Wisconsin Power and Light dealt wind farm setback

By The Capital Times


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Alliant Energy still plans to build a large wind farm in Fond du Lac County even though it is "disappointed" by a Public Service Commission of Wisconsin ruling regarding its financing.

Wisconsin Power & Light Co., Alliant's state utility unit, had applied for a permanent 12.9 percent rate of return for the Cedar Ridge Wind Farm under Act 7, a 2005 state law that provides for setting permanent rates of return for individual utility projects such as power plants and wind farms.

The law is designed to provide a degree of certainty to a utility, investors, and ratepayers on the recovery of a facility's costs.

The PSC issued a preliminary, oral decision setting the rate of return for Cedar Ridge at 10.5 percent for its 20-year life.

"We are disappointed in the terms of the PSCW's decision and we believe that the decision is contrary to the intention of Wisconsin Act 7 to encourage investment in new generation, including renewable energy," William D. Harvey, Alliant chairman, president and CEO, said in a statement. "WP&L will review the final order and communicate whether or not it intends to make the investment in accordance with the terms and conditions of the PSCW's Act 7 decision."

Alliant also can choose to let the project fall under its overall rate of return, which is set annually by the PSC. Alliant's 2007 rate of return is 11.2 percent.

The choice is "kind of like the difference between a fixed-rate mortgage and an ARM (adjustable rate mortgage)," Alliant spokeswoman Erin Dammen said.

Dammen said Alliant would make its decision after the PSC issues its final, written order on the rate of return for Cedar Ridge under the Act 7 application.

Not moving forward with the project is "an absolute last resort if we could not justify going forward with the project from a financial perspective," Dammen said. "Right now we are only considering the options that would allow us to continue with the project, either by financing through Act 7 or through traditional rate base."

Alliant also is waiting for the PSC decision on its application to construct the 60- to 99-megawatt wind farm.

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Should California Fund Biofuels or Electric Vehicles?

California Biofuels vs EV Subsidies examines tradeoffs in decarbonization, greenhouse gas reductions, clean energy deployment, charging infrastructure, energy security, lifecycle emissions, and transportation sector policy to meet climate goals and accelerate sustainable mobility.

 

Key Points

Policy tradeoffs weighing biofuels and EVs to cut GHGs, boost energy security, and advance clean transportation.

✅ Near-term blending cuts emissions from existing fleets

✅ EVs scale with a cleaner grid and charging buildout

✅ Lifecycle impacts and costs guide optimal subsidy mix

 

California is at the forefront of the transition to a greener economy, driven by its ambitious goals to reduce greenhouse gas emissions and combat climate change. As part of its strategy, the state is grappling with the question of whether it should subsidize out-of-state biofuels or in-state electric vehicles (EVs) to meet these goals. Both options come with their own sets of benefits and challenges, and the decision carries significant implications for the state’s environmental, economic, and energy landscapes.

The Case for Biofuels

Biofuels have long been promoted as a cleaner alternative to traditional fossil fuels like gasoline and diesel. They are made from organic materials such as agricultural crops, algae, and waste, which means they can potentially reduce carbon emissions in comparison to petroleum-based fuels. In the context of California, biofuels—particularly ethanol and biodiesel—are viewed as a way to decarbonize the transportation sector, which is one of the state’s largest sources of greenhouse gas emissions.

Subsidizing out-of-state biofuels can help California reduce its reliance on imported oil while promoting the development of biofuel industries in other states. This approach may have immediate benefits, as biofuels are widely available and can be blended with conventional fuels to lower carbon emissions right away. It also allows the state to diversify its energy sources, improving energy security by reducing dependency on oil imports.

Moreover, biofuels can be produced in many regions across the United States, including rural areas. By subsidizing out-of-state biofuels, California could foster economic development in these regions, creating jobs and stimulating agricultural innovation. This approach could also support farmers who grow the feedstock for biofuel production, boosting the agricultural economy in the U.S.

However, there are drawbacks. The environmental benefits of biofuels are often debated. Critics argue that the production of biofuels—particularly those made from food crops like corn—can contribute to deforestation, water pollution, and increased food prices. Additionally, biofuels are not a silver bullet in the fight against climate change, as their production and combustion still release greenhouse gases. When considering whether to subsidize biofuels, California must also account for the full lifecycle emissions associated with their production and use.

The Case for Electric Vehicles

In contrast to biofuels, electric vehicles (EVs) offer a more direct pathway to reducing emissions from transportation. EVs are powered by electricity, and when coupled with renewable energy sources like solar or wind power, they can provide a nearly zero-emission solution for personal and commercial transportation. California has already invested heavily in EV infrastructure, including expanding its network of charging stations and exploring how EVs can support grid stability through vehicle-to-grid approaches, and offering incentives for consumers to purchase EVs.

Subsidizing in-state EVs could stimulate job creation and innovation within California's thriving clean-tech industry, with other states such as New Mexico projecting substantial economic gains from transportation electrification, and the state has already become a hub for electric vehicle manufacturers, including Tesla, Rivian, and several battery manufacturers. Supporting the EV industry could further strengthen California’s position as a global leader in green technology, attracting investment and fostering growth in related sectors such as battery manufacturing, renewable energy, and smart grid technology.

Additionally, the environmental benefits of EVs are substantial. As the electric grid becomes cleaner with an increasing share of renewable energy, EVs will become even greener, with lower lifecycle emissions than biofuels. By prioritizing EVs, California could further reduce its carbon footprint while also achieving its long-term climate goals, including reaching carbon neutrality by 2045.

However, there are challenges. EV adoption in California remains a significant undertaking, requiring major investments in infrastructure as they challenge state power grids in the near term, technology, and consumer incentives. The cost of EVs, although decreasing, still remains a barrier for many consumers. Additionally, there are concerns about the environmental impact of lithium mining, which is essential for EV batteries. While renewable energy is expanding, California’s grid is still reliant on fossil fuels to some degree, and in other jurisdictions such as Canada's 2019 electricity mix fossil generation remains significant, meaning that the full emissions benefit of EVs is not realized until the grid is entirely powered by clean energy.

A Balancing Act

The debate between subsidizing out-of-state biofuels and in-state electric vehicles is ultimately a question of how best to allocate California’s resources to meet its climate and economic goals. Biofuels may offer a quicker fix for reducing emissions from existing vehicles, but their long-term benefits are more limited compared to the transformative potential of electric vehicles, even as some analysts warn of policy pitfalls that could complicate the transition.

However, biofuels still have a role to play in decarbonizing hard-to-abate sectors like aviation and heavy-duty transportation, where electrification may not be as feasible in the near future. Thus, a mixed strategy that includes both subsidies for EVs and biofuels may be the most effective approach.

Ultimately, California’s decision will likely depend on a combination of factors, including technological advancements, 2021 electricity lessons, and the pace of renewable energy deployment, and the state’s ability to balance short-term needs with long-term environmental goals. The road ahead is not easy, but California's leadership in clean energy will be crucial in shaping the nation’s response to climate change.

 

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Ireland and France will connect their electricity grids - here's how

Celtic Interconnector, a subsea electricity link between Ireland and France, connects EU grids via a high-voltage submarine cable, boosting security of supply, renewable integration, and cross-border trade with 700 MW capacity by 2026.

 

Key Points

A 700 MW subsea link between Ireland and France, boosting security, enabling trade, and supporting renewables.

✅ Approx. 600 km subsea cable from East Cork to Brittany

✅ 700 MW capacity; powers about 450,000 homes

✅ Financed by EIB, banks, CEF; Siemens Energy and Nexans

 

France and Ireland signed contracts on Friday to advance the Celtic Interconnector, a subsea electricity link to allow the exchange of electricity between the two EU countries. It will be the first interconnector between continental Europe and Ireland, as similar UK interconnector plans move forward in parallel. 

Representatives for Ireland’s electricity grid operator EirGrid and France’s grid operator RTE signed financial and technical agreements for the high-voltage submarine cable, mirroring developments like Maine’s approved transmission line in North America for cross-border power. The countries’ respective energy ministers witnessed the signing.

European commissioner for energy Kadri Simson said:

In the current energy market situation, marked by electricity price volatility, and the need to move away from imports of Russian fossil fuels, European energy infrastructure has become more important than ever.

The Celtic Interconnector is of paramount importance as it will end Ireland’s isolation from the Union’s power system, with parallels to Cyprus joining the electricity highway in the region, and ensure a reliable high-capacity link improving the security of electricity supply and supporting the development of renewables in both Ireland and France.

EirGrid and RTE signed €800 million ($827 million) worth of financing agreements with Barclays, BNP Paribas, Danske Bank, and the European Investment Bank, similar to the Lake Erie Connector investment that blends public and private capital.

In 2019, the project was awarded a Connecting Europe Facility (CEF) grant worth €530.7 million to support construction works and align with a broader push for electrification in Europe under climate strategies. The CEF program also provided €8.3 million for the Celtic Interconnector’s feasibility study and initial design and pre-consultation.

Siemens Energy will build converter stations in both countries, and Paris-based global cable company Nexans will design and install a 575-km-long cable for the project.

The cable will run between East Cork, on Ireland’s southern coast, and northwestern France’s Brittany coast and will connect into substations at Knockraha in Ireland and La Martyre in France.

The Celtic Interconnector, which is expected to be operational by 2026, will be approximately 600 km (373 miles) long and have a capacity of 700 MW, similar to cross-border initiatives such as Quebec-to-New York power exports expected in 2025, which is enough to power 450,000 households.

 

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Tesla CEO Elon Musk slams Texas energy agency as unreliable: "not earning that R"

ERCOT Texas Power Grid Crisis disrupts millions amid a winter storm, with rolling blackouts, power outages, and energy demand; Elon Musk criticizes ERCOT as Tesla owners use Camp Mode while wind turbines face icing

 

Key Points

A Texas blackout during a winter storm, exposing ERCOT failures, rolling blackouts, and urgent grid resilience measures.

✅ Millions without power amid record cold and energy demand

✅ Elon Musk criticizes ERCOT over grid reliability failures

✅ Tesla Camp Mode aids warmth during extended outages

 

Tesla CEO Elon Musk on Wednesday slammed the Texas agency responsible for a statewide blackout amid a U.S. grid with frequent outages that has left millions of people to fend for themselves in a freezing cold winter storm.

Musk tweeted that Texas’ power grid manager, the Electricity Reliability Council of Texas (ERCOT), is not earning the “R” in the acronym, highlighting broader grid vulnerabilities that critics have noted.

Musk moved to Texas from California in December and is building a new Tesla factory in Austin. His critique of the state’s electrical grid operator came after multiple Tesla owners in the state said they had slept in their vehicles to keep warm amid the lingering power outage.

In 2019, Tesla released a vehicle with a “Camp Mode,” which enables owners to use the vehicle’s features – like lights and climate control – without significantly depleting the battery.

“We had the power go out for 6 hours last night. Our house does not have gas, and we ran out of firewood... what are we going to do,” one Reddit user wrote on “r/TeslaMotors.”

“So my wife my dog and my newborn daughter slept in the garage in our Model3 all nice and cozy. If I didn't have this car, it would have been a very rough night.”

More than two dozen people have died in the extreme weather this week, some while struggling to find warmth inside their homes. In the Houston area, one family succumbed to carbon monoxide from car exhaust in their garage. Another perished as they used a fireplace to keep warm.

Utilities from Minnesota to Texas and Mississippi have implemented rolling blackouts to ease the burden on power grids straining to meet extreme demand for heat and electricity, as longer, more frequent outages hit systems nationwide.

More than 3 million customers remained without power in Texas, Louisiana and Mississippi, more than 200,000 more in four Appalachian states, and nearly that many in the Pacific Northwest, according to poweroutage.us, which tracks utility outage reports, and advocates warn that millions could face summer shut-offs without protections.

ERCOT said early Wednesday that electricity had been restored to 600,000 homes and businesses by Tuesday night, though nearly 3 million homes and businesses remained without power, as California turns to batteries to help balance demand. Officials did not know when power would be restored.

ERCOT President Bill Magness said he hoped many customers would see at least partial service restored soon but could not say definitively when that would be.

Magness has defended ERCOT’s decision, saying it prevented an “even more catastrophic than the terrible events we've seen this week."

Utility crews raced Wednesday to restore power to nearly 3.4 million customers around the U.S. who were still without electricity in the aftermath of a deadly winter storm, even as officials urge residents to prepare for summer blackouts that could tax systems further, and another blast of ice and snow threatened to sow more chaos.

The latest storm front was expected to bring more hardship to states that are unaccustomed to such frigid weather — parts of Texas, Arkansas and the Lower Mississippi Valley — before moving into the Northeast on Thursday.

"There's really no letup to some of the misery people are feeling across that area," said Bob Oravec, lead forecaster with the National Weather Service, referring to Texas.

Sweden, known for its brutally cold climate, has offered some advice to Texans unaccustomed to such freezing temperatures, as Canadian grids are increasingly exposed to harsh weather that strains reliability. Stefan Skarp of the Swedish power company told Bloomberg on Tuesday: “The problem with sub-zero temperatures and humid air is that ice will form on the wind turbines.”

“When ice freezes on to the wings, the aerodynamic changes for the worse so that wings catch less and less wind until they don't catch any wind at all,” he said.

 

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Warning: Manitoba Hydro can't service new 'energy intensive' customers

Manitoba Hydro capacity constraints challenge clean energy growth as industrial demand, hydrogen projects, EV batteries, and electrification strain the grid; limited surplus, renewables, storage, and transmission bottlenecks hinder new high-load connections.

 

Key Points

Limited surplus power blocks new energy-intensive loads until added generation and transmission expand Manitoba's grid.

✅ No firm commitments for new energy-intensive industrial customers

✅ Single large load could consume remaining surplus capacity

✅ New renewables need transmission; gas, nuclear face trade-offs

 

Manitoba Hydro lacks the capacity to provide electricity to any new "energy intensive" industrial customers, the Crown corporation warns in a confidential briefing note that undercuts the idea this province can lure large businesses with an ample supply of clean, green energy, as the need for new power generation looms for the utility.

On July 28, provincial economic development officials unveiled an "energy roadmap" that said Manitoba Hydro must double or triple its generating capacity, as electrical demand could double over the next two decades in order to meet industrial and consumer demand for electricity produced without burning fossil fuels.

Those officials said 18 potential new customers with high energy needs were looking at setting up operations in Manitoba — and warned the province must be careful to choose businesses that provide the greatest economic benefit as well as the lowest environmental impact.

In a briefing note dated Sept. 13, obtained by CBC News, Manitoba Hydro warns it doesn't have enough excess power to hook up any of these new heavy electricity-using customers to the provincial power grid.

There are actually 57 proposals to use large volumes of electricity, Hydro says in the note, including eight projects already in the detailed study phase and nine where the proponents are working on construction agreements.

"Manitoba Hydro is unable to offer firm commitments to prospective customers that may align with Manitoba's energy roadmap and/or provincial economic development objectives," Hydro warns in the note, explaining it is legally obliged to serve all existing customers who need more electricity.

"As such, Manitoba Hydro cannot reserve electric supply for particular projects."

Hydro says in the note its "near-term surplus electricity supply" is so limited amid a Western Canada drought that "a single energy-intensive connection may consume all remaining electrical capacity."

Adding more electrical generating capacity won't be easy, even with new turbine investments underway, and will not happen in time to meet demands from customers looking to set up shop in the province, Hydro warns.

The Crown corporation goes on to say it's grappling with numerous requests from existing and prospective energy-intensive customers, mainly for producing hydrogen, manufacturing electric vehicle batteries and switching from fossil fuels to electricity, such as to use electricity for heat in buildings.

In a statement, Hydro said it wants to ensure Manitobans know the corporation is not running out of power — just the ability to meet the needs of large new customers, and continues to provide clean energy to neighboring provinces today.

"The size of loads looking to come to Manitoba are significantly larger than we typically see, and until additional supply is available, that limits our ability to connect them," Hydro spokesperson Bruce Owen said in a statement.

Adding wind power or battery storage, for example, would require the construction of more transmission lines, and deals such as SaskPower's purchase depend on that interprovincial infrastructure as well.

Natural gas plants are relatively inexpensive to build but do not align with efforts to reduce carbon emissions. Nuclear power plants require at least a decade of lead time to build, and tend to generate local opposition.

Hydro has also ruled out building another hydroelectric dam on the Nelson River, where the Conawapa project was put on hold in 2014.

 

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Why electric buses haven't taken over the world—yet

Electric Buses reduce urban emissions and noise, but require charging infrastructure, grid upgrades, and depot redesigns; they offer lower operating costs and simpler maintenance, with range limits influencing routes, schedules, and on-route fast charging.

 

Key Points

Battery-electric buses cut emissions and noise while lowering operating and maintenance costs for transit agencies.

✅ Lower emissions, noise; improved rider experience

✅ Requires charging, grid upgrades, depot redesigns

✅ Range limits affect routes; on-route fast charging helps

 

In lots of ways, the electric bus feels like a technology whose time has come. Transportation is responsible for about a quarter of global emissions, and those emissions are growing faster than in any other sector. While buses are just a small slice of the worldwide vehicle fleet, they have an outsize effect on the environment. That’s partly because they’re so dirty—one Bogotá bus fleet made up just 5 percent of the city’s total vehicles, but a quarter of its CO2, 40 percent of nitrogen oxide, and more than half of all its particulate matter vehicle emissions. And because buses operate exactly where the people are concentrated, we feel the effects that much more acutely.

Enter the electric bus. Depending on the “cleanliness” of the electric grid into which they’re plugged, e-buses are much better for the environment. They’re also just straight up nicer to be around: less vibration, less noise, zero exhaust. Plus, in the long term, e-buses have lower operating costs, and related efforts like US school bus electrification are gathering pace too.

So it makes sense that global e-bus sales increased by 32 percent last year, according to a report from Bloomberg New Energy Finance, as the age of electric cars accelerates across markets worldwide. “You look across the electrification of cars, trucks—it’s buses that are leading this revolution,” says David Warren, the director of sustainable transportation at bus manufacturer New Flyer.

Today, about 17 percent of the world’s buses are electric—425,000 in total. But 99 percent of them are in China, where a national mandate promotes all sorts of electric vehicles. In North America, a few cities have bought a few electric buses, or at least run limited pilots, to test the concept out, and early deployments like Edmonton's first e-bus offer useful lessons as systems ramp up. California has even mandated that by 2029 all buses purchased by its mass transit agencies be zero-emission.

But given all the benefits of e-buses, why aren’t there more? And why aren’t they everywhere?

“We want to be responsive, we want to be innovative, we want to pilot new technologies and we’re committed to doing so as an agency,” says Becky Collins, the manager of corporate initiative at the Southeastern Pennsylvania Transportation Authority, which is currently on its second e-bus pilot program. “But if the diesel bus was a first-generation car phone, we’re verging on smartphone territory right now. It’s not as simple as just flipping a switch.”

One reason is trepidation about the actual electric vehicle. Some of the major bus manufacturers are still getting over their skis, production-wise. During early tests in places like Belo Horizonte, Brazil, e-buses had trouble getting over steep hills with full passenger loads. Albuquerque, New Mexico, canceled a 15-bus deal with the Chinese manufacturer BYD after finding equipment problems during testing. (The city also sued). Today’s buses get around 225 miles per charge, depending on topography and weather conditions, which means they have to re-up about once a day on a shorter route in a dense city. That’s an issue in a lot of places.

If you want to buy an electric bus, you need to buy into an entire electric bus system. The vehicle is just the start.

The number one thing people seem to forget about electric buses is that they need to get charged, and emerging projects such as a bus depot charging hub illustrate how infrastructure can scale. “We talk to many different organizations that get so fixated on the vehicles,” says Camron Gorguinpour, the global senior manager for the electric vehicles at the World Resources Institute, a research organization, which last month released twin reports on electric bus adoption. “The actual charging stations get lost in the mix.”

But charging stations are expensive—about $50,000 for your standard depot-based one. On-route charging stations, an appealing option for longer bus routes, can be two or three times that. And that’s not even counting construction costs. Or the cost of new land: In densely packed urban centers, movements inside bus depots can be tightly orchestrated to accommodate parking and fueling. New electric bus infrastructure means rethinking limited space, and operators can look to Toronto's TTC e-bus fleet for practical lessons on depot design. And it’s a particular pain when agencies are transitioning between diesel and electric buses. “The big issue is just maintaining two sets of fueling infrastructure,” says Hanjiro Ambrose, a doctoral student at UC Davis who studies transportation technology and policy.

“We talk to many different organizations that get so fixated on the vehicles. The actual charging stations get lost in the mix as the American EV boom gathers pace across sectors.”

Then agencies also have to get the actual electricity to their charging stations. This involves lengthy conversations with utilities about grid upgrades, rethinking how systems are wired, occasionally building new substations, and, sometimes, cutting deals on electric output, since electric truck fleets will also strain power systems in parallel. Because an entirely electrified bus fleet? It’s a lot to charge. Warren, the New Flyer executive, estimates it could take 150 megawatt-hours of electricity to keep a 300-bus depot charged up throughout the day. Your typical American household, by contrast, consumes 7 percent of that—per year. “That’s a lot of work by the utility company,” says Warren.

For cities outside of China—many of them still testing out electric buses and figuring out how they fit into their larger fleets—learning about what it takes to run one is part of the process. This, of course, takes money. It also takes time. Optimists say e-buses are more of a question of when than if. Bloomberg New Energy Finance projects that just under 60 percent of all fleet buses will be electric by 2040, compared to under 40 percent of commercial vans and 30 percent of passenger vehicles.

Which means, of course, that the work has just started. “With new technology, it always feels great when it shows up,” says Ambrose. “You really hope that first mile is beautiful, because the shine will come off. That’s always true.”

 

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Pennsylvania residents could see electricity prices rise as much as 50 percent this winter

Pennsylvania Electric Rate Increases hit Peco, PPL, and Pike County, driven by natural gas costs and wholesale power markets; default rate changes, price to compare shifts, and time-of-use plans affect residential bills.

 

Key Points

Electric default rates are rising across Pennsylvania as natural gas costs climb, affecting Peco, PPL, and Pike customers.

✅ PPL, Peco, and Pike raising default rates Dec. 1

✅ Natural gas costs driving wholesale power prices

✅ Consider standard offer, TOU rates, and efficiency

 

Energy costs for electric customers are going up by as much as 50% across Pennsylvania next week, the latest manifestation of US electricity price increases impacting gasoline, heating oil, propane, and natural gas.

Eight Pennsylvania electric utilities are set to increase their energy prices on Dec. 1, reflecting the higher cost to produce electricity. Peco Energy, which serves Philadelphia and its suburbs, will boost its energy charge by 6.4% on Dec. 1, from 6.6 cents per kilowatt hour to about 7 cents per kWh. Energy charges account for about half of a residential bill.

PPL Electric Utilities, the Allentown company that serves a large swath of Pennsylvania including parts of Bucks, Montgomery, and Chester Counties, will impose a 26% increase on residential energy costs on Dec. 1, from about 7.5 cents per kWh to 9.5 cents per kWh. That’s an increase of $40 a month for an electric heating customer who uses 2,000 kWh a month.

Pike County Light & Power, which serves about 4,800 customers in Northeast Pennsylvania, will increase energy charges by 50%, according to the Pennsylvania Public Utility Commission.

“All electric distribution companies face the same market forces as PPL Electric Utilities,” PPL said in a statement. Each Pennsylvania utility follows a different PUC-regulated plan for procuring energy from power generators, and those forces can include rising nuclear power costs in some regions, which explains why some customers are absorbing the hit sooner rather than later, it said.

There are ways customers can mitigate the impact. Utilities offer a host of programs and grants to support low-income customers, and some states are exploring income-based fixed charges to address affordability, and they encourage anyone struggling to pay their bills to call the utility for help. Customers can also control their costs by conserving energy. It may be time to put on a sweater and weatherize the house.

Peco recently introduced time-of-use rates — as seen when Ontario ended fixed pricing — that include steep discounts for customers who can shift electric usage to late night hours — that’s you, electric vehicle owners.

There’s also a clever opportunity available for many Pennsylvania customers called the “standard offer” that might save you some real money, but you need to act before the new charges take effect on Dec. 1 to lock in the best rates.

Why are the price hikes happening?
But first, how did we get here?

Energy charges are rising for a simple reason: Fuel prices for power generators are increasing, and that’s driven mostly by natural gas. It’s pushing up electricity prices in wholesale power markets and has lifted typical residential bills in recent years.

“It’s all market forces right now,” said Nils Hagen-Frederiksen, PUC spokesperson. Energy charges are strictly a pass-through cost for utilities. Utilities aren’t allowed to mark them up.

The increase in utility energy charges does not affect customers who buy their energy from competitive power suppliers in deregulated electricity markets. About 27% of Pennsylvania’s 5.9 million electric customers who shop for electricity from third-party suppliers either pay fixed rates, whose price remains stable, or are on a variable-rate plan tied to market prices. The variable-rate electric bills have probably already increased to reflect the higher cost of generating power.

Most New Jersey electric customers are shielded for now from rising energy costs. New Jersey sets annual energy prices for customers who don’t shop for power. Those rates go into effect on June 1 and stay in place for 12 months. The current energy market fluctuations will be reflected in new rates that take effect next summer, said Lauren Ugorji, a spokesperson for Public Service Electric & Gas Co., New Jersey’s largest utility.

For each utility, its own plan
Pennsylvania has a different system for setting utility energy charges, which are also known as the “default rate,” because that’s the price a customer gets by default if they don’t shop for power. The default rate is also the same thing as the “price to compare,” a term the PUC has adopted so consumers can make an apples-to-apples comparison between a utility’s energy charge and the price offered by a competitive supplier.

Each of the state’s 11 PUC-regulated electric utilities prepares its own “default service plan,” that governs the method by which they procure power on wholesale markets. Electric distribution companies like Peco are required to buy the lowest priced power. They typically buy power in blind auctions conducted by independent agents, so that there’s no favoritism for affiliated power generators

Some utilities adjust charges quarterly, and others do it semi-annually. “This means that each [utility’s] resulting price to compare will vary as the market changes, some taking longer to reflect price changes, both up and down,” PPL said in a statement. PPL conducted its semi-annual auction in October, when energy prices were rising sharply.

Most utilities buy power from suppliers under contracts of varying durations, both long-term and short-term. The contracts are staggered so market price fluctuations are smoothed out. One utility, Pike County Power & Light, buys all its power on the spot market, which explains why its energy charge will surge by 50% on Dec. 1. Pike County’s energy charge will also be quicker to decline when wholesale prices subside, as they are expected to next year.

Peco adjusts its energy charge quarterly, but it conducts power auctions semi-annually. It buys about 40% of its power in one-year contracts, and 60% in two-year contracts, and does not buy any power on spot markets, said Richard G. Webster Jr., Peco’s vice president of regulatory policy and strategy.

“At any given time, we’re replacing about a third of our supplied portfolio,” he said.

The utility’s energy charge affects only part of the monthly bill. For a Peco residential electric customer who uses 700 kWh per month, the Dec. 1 energy charge increase will boost monthly bills by $2.94 per month, or 2.9%. For an electric heating customer who uses about 2,000 kWh per month, the change will boost bills $8.40 a month, or about 3.5%, said Greg Smore, a Peco spokesperson.
 

 

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