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Competition electric in Pa.

February 22, 1999|By DON AINES

CHAMBERSBURG, Pa. - Most area residents, local governments and businesses are eligible to switch to alternative suppliers under Pennsylvania's law deregulating the electricity industry.

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Consumers can now shop around for electricity, but Waynesboro, Pa., decided to stay with Allegheny Power Company, according to Borough Manager Lloyd Hamberger. The borough has about 60 municipal accounts with the company, he said.

"We had a devil of a time finding anyone that would compete with Allegheny. ... They appear to be the low-cost provider," Hamberger said last week.

About half the municipal accounts in Greencastle, Pa., were eligible to be switched in last year's pilot program, according to Borough Manager Ken Myers. Some were switched to QST Energy in Pittsburgh, Pa., but Myers said the borough also buys electricity from a power-generating subsidiary of Allegheny Power.

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Unlike most municipalities, Chambersburg owns its electricity distribution system, buying power and reselling it to residential and commercial customers, who are ineligible to participate in the program. It still buys electricity from Allegheny Power, Borough Secretary Tonya Mickey said.

Grove Worldwide in Shady Grove, Pa., looked at other options, but stayed with Allegheny Power, said spokesman Robert Kannel. Another of the area's major industries made a different choice.

JLG Industries in McConnellsburg, Pa., went with another supplier, according to Larry Hartman, the company's director of Facilities and Regulatory Services. He declined to name the new supplier, but said his company looked at cost, reliability, service and other factors.

Connie Haulman lives in Guilford Township and participated in last year's pilot program. She switched to a lower-cost supplier then, but that company has since dropped out of the market.

"We're back with Allegheny Power. ... Most of the ones we contacted didn't service the area or were higher priced," she said.

About 2 million of the state's 5.4 million electric customers have enrolled in Pennsylvania's Electricity Choice program, according to Public Utility Commission spokesman Kevin Cadden.

In a PUC survey, about 725,000 customers said they stayed with their current power company while 450,000 switched to new suppliers after Jan. 1. The balance of the 2 million did not indicate what choice they made, Cadden said.

Allegheny Power spokesman Scott Shields said about 243,000 of the company's 667,000 customers in Pennsylvania enrolled in the program. Allegheny Power serves Franklin, Fulton and 22 other counties in the state.

Shields said the number enrolled does not indicate how many customers switched. He said utilities do not have to begin reporting those numbers to the PUC until July.

Beginning last July, about two-thirds of the state's consumers became eligible to enroll, Cadden said. The other third will be eligible to switch next January.

Deregulation allows consumers to choose which company generates their power, although it is still delivered through their current utility's transmission and distribution systems.

Utilities had to file restructuring plans with the PUC before deregulation, according to Cadden. Shields said part of that agreement dropped Allegheny's generation rates, among the lowest in the state, by 2.5 percent and fixed them through 2008.

Shields said the company's distribution and transmission rates are capped through 2005 under the agreement.

Last fall, Dr. Dennis E. Buffington, a professor of agricultural and biological engineering at Penn State University said Pennsylvanians paid about 15 percent more for electricity than the national average.

Cadden said competition will drive costs down and make the state more attractive to businesses. He said deregulation has contributed to $1.5 billion in new industrial development in the state.

"The shadowy unseen hand of Adam Smith is very evident," he said regarding the 18th century Scottish free market economist.

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