Explanation of the new billing details for residential customers:

                             PECO Energy Electric Service Area – Tariff Changes Effective 01/01/2011     

Background Information: As a result of Pennsylvania’s 1997 electric utility restructuring law, PECO no longer produces electricity. Electric power generation is sold in a separate, competitive wholesale market. As part of the restructuring, PECO’s customers have benefited from capped electric generation rates since 1996. Since then wholesale market power prices have risen, driven by increased fuel costs and global competition. The electric generation rate caps expired for PECO customers on 01/01/2011 which means as of that date PECO began buying power on the wholesale market. On 10/08/08, Governor Rendell and the Pennsylvania General Assembly passed legislation that enhanced Pennsylvania’s energy independence and enabled programs to help consumers manage their energy use. House Bill 2200 addresses the way in which utilities can purchase power, demand-side management and energy efficiency programs – including smart meters.

What is Deregulation?For the electric industry, deregulation means the generation portion of electricity service is now open to competition. For the last decade electricity prices have been capped (or regulated) in this market. During that time, prices remained set (or regulated), regardless of what prices were doing in the marketplace. Deregulation has transformed PECO from a company that makes electricity and delivers it to its customers, to a company that now purchases electricity and delivers it to their customers. (Source www.pecoanswers.com)

Breaking down your bill: In general, your bill is broken into two main parts:

1) The electricity used by customers, otherwise called the Generation portion. This charge is passed along directly to customers at the price that PECO pays. These prices change regularly, as market prices change.

2) The delivery charge, made up of the Transmission and Variable Distribution charges, is the portion of the bill that covers PECO's costs to deliver electricity to you. These charges are set by PECO and approved by the Pennsylvania Public Utility Commission. (Source www.pecoanswers.com)

Additional Riders, or charges, such as the Alternative Energy Portfolio Standard and the State Tax Adjustment Clause make up a small portion of the your over all bill.

Some more information about prices and rates: As of January 1, 2011, the prices PECO and its customers pay for electricity are based on electric market pricing, after having been capped more than 10 years. At the same time, the costs to operate PECO’s systems have been increasing. Because of these increased costs, in December 2010 the Pennsylvania Public Utility Commission approved PECO's first electric delivery rate increase since 1989. (Source www.pecoanswers.com )

To view PECO's Electric Tariff go to www.PECO.com and search for "Tariff" for their latest update.

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