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The limits of choice — and why the PUC needs to leave my dad alone

By - Last modified: February 5, 2013 at 9:44 AM

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Tim Stuhldreher

A message to the Pennsylvania Public Utility Commission: Stop annoying my father.

More specifically, please keep in mind that not everyone's heart goes pitter-pat at the thought of shopping in a competitive energy market.

My father called me last week as I was driving home. He was upset. A telemarketer from one of the gas companies had called him about switching providers, and had pushed pretty hard. He gets a lot of these calls — mostly robocalls, a few real people.

"I don't trust those guys," my father said. "The contract is for two years. Then what?"

Good question. Maybe the price rises, maybe it doesn't. Maybe other companies are offering better deals. Maybe not. Either way, you'll probably have to do more shopping down the road to find out.

My father is 81 years old. He's a smart guy, one of the smartest I know, and his faculties are absolutely intact. Until last year, he was shoveling snow for everyone on his block.

But he doesn't use the Internet. He's not going to visit PaGasSwitch, the website on natural-gas shopping that the PUC soft-launched last year and officially announced last week.

He's never had to think about energy choices before, and he doesn't feel the need to start now. Time is precious when you're 81. He'd rather pay a few extra bucks a month for peace of mind.

As I've reported before, many small-business owners apparently feel the same way.

The PUC's latest numbers, from Jan. 30, show that about 4 in 10 commercial electricity customers have switched to the competitive energy market. They account for more than 60 percent of power used in the sector — in other words, more big companies are shopping than small ones. The smaller the business, the less the fuss and bother of choice seems to be worth it.

For natural gas, the numbers are even more skewed: 23.2 percent of commercial customers have switched, comprising 60.6 percent of volume.

Among residential customers, 10 percent of gas customers have switched, compared with 34 percent of electricity customers.

The PUC wants all those numbers to go up. In particular, the agency is planning tweaks for electricity as a result of its retail markets investigation, concluded last year.

I understand the rationale for deregulating energy. The command-and-control regime needed to oversee regulated utilities is cumbersome and susceptible to regulatory capture. Markets incentivize companies to cut costs and court customers instead of (or, at least, in addition to) trying to game the system.

But markets add complexity, something consumers already face in vast amounts. Shopping isn't always empowering; sometimes it's a pain in the neck. There's a lot of fine print out there.

Not everyone wants to find out how six companies' rates stack up against a "price to compare," or search their soul to determine whether a 50 percent or a 100 percent "green energy" package best accords with their views on the environment.

A certain percentage of people are always going to stick with a default option despite incentives to change. That doesn't indicate the absence of a "robust competitive market," as the PUC puts it. It indicates that people are, well, human. If it ain't (too) broken, why fix it?

Markets are means to an end, not ends in themselves. Here's to the PUC always keeping that distinction in mind.

Tim Stuhldreher covers banking, finance, energy and environment. Have a tip or question for him? Email him at tims@centralpennbusiness.com. You can also follow him on Twitter, @timstuhldreher.

Write to the Editorial Department at editorial@cpbj.com

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