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All About Energy

Why is PECO Moving Mid-Sized Customers to Hourly Pricing?

Eli Sachs May 3, 2016 7:01:00 AM
Eli Sachs
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PECO_Logo.jpgPECO recently issued formal notices to medium sized commercial customers on default service announcing that it will switch mid-sized commercial customers in the 100-500 kW demand range on to a variable rate starting with their June 2016 bill.  Customers in the Class 3 rate class that have not switched to competitive supply may notice some drastic changes to their bill, especially as the summer months near and market rates begin to spike.



PECO's decision to move this customer class off of their Medium Commercial and Industrial (C&I) fixed price to a market-based pricing structure greatly increases their exposure to volatile market prices. Previously, the Medium C&I price was changed on a quarterly basis similar to the small commercial customer class. PECO has sent formal notices to customers informing them of upcoming changes and encouraging customers to actively shop for their electricity rates.


In the notice, PECO cited that, “hourly prices can fluctuate significantly based on several factors, including weather, time of day, season and wholesale power prices.” This change will be reflected in the June 2016 PECO bill and it really couldn't come at a worse time - the summer.  As the weather starts to heat up, the prices will begin to climb as demand on the grid increases.




Let's think about the Polar Vortex from the winter of 2013-2014.  The relentless cold resulted in greater than expected demand on the grid.  Customers on a fixed price were protected, but those on a variable market-rate paid upwards of 30 cents per kWh for the most volatile periods, practically tripling their usual monthly electric bill as prices spiked up to $2,000/MWh for some intervals.




While we do not expect as extreme weather conditions that we experienced during the Polar Vortex of '14, we do expect summer demand to be high and price volatility to react accordingly.




95% of the large commercial and industrial sector customers have already switched to competitive supply.  Why?  The largest customers have already switched because right now is a great time to buy while prices are at historically low levels. 


The best way to mitigate this risk of highly variable pricing is through shopping around competitively for a fixed rate. You can also be sure to save money by comparing the rates you receive from competitive suppliers to the price to compare, the rate published on the front page of the PECO bill under the ”Message Center”.



According to PECO “if you are not currently purchasing the electricity your business uses from a competitive electric generation supplier, and prefer the certainty of a fixed prices, you may want to purchase electricity from a competitive electric generation supplier through an fixed price contract before May 2016".


PECO is actively encouraging customers to seek a fixed price contract and the penalty for not switching away could cost your business dearly.  If you're ready to lock in your savings, we're ready to get you low fixed rates.


Avoid high


  Avoid high energy bills with a low fixed-rate.

Topics: Variable Rate, PECO