FirstEnergy PA: New Default Service Plan & Lower Electricity Rates 2027

FirstEnergy Pennsylvania Electric Company (FE PA) has submitted a new Default Service Plan (DSP) to the Pennsylvania Public Utility Commission (PaPUC). The plan, which will take effect beginning June 1, 2027, outlines how FE PA will procure electricity for customers who do not actively choose an alternative supplier and introduces new customer protections.

New Safeguards for Pennsylvania Electricity Customers

Electricity generation supply accounts for roughly 60% of a typical Pennsylvania customer’s bill, making efficient purchasing methods critical. According to John Hawkins, President of FirstEnergy Pennsylvania, “This plan introduces new safeguards to reduce the risk of unexpected rates and give customers greater clarity and stability.”

Competitive Auctions to Drive Down Costs

FE PA, which does not own any power plants, will continue to rely on competitive auctions to secure electricity at the lowest possible cost. Energy suppliers will compete to offer the lowest prices, with the winning bids determining the price to compare – the utility’s standard fixed rate for electricity supply.

The rate determined through these auctions will be adjusted twice per year, providing customers with the opportunity to compare it to offers from other suppliers. Large industrial customers who do not select an alternate supplier will continue to be billed based on hourly market prices.

Did You Know? FE PA proposes to hold auctions in January, April, and November in 2027, then transition to January and November auctions annually from 2028 through 2031.

Protecting Customers from Unintended Costs

The proposed plan includes several changes designed to prevent customers from unknowingly paying more for electricity than intended. Residential customers whose fixed-term supply contracts expire will automatically revert to FE PA’s default service unless they actively choose to remain with their current supplier.

Similarly, customers on month-to-month variable rate plans will be automatically returned to default service unless they confirm their desire to continue with their supplier’s variable plan each quarter. New guidelines for suppliers are also being proposed to encourage competitive pricing and limit the amount passed on to all customers due to unpaid supplier charges.

Expert Insight: The proposed changes regarding automatic reversion to default service and limits on supplier charge pass-throughs represent a significant shift towards greater consumer protection in Pennsylvania’s electricity market. These measures aim to address potential vulnerabilities where customers could be subject to unfavorable terms or unexpected costs.

Adjustments to Time-of-Use programme

FE PA’s Time-of-Use programme, which allows customers to save money by shifting energy consumption to off-peak hours, will also be modified. The peak hours for this programme will be adjusted to 3-7 p.m., a reduction from the current 2-9 p.m. Window.

The PaPUC is expected to make a final decision on FE PA’s Default Service programme by the end of 2026. If approved, these changes could impact how millions of Pennsylvanians purchase and pay for their electricity.

Frequently Asked Questions

What is the Default Service Plan?

The Default Service Plan explains how FE PA will buy electricity for customers who do not select an alternate supplier, beginning June 1, 2027.

How often will the electricity rates be adjusted?

The rate determined through auction will be adjusted twice a year, allowing customers to compare it with other supplier offers.

What changes are being made to protect customers?

Changes include automatically returning customers to default service when contracts end and limiting how much unpaid supplier charges can be passed on to all customers.

As the PaPUC reviews this plan, will these changes ultimately lead to more stable and predictable electricity costs for Pennsylvania residents?