Why are Electricity Rates Increasing? Has Competition Failed?

In the past few weeks ConEdison, MX Energy, and now Dominion Energy are raising their rates (this only affects those who haven’t switched). Far from failure, the recent increase is proof that competition is working. How? A Dominion spokesperson explains:

“. . the sudden price hike stemmed from an unforeseen surge of orders that arrived in the mail Wednesday. The surprising rush used up all the remaining electricity Dominion had purchased at that lower price. And with wholesale prices rising, the only electricity now available to Dominion is the costlier electricity.”

Basically more Pennsylvanians are shopping than energy companies expected- they underestimated the demand and may now loose potential customers to other providers. Despite the increase every PPL customers will still save money if they switch.

In the meantime we’ve updated our Citizen’s Electricity Guide for those who are still shopping and for a more in depth discussion about the electricity deregulation and how it benefits consumers check out our latest CF podcast.

Update: Dominon Energy has decided not to raise residental rates after all. Instead of a 5% discount the company will return to offering PPL residents a 10% discount or 9.40 cents a KWH through February.