End State? Large Pennsylvania Utility LOSING Residential Shopping Customers

The electric distribution company in Pennsylvania that has the highest percent of switched residential accounts (among the 7 large EDCs) is now seeing a loss of residential customers on competitive supply.

Specifically, Duquesne Light, with 44% of residential accounts switched, saw a decline in the number of residential customers on competitive supply from February 24 to March 2, according to the March 6 stats from the Pennsylvania PUC.

It's believed to be the first time Duquesne Light has seen a decline in residential shopping on a weekly basis since the PUC started publishing weekly migration reports in the spring of 2011.

It also follows a similar pattern in the state where EDCs reaching a saturation point of 30-40% of residential accounts switched start seeing a backslide in residential shopping. PPL encountered weekly declines in residential shopping once crossing the 40% barrier, while PECO and Penn Power (where shopping has been active a much longer time due to an earlier end of rate caps) have seen weekly declines in residential shopping at the 30% threshold.

Of course, the backslide in residential migration at Duquesne Light should be even more troubling given that default service customers at the utility are paying an obscenely above-market rate for electric supply. The Duquesne Light residential Price to Compare is 9.89¢/kWh -- the highest residential rate in the state, despite the relative lack of constraints compared to utilities in the east.

That's 38 percent higher than the lowest fixed offer from a retail supplier on PA Power Switch.

Yet competitive suppliers are losing customers at Duquesne Light. Something is broken, and it's not going to be fixed by quarterly auctions (if the legislature even approves them).

Outside of Duquesne Light, the state saw another historic low in the aggregate growth of residential shopping from about February 28 to about March 6 (reporting date varies slightly by utility). The state, in aggregate, saw growth in residential shopping of only 2,300 accounts, below even the prior historic low of 3,000 accounts recorded a few weeks ago.

Pennsylvania was a market seeing growth of 6,000 migrated customers per week in much of January, and aggregate growth levels of 7,000-10,000 migrated customers per week in November and October of last year.

Moreover, the growth from about February 28 to about March 6 was lower at every single utility versus that utility's prior-week growth.

Matters has previously examined the slowdown in migration in light of the PUC's minimal changes to the retail market structure as contained in its end-state retail market order (see prior story)

Specifically, the weekly net growth (loss) in residential shoppers at each utility from about February 28 to about March 6 was as follows:

Duquesne Light          (9)
Met-Ed                 809
PECO                   262
Penelec                426
Penn Power             102
PPL                    228
West Penn Power        453

As noted above, this week's growth represents a decline versus the prior-week growth at every single utility.

Link to PUC's 3/6/13 Weekly Migration Report

Matters has also developed a comparison of the migration levels from the 2/27/13 Report to the 3/6/13 Report.

Link to Matters' Comparison of Weekly Migration