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E-mailEnergy provider to quit state
The Austin, Texas-based company on Tuesday said rising market prices for electricity led to the move. "There's a market structure in the state that won't allow the utilities in the state to raise their rates," spokesman Andy Prince said.
"If we were to charge the rates the utilities charge, we would lose money. If we were to charge the prices on the wholesale market today, our customers would be paying about $30 more a month."
Green Mountain's announcement follows a state Public Utility Commission report last week that, despite deregulation laws designed to encourage competition, there are few choices outside local utilities when it comes to natural gas suppliers. Similarly, some consumer groups have long lamented the lack of choices for residential electricity customers.
"Their leaving the market means there is no competition now, and that was an inevitable development," said David Hughes, executive director of the Pittsburgh-based group Citizen Power. "This is the death knell for electricity competition. It makes it clear that electricity deregulation is a failure."
Green Mountain has about 30,000 customers statewide, including 15,000 in areas served by Duquesne Light Co. and Allegheny Power.
Those customers will get letters next week advising them to select the local utility or another electricity provider. No one will lose service, Green Mountain officials said, explaining that customers who take no action will automatically be returned to their utility.
Customer Tim Sullivan, of Friendship, said he is disappointed. "I'm sorry to hear they are leaving. I just had a customer service issue with them, and they handled it immediately. They were terrific."
In Pennsylvania, local utilities' rates are cheaper than Green Mountain's because of rate caps and other price controls that are in effect for several years at a time.
Duquesne Light, for example, charges a customer using 1,000 kilowatt-hours a month $66.90, compared to Green Mountain's $79.45 for "100 percent renewable" power or $83.65 for "100 percent pollution free" power, according to the state Office of Consumer Advocate.
Allegheny Power's rate for the same amount of power is $38.84, compared to $79.45 or $84.85 for Green Mountain.
Customers typically chose Green Mountain because of environmental concerns and an interest in renewable power sources such as windmills. The company buys power from a wind farm in Somerset County, and solar panels atop the IKEA store in Robinson, among other sources.
Prince said the company has operated in Pennsylvania since 1999 and has one employee in the state who now will concentrate on working with utilities to build their "green" energy portfolios.
For customers who still want to invest in renewable power, the company said it will offer a $9.95-a-month package ensuring that 500 kilowatt-hours each month will be generated by wind and put into the national power grid. Payments will be made through credit card charges.
Green Mountain quit providing service in Connecticut three years ago because of a similar issue with capped rates, Prince said. The company also sells electricity in Florida, New Jersey, New York, Ohio, Oregon and Texas.
Hughes, of Citizen Power, said advocates of the state's deregulation law -- signed in 1996, and effective in 1999 -- promised robust competition that would lead to lower prices in a deregulated environment. Instead, the local utilities are continuing a transition to deregulation with "built-in rate increases that aren't necessarily justified."
State Consumer Advocate Irwin A. "Sonny" Popowsky also wasn't surprised at Green Mountain's move. "A lot of what they sell is natural gas-fired energy, and as the cost of that goes up, it's harder to offer a product to Pennsylvania consumers at a reasonable price."
Popowsky, however, said there are benefits to the utilities' long-term, set prices. "The caps are the only things right now that are protecting consumers from very high prices," he said.
