Competition Encourages Utilities to Help Consumers

Yesterday, Met-ed and Penelec filed their own pre-payment plan with the PUC. The proposal is similar to PPL's recently launched effort to mitigate the expected jump in electricity prices when rate caps expire.

"Each month, customers who sign up for the plan would pre-pay an amount equal to about 9.6 percent of their electric bill. Pre-payments would earn 7.5 percent interest [PPL customers earn 6%] and be used to reduce their electric bills in 2011 and 2012."

See the table below:

Met-Ed and Penelec News Release - Upload a Document to Scribd

Efforts like these show that the competitive market is working. Utilities not only have an incentive to help consumers deal with expensive electricity, but to "outdo" competitors with more attractive mitigation plans. There is no need for the legislature to mandate their own phase-in plans which will require more subsidies in the form of stranded costs.