Competition to replace PPL service ramping up

With the expiration of electricity rate caps in the PPL territory looming, competition for residential customers is heating up.

Direct Energy of Pittsburgh announced Monday that it will be offering three different options for residential service.

It joins Dominion Retail, based in Richmond, Va., and New York-based Gateway Energy Services in the residential market, which is expected to see 30-percent rate increases from PPL Electric Utilities when caps expire on Jan. 1.

Pittsburgh-based 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.

PPL Electric has about 102,000 total customers in Luzerne County, 8,200 in Wyoming County and 97,000 in Lackawanna County.

Direct Energy already serves Pike County, as well as business customers throughout the state. In Pike County the local utility’s rates rose upwards of 80 percent when caps expired in 2006.

However, Direct Energy isn’t entering UGI Utilities territory yet because its “unique circumstances” make doing so “quite a challenge from our perspective,” according to company spokesperson Yvette Hamilton.

“Direct Energy’s been eagerly waiting on an opportunity to compete at the residential level in Pennsylvania,” said Phil Tonge, president of Direct Energy’s residential business, in a news release.

Direct offers three options, each of which includes a $100-per-year early-cancellation fee:

• One-year contracts for about 9 cents per kilowatt-hour for the first three months, followed by about 9.5 cents for the rest of the year.

• One-year alternative-energy contracts for about 10 cents per kilowatt-hour for the first three months and about 11.5 cents for the remainder. While not directly alternative energy, the contract will cover Direct Energy’s costs to buy renewable-energy credits to match the customer’s consumption.

• Three-year contracts for 10 cents per kilowatt-hour.

While Gateway hasn’t offered price options yet, Dominion announced rates at 10 percent less than whatever PPL’s price per kilowatt-hour ends up being. Dominion expects that to be about 10.5 cents per kilowatt-hour.

In April, Direct Energy committed to spending $2.5 million over five years on energy-conservation, alternative-energy, urban-reclamation and community programs.

To enroll by Jan. 1, customers must contact Direct Energy before Dec. 18, Hamilton said. After that, the switch will take between 16 and 45 days, depending on the customer’s billing cycle, she said.

For information or to enroll, call 1-888-734-0741.