Residential rates will rise modestly
Allegheny Power completes auctions for electricity supply GREENSBURG – Allegheny Power, the electricity delivery unit of Allegheny Energy Inc., has announced that the Pennsylvania Public Utility Commission approved the results of the utility’s sixth auction to purchase power for its Pennsylvania customers for 2011 and beyond.
Allegheny Power has now completed the auction purchases needed to serve its customers next year after generation rate caps expire on Dec. 31.
The auction purchases account for 80 percent of supply needed for residential customers next year and approximately 90 percent of small and mid-sized non-residential customers’ needs.
Additional spot market purchases will be made throughout 2011 to complement the fixed-priced auction purchases.
Assuming the spot market purchases are consistent with current market pricing, a typical Pennsylvania residential customer’s monthly bill next year would increase $3.16, or 3.4 percent over 2010 levels, assuming usage of 1,000 kilowatt-hours (kWh) per month. For small and mid-sized non-residential customers, rates in 2011 will decrease 3.2 percent and 3.9 percent, respectively.
“Residential customers should only see a modest increase in their bills next year when long-standing generation rate caps expire,” said Paul J. Evanson, chairman, president and chief executive officer of Allegheny Energy.
“Our auction results, along with our Watt Watchers conservation programs, will help ensure a smooth transition to market-based rates,” Evanson added.
Allegheny Power awarded 20 contracts in this auction, representing approximately 7.4 million megawatt-hours (MWh) of generation supply. The new contracts include the purchase of 5.2 million MWhs for large non-residential customers (service type 40) who have not selected a competitive supplier and have requested a one-year fixed price.
The results of the auction were:
For residential customers:
n One 17-month contract.
n One 29-month contract.
n Average weighted retail generation price: $55.01/MWh.
For small and mid-sized non-residential customers:
n Three 17-month contracts.
n One 29-month contract.
n Average weighted retail generation price: $59.14/MWh.
For large non-residential customers:
n 14 twelve-month contracts.
n Average weighted retail generation price: $65.66/MWh.
Included in the average weighted retail generation pricing are energy, capacity, Pennsylvania gross receipts taxes, line losses, renewable energy requirements, ancillary services and other provisions.
The contracts awarded will go into effect beginning Jan. 1, 2011.
The winning suppliers were selected from among seven competitive bidders. An independent monitoring firm, Boston Pacific Company Inc., oversaw the process for Allegheny Power.
Two more auctions are scheduled in 2012.
The multiple auctions are designed to shield customers against overexposure to market conditions at any single point in time.
“Now that customers have a clear picture of next year’s market-based rates, they can more easily consider choices available to manage their bills and use energy wisely,” an Allegheny Energy spokesman said.
“Customers may take advantage of Pennsylvania’s electric choice program and consider offers from competitive suppliers. Allegheny Power’s average price-to-compare for residential customers next year is 7.008¢/kWh.,” the spokesman added
More information about choosing a competitive electric generation supplier is available on the Customer Choice page online at www.alleghenypower.com.
In addition, Allegheny Power’s Watt Watchers program offers incentives, rebate programs and other information.
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For more information about programs and tips for using energy more efficiently, go online to the Watt Watchers section of the company’s website at www.alleghenypower.com.