The Exuberant Accountant - Scott Heintzelman

Here is a great summary article about steps you should be considering by my good friend Peter R. Wilson, Esq. of Reager and Adler, PC.

Historically, electric distribution companies (EDC) such as PPL have controlled the generation, transmission and distribution of electricity. The transmission and distribution process will not change. With the transition to a competitive market that will include new suppliers, businesses can choose who supplies the energy commodity and, in doing so, force energy companies to lower their prices in order to compete. The Pennsylvania Public Utility Commission (PUC) also will ensure that regardless of your choice in electric supplier, businesses and individuals will receive the same level of reliability of electric service.

While competition doesn't officially begin until January 1, businesses and individuals should start doing their research now by evaluating potential suppliers (also known as electric generation suppliers (EGS)). That will enable them to secure energy quotes from suppliers at their current rates, which are at their lowest cost in years, for use in January.  A full list of licensed EGS is available on the PUC website. Over the next few months, expect to see a broad marketing campaign in the media as the new EGS return to the Pennsylvania market.

The bottom line, according to the PUC's Chairman James Cawley, is that you will pay more for electricity if you stay with your current EDC as your supplier after January 1^st.  All of us will have to look to the EGS to buy electricity at a lower cost.  Staying with your EDC as your supplier will subject you to paying the highest possible rates.

Statewide energy-buying consortiums are becoming an additional option for businesses. Many local Chambers are taking a lead in this area.

Last year PPL began a program where customers could pay additional money up-front which earned interest to offset the increases for next year.  Recently the PUC approved a program where customers can defer payment of the increases, and pay back that amount -- plus interest -- over time.

Under Act 129, which was signed into law last year by Governor Rendell, beginning in 2011 utilities will be required to cut usage by 1%.  By 2013, they will be expected to cut usage by 3%. In order to accomplish these government mandates, the utilities will be reaching out to consumers and businesses to provide methods to decrease consumption.  One method will be to continue to provide incentives to undergo energy audits as a way to understand how you can reduce your energy consumption.  To that end, there are numerous tax incentives available at the federal level and the state level, particularly with Pennsylvania's Alternative Energy Investment Fund, for individuals and businesses who wish to upgrade their homes, buildings, and energy systems.

There are many other changes that will take place in future years, as individuals and businesses are incentivized to reduce consumption, shift their energy usage to off-peak hours, and maintain their homes and buildings as green properties.

This critical issue affects everyone at a time when we are faced with mounting costs of living and doing business.  If you would like more information about how to better prepare for these changes, please feel free to contact me or Peter Wilson.