Winter’s coming, time to check energy contracts

The temperatures are falling, winter is coming; time to think about the cost of home heating.

“Dennis, I can tell you I hope I never hear the words ‘polar vortex’ again,” chuckled Pamela Witmer, a commissioner on the Public Utility Commission.

It may be funny now, but it certainly wasn’t last winter when variable-rate customers got electric bills that doubled, tripled, even quadrupled.

The PUC got more than 9,000 complaints statewide from people who felt ripped off and cheated by their electricity suppliers.

To avoid the fright of opening that envelope, experts say check the terms and conditions of your contract now. Is it expiring soon? Is there a cancellation fee? What is the cost per kilowatt?

It’s also advisable to shop now. Visit Pagasswitch.com for natural gas and Papowerswitch.com for electricity and compare prices.

It’s shocking, but only 37 percent of Pennsylvanians bother to shop their rates.

“Do I wish more people would participate in the competitive market? Absolutely,” Witmer said. “I know there are better options out there for folks rather than staying with their utility, at least from a price perspective.”

Customers who don’t shop are kicked into an automatic default rate that changes quarterly. PPL’s and West Penn Power’s default rates are going up on December 1. PECO’s rate is increasing substantially and MetEd’s will dip slightly.

State Representative Robert Godshall (R-Montgomery) wants to put a cap on how much a variable rate can jump from one month to the next at 30 percent. That bill didn’t pass in the legislative session that just ended, but he promises to push it again next year.

He also warns average homeowners about variable rates and says stick with fixed.

“There’s no question that it’s too dangerous (variable rates) and you can get hammered,” Godshall said.

Suppliers should be hammered, Godshall insists, by federal and state investigators who are still investigating last year’s price spikes. Godshall calls it gouging.

“Those companies and/or brokers took advantage and decided to charge what they wanted to charge. A lot of it was unethical but they did it,” he said.

And there are things homeowners can do to reduce prices, Witmer reminds. Weather stripping, improved insulation and programmable thermostats can help. And customers can lower the bill by lowering the temperature

“Turn down the thermostat,” Witmer said, “even just three degrees, to 68 degrees, and you’ll save three percent on your energy bill.”

The energy marketplace is substantially different heading into this winter than it was last year because of fallout over the polar vortex.

Two PUC instituted changes could make a difference. One requires electricity suppliers to more clearly word their contracts so terms and conditions are in plain English and more easily understood.

The second reform takes effect December 15. It requires utilities to allow customers to switch from one supplier to another within three business days. Currently, it can take a 30-45 days for customers to get out of what they believe is a bad deal.

It’s called a free market, but that’s not accurate because it’s not free. Open is more accurate. In an open market, customers must be vigilant and engaged. If not, they might be paying much more than they should for a commodity they absolutely need.

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