Good news/bad news for dairy farmers

There’s some good news and some bad news concerning PPL’s deregulation of electricity generation.

Let’s start with the bad news. PPL has released information on the projected rates for electricity for 2010. The projected rates indicate an approximate 30% increase in prices for electricity compared to 2009. I must emphasize that the projected prices for 2010 are estimated; the actual prices for 2010 may be somewhat different. The exact price structure for PPL electricity for 2010 should be known within a month or so. I will provide a table showing the prices of electricity for residential, GS-1 and GS-3 tariffs for various combinations of kWh consumption and kW demand in the next issue of Dairy Digest. At that time, the rates should be exact rather than projected.

The good news is that you may be able to identify an alternate supplier of electricity who will provide your electricity needs at a lower price than PPL. Regardless of which electricity supplier you select, you will still be obligated to PPL for the distribution of the electricity from the grid to your farm.

The deregulation of electricity means that you will have the opportunity to shop for an electricity supplier that will be responsible for the generation and transmission of the amount of the electricity you need. PPL (your Electric Distribution Company or EDC) will be responsible for the distribution of all the purchased electricity used on your farm.

How can you find out what the alternate suppliers are offering? Ask them. A list of licensed suppliers in the territory of each investor-owned utility company is available at PA Public Utility Commission Web site: www.puc.state.pa.us/utilitychoice/listofsupp.aspx?ut=ec. Suppliers are listed at the web site in the two categories of residential and commercial/industrial. There are frequent changes to this list of suppliers, so check this Web site often.

If you do not select an alternate supplier by January 1, 2010, then PPL will continue - by default – to be your supplier of electricity. As your default supplier, PPL will be responsible for the generation and transmission of electricity in addition to the distribution responsibility. But then remember that you will need to pay approximately 30% more for your electricity than you are paying now.

Do not rush into making a decision about an alternate supplier! There is no problem if you need more time and wait several months so that you can make a more informed decision to select a supplier.

Let’s say that you wait until March 31, 2010. Then PPL would be responsible for your generation and transmission for the first three months of 2010 and your selected supplier would be responsible after that date for the length of the contract period that is decided.

After the contract period has ended, you will have the opportunity to renew with the same supplier, select another supplier, or select PPL. Throughout this entire period, PPL is your “Wires Company”, meaning that PPL is responsible for the distribution of your electricity.

This article is geared exclusively for PPL customers because the deregulation of electricity generation for PPL customers occurs one year before the deregulation for customers of Allegheny Power, MetEd, Penelec, and PECO. It is anticipated that the same basic rules of deregulation will apply to all customers throughout the state.

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Dennis Buffington, Department of Agricultural and Biological Engineering