PHILADELPHIA (July 15, 2009) – The results of the first of a series of four competitive electricity purchases are now available as PECO begins securing the electricity to serve customers beginning Jan. 1, 2011.  The purchases, accounting for about 21 percent of the electricity needed for PECO’s residential customers, resulted in a price of 10.1 cents per kilowatt hour (kWh), indicating a 9 percent energy price increase for an average residential customer beginning in 2011.

Because energy prices fluctuate, PECO is buying the electricity needed in 2011 four different times – reducing the risk to customers of purchasing electricity all at one time when market prices could be high.  The results of all four purchases will determine the price PECO’s residential customers will pay for electricity beginning Jan. 1, 2011.  Because of market fluctuation, and other customer and environmental programs, PECO is helping customers prepare for what could be an overall increase of 10 – 15 percent.

“I am pleased with the level of competitive participation in these first purchases, and even more pleased that we were able to secure competitive prices for our customers,” said Denis O’Brien, PECO president and CEO.  “PECO customers have benefited from stable rates since the early 1990s.  This process really shows how the competitive market forces are working, and will help us smoothly transition to market-based rates.”
 
In total, 11 electric generation suppliers participated in the competitive bidding process.  Two suppliers were selected for these first purchases.  The purchases were facilitated by NERA Economic Consulting, an independent procurement consultant, and the results were further reviewed and approved by the Pennsylvania Public Utility Commission (PUC). 

Three additional purchases are planned for PECO’s residential, small and mid-sized commercial customers; and two purchases for PECO’s large commercial customers.  PECO’s purchases will include both daily short-term and long-term fixed price contracts, as well as some hourly-priced (spot-market) purchases.

The electricity that PECO buys will be available to customers who do not choose to purchase their electricity from a retail energy supplier.  PECO will continue to ensure the safe, reliable delivery of electricity to all customers, regardless of whether or not they purchase electricity from another supplier.

The purchases are part of PECO’s comprehensive strategy to help customers manage the transition to market-based rates and address the needs of customers in 2011 and beyond.  The efforts include PECO’s Early Phase-In program, which gives customers the option of paying a little more each month beginning July 2009.  Those payments, plus 6 percent interest paid by PECO, will be applied to customer accounts beginning in January 2011 to help offset any price increase. 

Other efforts include PECO’s recent filing with the PUC for $342 million in programs to help customers reduce and manage their energy use and costs.  The proposed programs – including Compact Fluorescent Lights (CFL) discounts, appliance pick-up, new “time of use” rate options, dramatically increased low-income programs, and many other incentives – are part of PECO’s ongoing efforts to help customers manage the transition to market-based rates on Jan. 1, 2011.  When approved, the programs will help customers use energy more efficiently and potentially offset any price increases beginning in 2011.  Overall, the programs will help customers reduce energy use by more than 1.2 billion kilowatt-hours by 2013 – this is the equivalent of eliminating the energy consumed by more than 120,000 homes.

For more information visit www.peco.com/KNOW.