PPL Electric Utilities customers will see a 4 percent drop in their rates starting Friday.
The Allentown-based utility announced a drop in its generation charge for default electricity service.
The rate PPL charges its customers who are not buying power from a competitive supplier will drop from 7.544 cents per kilowatt-hour to 7.237 cents for residential customers, a rate effective for three months. Customers in a home that uses about 1,000 kilowatt-hours per month would save about $3 monthly.
For small business customers, however, the new price to compare will increase to 10.814 cents per kilowatt-hour, up from 10.206 cents per kilowatt-hour.
PPL's price to compare is updated on March 1, June 1, Sept. 1 and Dec. 1 each year.
"Lower natural gas prices are the primary driver of declined rates," said PPL spokesman Bryan Hay.
PPL default rate sets the price-to-compare for many competitive suppliers and offers customers a basis from which to shop for electricity. A review of competitive suppliers offering power in the PPL service area may be found at www.papower switch.com, which is a website maintained by the state Public Utility Commission.
On Wednesday, the site showed 18 power providers offering customers a rate lower than the new PPL rate. Seven providers listed are under 7 cents per kilowatt-hour, the lowest being Great American Power, offering a variable rate at 6.25 cents. The lowest fixed rate offered is from FirstEnergy Solutions at 6.69 cents, good through March 2014. More than 40 competitive suppliers offer service in the PPL area.
Despite the availability lower rates from other suppliers, the majority of the PPL customers continue to buy power from the utility. More than 619,000 PPL customers, or 43 percent of all its customers, purchase power from suppliers.
While it's less than the majority, acting state consumer advocate Tanya J. McCloskey said the outcome of competitive markets in Pennsylvania is among the best in the nation. She said shopping for electricity takes time and with the price-to-compare changing four times a year, some people don't want to gamble.
"Someone has to have an interest and be presented with an offer that meets their needs," she said.
The generation rate makes up about 60 percent of the typical residential monthly bill. The rest of the bill includes PPL's distribution and customer charges.
Contact the writer: dfalchek@timesshamrock.com