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October 14, 2009

As PPL rate hikes near, others confirm discounts

Dominion Retail, OnDemand Energy Solutions: Lower residential rates coming.

With PPL Electric Utilities announcing a roughly 30-percent increase when rate caps expire on Jan. 1, two companies have confirmed they’ll be offering lower rates for residential customers.

PPL has spent the past three years buying energy to supply its customers for 2010, when deregulation goes into effect in its territory. At that point, customers will be able to shop for energy suppliers, but won’t see any change in service because it will still be administered by PPL. “The electrons will likely come from the same place,” said Dan Donovan, a spokesman for Dominion of Richmond, Va.

Dominion Retail is offering rates at 10 percent less than whatever PPL’s price per kilowatt-hour ends up being. “We’re pretty sure it’s going to be about 10.5 cents,” said Donovan. “Whatever it is, we’ll be 10 percent less. … If anything, we’d round it down.”

The offer is a one-year contract for the first 5,000 customers who sign up, but Donovan expected the company will secure enough power for all PPL residential customers. “We would anticipate we would offer 10 percent to all 4 million customers, but we don’t anticipate all of them will take it,” he said. “We don’t expect 1 million.”

OnDemand Energy Solutions, which is already offering an aggregation pool for businesses who are members of chambers of commerce in the PPL territory, plans to offer a similar program for employees of those companies.

The company made a presentation at the Chamber of Commerce of Greater Wilkes-Barre earlier this year. “Everyone in our pool to date is going to do phenomenal,” said John Bodine, the vice president for business development. “Virtually everybody should be switching right now.”

The company, which groups smaller customers and markets their combined demand directly to suppliers, expects to beat PPL’s price for businesses by an average of 2 cents per kilowatt-hour, Bodine said.

He hoped that the residential program would see equal savings. “I would say, where the wholesale market is and where the final (PPL) residential rate is, if we can do something similar (to what’s offered to businesses) we should be well above a 10-percent discount,” he said. “I’m really hoping that we can still have something in November.”

The company is currently negotiating with suppliers to structure the process, but expects a “huge” customer demand. “What takes a little longer is there are less suppliers interested,” Bodine said, plus there are more rules about switching customers, “so it’s a little bit more cumbersome. … It’s a matter of time; we will have a residential program.”

Donovan of Dominion said the company started with residential instead of business customers because “we have a different niche than everybody else. … We’re pretty experienced in that we already about a million customers in either gas or electric.”

Dominion can beat PPL’s prices, he said, because PPL is “recovering some historical caps, and we are able to sell at current prices. Current prices have gone down.”

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