Variable-rate electricity contracts in Pennsylvania can cost customers plenty

A $634.12 electric bill in February about five times higher than normal soured Forrest Lehman and his wife, Megan, on electric choice.

The bill was the result of a variable rate plan that spiked when severe cold weather caused a volatile swing in wholesale electric prices. For the next month, the Lehmans turned off lights and didn't use the stove or the dryer.

As cold weather makes a return, the Lehmans don't have to worry. They have rid themselves of their variable rate plan and their competitive power company. Their decision means there will be no surprises when wholesale prices fluctuate because they are getting power from a traditional utility whose rates are set by regulators.

We simply don't trust those outside groups anymore, Forrest Lehman said. It may be a little bit more than the other guys, but they can't just jack up your rates a ridiculous amount.

The Lehmans are among 53,559 Pennsylvania electric consumers who have ditched competitive power suppliers since last winter's surprise surge in bills that spurred a flood of consumer complaints to the state attorney general and utility regulators.

The trend is a marked turnaround from 2013, when 123,359 residential customers left their default utilities, according to the state Public Utility Commission, with many of them likely lured by the promise of cheaper rates.

To be fair, many people are still happy with their competitive supplier and are not bolting back to their traditional utility. The PUC says 1.83 million residential customers, 38 percent of the market, received their power from a competitive supplier at the end of October.

Officials are encouraging those and others who are considering a switch from a default utility to pay careful attention to their contracts heading into the winter season to make sure that their rates aren't variable or, at least, are fixed for the winter when prices are likely to be volatile.

It's just a dangerous, dangerous situation for a residential customer to go into a variable rate, said state Rep. Bob Godshall, R-Montgomery, who sponsored legislation to cap price increases in variable rates after consumers complained last winter. The measure didn't come up for a vote, and Godshall said he will reintroduce it in the next session.

Some people who were blindsided by costly bills last winter were unaware that their rates were variable. Some had signed up for a fixed-rate plan that expired after a period and became variable. The Lehmans, who live in Williamsport, were among them. They said they didn't notice their fixed plan changed to a variable rate.

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Variable-rate electricity contracts in Pennsylvania can cost customers plenty