For Pa. Poultry Producers, Electricity ‘Day of Reckoning’ Is Coming

Charlene M. Shupp
Espenshade
Special Sections Editor

LANCASTER, Pa. — In the coming new year, farmers and customers supplied by PP&L will be the next group to enter into the world of electricity deregulation. Dennis Buffington, Penn State agriculture engineering professor, discussed how it will impact poultry producers at Tuesday’s Poultry Health Seminar at the Lancaster County Farm and Home Center.

Buffington also noted that farmers in the Allegheny Power, Met-Ed, Penelec and PECO regions will be deregulated at the end of 2010.

“What it means is when the rate caps expire, for the first time you will get to select your electricity generation provider,” he said.

A farm’s current electric utility company will still be responsible for the distribution and transmission of the electricity. The utility will continue as the “wire company” maintaining the infrastructure and addressing service issues. The change will be in the contracting of the company who will generate the power for the farm.

“Hopefully, the supplier will be able to give it to you cheaper,” he said.

Producers will not have to move suppliers and can remain with their current utility.

Projections estimate PP&L customers will see about 30 percent increase in their costs. Buffington said they are close to finalizing their rates. Customers with utilities that will deregulate at the end of 2010 will see little change, as a result of the lower energy prices this year.

There will also be other changes besides the generation of power. The use peak and off peak rates will be discontinued. Demand charges will become less significant for most customers.

One glitch will be for farmers who have residential rates with three-phase power. PP&L has stated that customers who want three-phase power will need to move to a commercial rate, G-3. Buffington said customers need to talk with their PP&L representative. He noted that some farmers have been told they will be permitted to remain on residential.

Customers who opt out of shopping for a suppler will not see any changes.

And for those who opt to contract with a new supplier, PP&L will become the default supplier as a backup if the supplier can not fulfill the contract.

Before shopping suppliers, Buffington said farmers should do their homework, calculate electricity usage, evaluate on-site generation capabilities and maintain a good record of paying bills.

A list of suppliers is available through the Pennsylvania Public Utility Commission (PUC). Buffington did note that if farmers are unsure of what to do, they should remain with their current utility until they can make an informed decision.

Buffington said, “Your objective should be on increasing profitability and net cash flow by optimizing the use of electricity and other energy sources. The greenest energy is the energy that is not used because of an effective energy management program.”

Editor’s note: For more information, visit energy.cas.psu.edu.
Charlene Shupp Espenshade can be reached at cshupp.eph@lnpnews.com.