Power buyers warned

July 29, 1998|By DON AINES

CHAMBERSBURG, Pa. - In choosing a company to supply electricity to a home or business, Dr. Dennis E. Buffington advises: Buyer beware.

Because of deregulation of electricity generation, most Pennsylvanians may now choose from whom they wish to buy their power. The sales pitches, however, may be as confusing as those for long-distance companies, according to Buffington, a professor of agricultural and biological engineering at Penn State University.

Tuesday night he explained deregulation to about 75 people at the Penn State Cooperative Extension Office.

Buffington said early efforts at deregulation in states such as New Hampshire, "produced some nightmares."

He said one company offered free bird feeders to new customers and many signed up without regard to how much they were paying per kilowatt hour.

"I'm not recommending anyone sign a contract for longer than 12 months," Buffington said.

Deregulation was signed into law in December 1996. It introduces competition to the industry by allowing generators to sell electricity to individual customers.


For every kilowatt a generator sells, it must supply the same amount to the power grid serving the customer. In Franklin County, Pa., electricity will still go through Allegheny Power or GPU's transmission and distribution system and the existing utilities will provide customer service.

Before switching, Buffington said customers have to do some research:

HEIGHT="6" ALT="* " NATURALSIZEFLAG="0" ALIGN="BOTTOM"> Determine electricity use and when you use the most. Some generators may offer widely different rates for peak and off-peak hours.

HEIGHT="6" ALT="* " NATURALSIZEFLAG="0" ALIGN="BOTTOM"> Is there a minimum monthly charge? Some companies may offer low rates, but require a minimum payment that erases any savings.

HEIGHT="6" ALT="* " NATURALSIZEFLAG="0" ALIGN="BOTTOM"> How many bills will a customer receive? As with some long-distance phone services, a customer may get a bill from the generator and another from the utility providing transmission and customer service.

HEIGHT="6" ALT="* " NATURALSIZEFLAG="0" ALIGN="BOTTOM"> Find out if their are any penalties for breaking or terminating a contract.

Buffington said Pennsylvania's electricity rates are 15 percent higher than the national average and deregulation should bring rates down. Pennsylvanians pay about $10 billion a year and competition means savings of $1.5 billion or more in the future.

Most consumers received an enrollment card by mail in late June and have until Aug. 14 to return them. Customers who did not receive the cards can call their utility and get one, he said.

Those who do not enroll in the program will remain with their current provider. Customers will be able to choose their providers between Sept. 1 and Nov. 1.

Service from new suppliers will begin for most customers in January 1999.

Buffington said Chambersburg, which has its own electric system, is one of 35 municipalities in the state that has chosen not to participate in the program.

"Will we have people calling us all the time like the telephone companies?" one person asked about the power generators.

"I'm afraid so ... Enjoy your dinners while you can," Buffington said.

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