Penelec to Raise Residential Rates by 16 Percent

Penelec customers will notice a larger bill this coming year.

Beginning on January 1, Penelec will raise residential rates by 16.6% and commercial rates by 12.9%.

The significant rate increase is due to rate caps expiring at the end of this year.

While other companies in the area have taken steps to circumvent the rate increase by drawing power straight from the grid, not everyone has been so fortunate.

According to WICU of Erie,

Many companies in our region have taken steps to avoid the sharp rate hikes. The Manufacturers and Business Association formed an energy alliance to bypass Penelec to keep costs down. Employers’ Energy Alliance President David Bell said, “We purchase directly from the grid. Then we move it to our customers. Our markup is only one tenth of  a cent per kilowatt hour.” The alliance says the plan is already providing savings to companies in central Pennsyvlania where rate caps were lifted a year ago. Bell said, “Those savings averaged 20-24% compared to the utility rate.” Bell says the best guess is savings in the Penelec area will be 12-14%. The Erie Regional Chamber is also offering it’s members savings, using a company to buy the cheapest power possible from suppliers. Claudia Thornburg of the Erie Regional Chamber said, “We have about 125 members signed up right now and we estimate it will be $1.5 million that will be saved in 2011 by those folks collectively.” The chamber hopes at some point to expand the program to homeowners, probably employees of members. But for now that option does not exist.