commission website then sort by price to find the cheapest rate. Just be sure to look out for fees.
What is the best energy plan in Pennsylvania?
The best energy plan in Pennsylvania will be the one you are most comfortable with, whether that's the one offered by your utility or a supplier you find on the market. Make sure you understand the rate and pricing structure -- fixed, variable or unlimited -- watch out for fees and elect whether you want renewable energy.