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Pennsylvania Electricity Rate Caps Set to Expire on 12/31/10

Higher Electric Rates are Coming to Pennsylvania...But You Do Have Ways to Save!

PA Homeowners and PECO Customers…Expect to See a Jump in Electric Bills in 2011 and Beyond!

Horizon Services Can Help Residents Get Around the Rate Increases (See Below!)

FOR IMMEDIATE RELEASE

(EXTON, PA ; November 8, 2010) — Brace yourself, Pennsylvania residents. You may be in for quite a shock when you receive your first electric bill in 2011.

Starting January 1, 2011, generation rate caps for all electric companies regulated by the Pennsylvania Public Utility Commission (PUC) will no longer be in effect. Rate caps for 7 of the 11 electric companies regulated by the PUC expired years ago. Rate caps on the remaining four, which includes PECO Energy — the primary electric company serving Southeastern Pennsylvania –will expire on December 31, 2010.

What does this mean for Pennsylvania homeowners? The PUC expects that almost all electricity customers will see an increase in their bills over the next few years after rate caps expire. For some Pennsylvania residents, those rate hikes may be as high as 10-20 percent (based on previous Pennsylvania rate cap expirations).  In the Delaware Valley region (Philadelphia, Montgomery County, Delaware County, Chester County), PECO Energy estimates that, starting in January 2011, electric rates will go up about 5 percent for the typical residential customer (about $5/month). The longer-term outlook for electric rates depends on market prices and competition.

What Are Rate Caps?

To understand electricity rate caps, you must first understand what makes up your electric bill.  About two-thirds of your monthly bill represents the cost of generating the electricity; this price was determined by your electric company’s electric generation supplier and passed along by the electric company directly to customers. The other 1/3 represents the electric company’s cost to deliver electricity to you. Prices for both portions of your electric bill are reviewed and approved by the PUC.

For the last 10 years, Pennsylvania has been transitioning to a deregulated marketplace. Rate caps were put into place in the late 1990s to ease the transition to competitive electricity generation supply markets under Pennsylvania’s Electricity Generation and Customer Choice Act of 1996.

Since 1996, electricity prices have been capped, or set, regardless of what was occurring in the electricity marketplace. With deregulation, the generation portion of your electricity service will now be open to competition, meaning that these prices will change periodically as market prices change. While competition usually drives prices down, this has not always been the case with public utilities. Nationwide and in those Pennsylvania markets where deregulation has already occurred, some residential customers have seen their electric bills increase as much as 70%! Also, keep in mind that utility companies have seen their operation costs increase significantly over the last few years. Factor in the rising costs of coal and fuel and increased global unpredictability and you can see how it is almost inevitable that electric rates will rise in the future and continue to rise in the coming years.

Your New Options for Electricity

Before deregulation, you were at at the mercy of your electric company and had to pay them whatever it charged for the generation portion of your bill. But now you don’t have to. The Pennsylvania PUC has created The Electric Choice Program, giving every Pennsylvania electric customer the ability to have direct access to and purchase power from independent electric generation supply companies while still having their electricity physically delivered by their electric company. This means that Pennsylvania consumers can now compare among different electricity generation companies and choose the one that offers the best rate.

In the coming months, Pennsylvania consumers will be barraged by offers from dozens of electric generation suppliers. Homeowners are encouraged to comparison shop, because prices can differ significantly from company to company.

To help Pennsylvanians take part in “Electric Choice” and choose a competitive electric generation supplier, the Pennsylvania PUC has set up a website called PA PowerSwitch. Here, Pennsylvania consumers can make an informed choice by comparing electric generation suppliers, looking at different rate options and calculating how much money they can save.

What Else Can Pennsylvanians Do to Combat Rising Electricity Costs?

The easiest thing that Pennsylvania residents can do to offset and manage increases in electric rates is to simply use less electricity. Some very simple things simple things consumers can do include:

• Lowering your thermostat in the winter; raise it in summer.
• Switching to CFL bulbs.
• Watching TV in the dark.
• Purchasing Energy Star-rated appliances

Horizon Services believes that one of the most effective things Pennsylvanians can do to reduce their electricity consumption is to upgrade their aging home HVAC (Heating Ventilation and Air Conditioning) systems. Today’s state-of-the-art, energy-efficient heating and cooling systems are sound investments that use significantly less energy than the furnaces and air conditioners of just a decade ago. And they perform better, longer. Older HVAC systems tend to use more energy with each passing year and are more prone to breakdowns.

Proper maintenance of your HVAC equipment can also keep electric bills low. Regular cleaning or replacement of furnace and air conditioner filters reduce the workload on heating and cooling systems, lowering your energy usage. And giving your furnace or air conditioner a tune-up at the start of each heating or cooling season is the best way to assure efficient operation all season long.

If you rely on electricity as your sole heating source, you may want to explore converting to gas, oil, propane or some other heating source. PECO Energy offers a variety of rebates and incentives to encourage heating customers to switch to these “greener”, less expensive fuels. As well, Horizon Services sells and installs a wide variety of energy-efficient, non-electric heating solutions — from furnaces to boilers — that can help you nip your electric bill in the bud.

Useful Links:

• PA Public Utility Commission Consumer Education
• PA Public Utility Commission Electric Choice Program
• PA PowerSwitch
• PECO Answers
• PECO Energy Choice
• The Compete Coalition

Related Information from Horizon Services…

• Horizon Heating & Air Conditioning Installation and Replacement
• Horizon’s Pre-Season Furnace Precision Tune-Up Offer
• PECO Offers PA Residents Incentives to Get Gas!
• New PECO Rebate Program Means Big Energy Savings for PA Customers
• 101 Ways to Save Energy and Money in Your Home
• Cutting Edge Solutions For Energy Efficiency
• SEER, AFUE and HSPF Ratings Explained
• Frugal Fridge Maintenance Can Save You Energy…and Cold Hard Cash!
• Do The Math…High Efficiency Air Conditioners Drastically Reduce Energy Costs!
• A Precision Tune-Up is Your Air Conditioner’s Best Friend!

About Horizon Services, Inc.:

Horizon Services is the Delaware Valley’s leading plumbing, heating, air conditioning, drain cleaning and sewer & water line replacement services company, providing repair, maintenance, sales and installation to homeowners and businesses in Delaware (New Castle County, Kent County), Pennsylvania (Delaware County, Chester County, Montgomery County, The Main Line) and Maryland (Cecil County). Horizon Services is headquartered in Wilmington, DE with additional offices in Exton, PA. Website: http://www.horizonservicesinc.com.

Media Contact:
Frank Iacono
(302) 221.3511

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