July 8, 2021
Director, Retail Policy
An important part of American life is our right to make choices, especially with what we purchase. Most consumers can choose from a variety of Internet, telephone or cable service providers, for example, but when it comes to energy, not everyone enjoys the same freedoms. Only 28% of Americans have energy choice, while 74% want the option to select their energy provider.
Pennsylvania is steeped in a rich history as the original state of independence, where our founding fathers met to fight for and defend our freedoms, so it only makes sense that our commonwealth serves as the centerpiece for celebrations heralding the Fourth of July and marking Energy Independence Day on July 10.
Pennsylvanians are luckier than most. Our commonwealth is one of only 13 states, plus Washington, D.C., to allow consumers to choose how they heat and cool their home or power their businesses. This power to choose is significantly different from traditional utility service, where energy consumers have no choice but to purchase from a monopoly utility service provider offering few or no options in terms of energy management tools, renewable energy and efficiency, and pricing.
But even in Pennsylvania, where competition is only partially implemented, regulated monopoly utilities remain firmly in charge of the customer relationship. Customers who do not choose an electric supplier are automatically assigned to the utility at the current default service rate. According to the most recent data from the state Public Utility Commission, only 27% of residential electricity consumers exercise their freedom to shop for their electricity supply. That’s too bad.
Pennsylvania consumers have had the option of choosing their electric service provider for the last 25 years. Before competition, average Pennsylvania electric rates were 15% above the national average. Now they are about 7% below that average. Clearly, competition works, and the potential for growth is enormous if more residents realized the opportunities --- and savings --- available to them.
One way to do that is by implementing more innovative billing policies, including supplier consolidated billing, where customers pay the retail supplier for electricity rather than the monopoly utility that transmits the energy product to their house. It’s a better approach and it works. Vistra has performed this billing function for more than 15 years and sends over 2 million bills per month across its brands in several states.
Energy Independence Day is about the fight to free consumers from the traditional monopoly utility service so they can choose an energy program they want, not one that someone else wants them to have.