by Jeff Rogyom

In today’s competitive business climate, businesses are paying more taxes than necessary and they do so at their own peril.  But when extra cash is needed, the company can hire tax professionals to recover those overpayments through refunds.

By conducting reverse audits on behalf of companies, we have rarely found a company whose tax department didn’t have some oversights, particularly regarding indirect taxes.  Likely targets for recoverable overpayments include the company’s indirect taxes, such as: sales & use taxes, value-added taxes, and excise taxes.  Certain state-specific taxes are also likely cash sources, such as the Maryland admissions and amusement tax which is levied upon the business not the customer.

Understandably, most companies’ tax staff tend to focus on federal and state income taxes.  Some companies even delegate indirect tax responsibilities outside their tax departments, such as to their accounts payable staff.  Focusing on recovering use tax overpayments and fine-tuning the accounts payable systems can create both immediate cash and long-term competitive advantages.

The process generally begins by the company sending accounts payable information to the tax consultant.  The tax consultant will evaluate the information based upon their knowledge of your company and industry.  The tax consultant will then request sample invoices based upon their analysis.  The consultant then indentifies areas with needed improvements and where refunds can be requested.  The refund recommendations may be limited to certain tax jurisdictions where refund benefits outweigh tax liability risks.

While larger companies provide more opportunities for tax recovery, some industries are particularly affected by indirect tax errors given their many available exemptions.  Companies in those industries include: manufacturers, contractors, service providers, non-profits, pharmaceuticals, and other high-tech companies.  There are many areas your company likely has not considered as tax refund sources.

With modern electronic accounting systems, the tax recovery process can be conducted with minimal burden upon company staff.  In addition, many tax consultants may agree to work on a contingency or a mixed-contingency basis.  Given the minimal risk, companies should not hesitate seeking tax recovery services.

Our Perspective:

This is a great article that outlines the opportunity for recovering overpayments of State Sales Tax. We have worked with many companies with great success in this area. Tax laws are very complicated. Let our team of professionsals help. For more information email george@hbsadvantage.com or call 856-857-1230

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Overpayment of employment taxes happens more than you think.

Prepare for a merger, acquisition, divestiture or restructuring
As part of planning for anyone of these major events, one needs to consider the employment tax consequences of these events.  Your range of rights and options to optimize your employment tax account are influenced by the timing of the event and what steps you take in advance to secure your rights.  Steps you make in corporate structure can have a tremendous effect on your employment taxation.  Analyze your options up front and execute the appropriate strategy to optimize your taxes.

For the above strategies, your state (NY 888-899-8810 / NJ 609-292-1730 / CT 860-566-1018) and/or federal agencies are available to help you better understand how these issues may influence your specific accounts.  As there are many areas of nuance in this area, please make sure to consult with a field specialist to make sure you are in compliance and correctly positioning yourself to generate cash refunds and lower tax rates.  Through strategic employment tax practices, you can improve your “asset” value of your unemployment reserves and strengthen your “cash flow” from refunds and reduced taxation.

Our Perspective:

Hutchinson Business Solutions is an independent broker that specializes in corporate financial solutions. We have worked with many corporations who recently went thru a merger or acquisition.

Did you know that the US Department of Labors states that companies who fit this profile have a 50% chance that they have been assigned the incorrect rate and that they may be overpaying unemployment taxes?

To learn more email george@hbsadvantage.com or call 856-857-1230

By Lisa Fleisher/Statehouse Bureau

February 24, 2010, 9:38PM

TRENTON — Gov. Chris Christie Thursday will propose major changes to the state’s broken unemployment system, reducing benefits for workers and limiting tax increases on employers, legislative and administration officials said tonight.

Christie’s proposal, which will need to be passed by the Democrat-controlled Legislature, is aimed at softening a tax hike business groups said was their top concern for the year, while also targeting benefits given to future unemployed workers.

Democratic lawmakers have said they would fight to protect benefits for workers, but they also said increasing taxes employers pay for workers could stunt job growth.

“I am going to have to support some element of what is being put on the table,” said Assembly Speaker Sheila Y. Oliver (D-Essex), who was briefed on the proposal Thursday. But “to have unemployed people, quote, ‘share the burden’ of dealing with our fiscal (problem), it’s like adding insult to injury to devastated New Jerseyans.”

The proposal, which would take effect in July, would reduce tax increases on businesses, institute a one-week waiting period for people receiving benefits, reduce the maximum weekly benefits check by $50 and increase benefit restrictions on people fired for “misconduct,” said Oliver and two senior Christie administration officials, who requested anonymity because they were not authorized to speak before the announcement.

With the state’s jobless rate hovering around 10 percent, the proposal would not affect employees already on unemployment.

Below is a good outline on how unemployment effects the employer.

Unemployment insurance (UI) claims all have some effect on an employer, but the effect will be small or major, depending upon the circumstances. The main determinants of how a UI claim will affect a given employer are:

  1. the type of employing unit involved;
  2. the type of worker involved;
  3. the date of the initial claim;
  4. the length of time worked by the claimant prior to the initial claim;
  5. the amount of wages reported for the claimant prior to the initial claim;
  6. whether the employer was the only base period employer;
  7. the amount of benefits paid to the claimant;
  8. the nature of the work separation; and
  9. the number of employees the company has.

 

  1. Types of Employing Units    

    While anyone who pays a worker for personal services is an “employing unit” under the law, not all employers are liable for unemployment taxes. By the same token, not all money paid for personal services falls under the definition of “wages” that are subject to reporting and UI taxation. For example, a person or company that engages an outside attorney to provide occasional legal advice is an “employing unit”, but does not thereby become an “employer” liable to report the attorney’s fees to TWC as wages and pay UI tax on such earnings. Likewise, some organizations are exempted from wage reporting and tax liability by virtue of special exemptions in the law. Organizations that are liable for wage reporting and UI payments either pay quarterly UI taxes (determined by applying the employer’s tax rate to the first $9,000 of each employee’s earnings in a calendar year) or have reimbursing status (they reimburse TWC dollar for dollar for any UI benefits paid out that are based on wages reported for the claimant). The following list indicates the most common categories of employing units and whether they are or are not liable for wage reporting and UI tax or reimbursement liability:

    1. Customers/clients of independent contractors: such employing units do not report the money they pay to the independent contractors, owe no UI tax on such payments, and have no financial involvement in any UI claims that might be filed by such workers.
    2. Some employing units are too small or pay insufficient wages to be liable under the UI system. For example, a private-sector employing unit that pays less than $1500 in wages in a calendar quarter is exempt (for household/domestic employers, the threshold is $1000 in a calendar quarter). A tax-exempt non-profit organization with fewer than four employees is also exempt from liability. During the period of non-liability, such employing units are treated like the employing units in the first category.
    3. Some employing units have some exempt and some non-exempt employees. For the exempt employees, they are treated just like the employing units in the first category above. For the non-exempt employees, they are treated like any other liable employer – see below. Some organizations, such as churches, have nothing but exempt employees and are non-liable. For a complete list of UI exemptions, see the Texas Labor Code, Chapter 201, Sections 201.042-.078, starting at

    http://www.statutes.legis.state.tx.us/Docs/LA/htm/LA.201.htm#201.042.

  2. Private taxed employers report their employees’ wages, pay quarterly UI tax on such wages (up to the first $9,000 of each employee’s earnings in a calendar year), and have potential financial involvement (chargeback liability) in any UI claims that might be filed by such workers.
  3. Reimbursing employers report their employees’ wages, pay no quarterly UI tax on such wages, and have potential financial involvement (reimbursement liability) in any UI claims that might be filed by such workers.
  4. Taxed group account employers are in a large pool of similar governmental employing units and are treated like private taxed employers, except that any chargebacks are pooled and result in a pooled (shared) UI tax rate.
  5. Non-profit organizations can elect either private taxed employer or reimbursing employer status.

 

  1. Type of Worker Involved    

    As noted above, some workers (independent contractors and employees whose services are exempt from the definition of “employment”) will not involve their employing units financially in a UI claim. All other types of workers have the potential to involve their employing units financially, depending upon whether a particular employing unit reported wages for the claimant during the base period of the claim. Here is a summary of the potential claim liabilities:

      Independent contractors – no wage reporting; no tax, chargeback, or reimbursement liability

    1. UI-exempt employees – no wage reporting; no tax, chargeback, or reimbursement liability
    2. All other workers* – wage reporting; tax liability if the employing unit is not a reimbursing employer; potential chargeback/reimbursement liability depending upon the base period

     

    None of the three categories above affects the right to file an unemployment claim. Any worker who is no longer performing services for pay can file an unemployment claim. Of course, whether the claimant can actually go on from there and draw benefits depends upon whether the claimant meets the monetary eligibility, work separation, and continuing eligibility requirements under the law.

    * The term “all other workers” includes anyone who is not either (a) accurately classified as an independent contractor or (b) an employee whose services are specifically exempted under the UI law. Since there are so many names applied to workers who perform services for pay, it would be impractical to list them all. To illustrate, such a list would include, but not be limited to, probationary employees, new hires, trainees, trial employees, introductory employees, day labor workers, casual employees, temporary employees who are not acquired through a staffing firm, “1099 employees”, “contract labor” workers who are really only misclassified employees, regular employees, full-time employees, part-time employees, PRN staff, “permanent” employees, and seasonal employees. The legal presumption in Texas is that all services are in “employment” and are subject to wage reporting and taxation or reimbursement liability, and the burden of proof is on the employer to show that a particular worker is not in employment.

    However, the term “all other workers” does not include employees of independent contractors, because those workers are employed by the independent contractor, and any UI claims they might file will involve the independent contractor. It also does not include temporary staff assigned by a temporary staffing firm or leased employees assigned by a professional employer organization (PEO, also known as an employee leasing firm), since such employees are employed by the staffing firms that assign them to clients, and any unemployment claims they might file will be the responsibility of those firms. See “Alternatives to Hiring Employees Directly” in Part I of this book.

    Date of the Initial Claim    Top of Page

    The initial claim filing date determines two very important things: the benefit year during which the claimant may file weekly claims, and the base period of the claim. The base period in turn determines the wages that will be used to compute the claimant’s weekly and maximum benefit amounts and which employers will have potential chargeback or reimbursement liability for any benefits paid to the claimant. Below is a chart showing what the base period looks like. Only base period employers have potential financial involvement in a UI claim; non-base period employers have no such liability.

    Base Period
    Quarter 1
    Base Period
    Quarter 2
    Base Period
    Quarter 3
    Base Period
    Quarter 4
    Lag Quarter Quarter In Progress When
    Claim Is Filed
    Included Included Included Included Not Included Not Included

     

    As an example, if an employer hires an employee in February, and lets the employee go after 30 days, and the claimant files an initial claim prior to April 1, then the base period would not include the first quarter of that year (the quarter in progress), nor the fourth quarter of the preceding year (the lag quarter), but would consist of the fourth quarter of the year before the year preceding the current year, and the first three quarters of the year preceding the current year. Since the employer did not report wages during that base period, it will have no financial involvement in the claim. The same would apply if the claimant waited until April, May, or June to file the initial claim – in that case, the base period would omit the second quarter of the current year, the first quarter of the current year, and consist of the four quarters of the preceding year. If the ex-employee files an initial claim after June 30 of the current year, then the employer could be a base period employer, but its chargeback liability would be limited due to having paid only 30 days’ worth of wages (see the next topic).

    Length of Time Worked Prior to the Initial Claim    

    The length of time worked by the claimant prior to the initial claim is important to an employer’s potential financial liability because it helps determine whether the employer falls into the base period of the claim. Generally, if an employee works a short period of time, and files a UI claim fairly soon after losing that short-term job, the employer will not fall into the base period of the claim. The longer the employee works for the employer, the greater the chance is that a subsequent UI claim will involve the employer in the base period. In addition, since an employer’s chargeback liability is directly proportional to the amount of wages it reported during the claimant’s base period, the longer the employee works, the more wages will be reported, and the higher the potential chargeback liability will be. That is why, as a general matter, it is better to separate a clearly unsuitable employee from the company as soon as it becomes clear that the employee will not work out in the long term.

    This factor is closely tied to the concept of a “probationary period”. Although letting someone go during a probationary period will not affect their right to file an unemployment claim by itself, it can help lower the chance that the unemployment claim will involve the employer financially. For more information on probationary periods, see

    “Probationary Periods” in Part II of this book.

    Amount of Wages Reported for the Claimant Prior to the Initial Claim    

    This factor is very closely related to the length of time worked by the claimant prior to the initial claim. The higher the wage amount for the claimant during the base period is, the higher the potential chargeback liability will be.

    Whether the Employer was the Only Base Period Employer    

    Chargeback/reimbursement liability also depends upon whether an employer was the only employer that reported wages for the claimant, or was one of two or more base period employers. An employer’s chargeback liability percentage is directly proportional to the amount of wages it reported for the claimant during the base period, measured against the total wages reported by all employers during the base period. As an example, if employer A paid 100% of the base period wages, it will have 100% of the chargeback/reimbursement liability. If A paid one-third of the wages, it will have one-third of the liability.

    Amount of Benefits Paid to the Claimant    

    This factor, along with an employer’s chargeback percentage as explained above, determines the amount of the actual chargebacks. To determine the amount, TWC multiplies the chargeback percentage by the amount of benefits the claimant ultimately draws. If the claimant draws half of the potential maximum benefit amount, each base period employer’s liability will be half of what it could have been, had the claimant drawn the maximum potential amount.

    Nature of the Work Separation    Top of Page

    The nature of the work separation goes directly to the issue of whether the claimant will be qualified or disqualified for UI benefits. If the work separation was disqualifying, the claimant will not be able to draw UI benefits, which of course will affect the employer’s financial liability for the claim. The first thing TWC does in every UI claim (after determining monetary eligibility) is determine the issue of whether the work separation was voluntary or involuntary, and then whether it was qualifying or disqualifying. A voluntary work separation is one that was initiated by the employee, and an involuntary work separation is one that was initiated by the employer. The burden of proof on the work separation issue depends upon who initiated the work separation. For a detailed look at how TWC analyzes work separations, see “Types of Work Separations” in Part III of this book.

    In a case involving a voluntary work separation, the claimant will try to prove that he or she had good cause connected with the work to quit, and the employer must be prepared to show that continued work was available when the claimant left and that a reasonable employee would not have quit for such a reason. In a case with an involuntary work separation, the employer has the burden of proving two main things: that the discharge resulted from a specific act of misconduct connected with the work that happened close in time to the discharge, and that the claimant either knew or should have known that discharge could occur for such a reason.

    Number of Employees    

    For private taxed employers, the number of employees is important because it determines the size of the employer’s taxable wage base, which is generally the number of employees multiplied by $9,000 (the figure could be lower if some employees do not earn at least that much in the calendar year). A small company will have a small taxable wage base and will experience a proportionally higher impact from a single UI claim than a larger employer with more employees and a higher taxable wage base. For details on how TWC calculates UI tax rates for private taxed employers (the vast majority of employers in Texas), see this Web page:

    http://www.twc.state.tx.us/ui/tax/uitaxrates.html.

    Conclusion

    It should be clear from the above information that there are many factors that determine how a given UI claim will impact a particular employer. While some are more under the control of employers than others, all of them are important to understand. Each claim has the potential to affect an employer’s financial bottom line, and an employer interested in controlling its labor costs will pay attention to every detail.

    As published in Especially for Texas Employers

    Top of PageTop of PageTop of PageTop of PageTop of PageTop of PageTop of Page

    Years ago, AT&T ruled the U.S. telecommunications industry. However, once deregulation was introduced, it opened the field to competition and allowed customers to shop for alternative carriers.

    The same rings true for the energy marketplace, which saw deregulation gain momentum in the late 1990’s, giving customers a choice of energy suppliers, products and prices in their utility jurisdictions. There are approximately 20 states today with deregulated natural gas and approximately 15 with deregulated electricity.

    Natural gas market

    In the past 20 years, the majority of new electric generating plants have been designed to run on natural gas. When the pipelines were deregulated and the fuel was labeled “clean”, federal, state and local governments pushed for natural gas’s usage and consumers responded by using more gas every year since.

    Natural gas has a relatively non-polluting production cycle and poses very little risk when it’s transported in pipelines. There also aren’t the emissions you have with shipping fuel by trucks and ships.

    Yor current local utility provider buys natural gas in the wholesale market and then sells it to their customers at retail prices. We put our clients in a wholesale position. 

    Expanding electricity

    Unlike the natural gas market, it’s trickier to deregulate the electricity industry. Whereas the former has a direct line from well to pipeline to user, electricity comes from multiple sources, including nuclear, coal, oil, natural gas and renewable energies.

    Deregulation of electricity allows for competion for the purchase of your electric supply in the local market and this means savings for you. 

    Your natural gas and electric is still delivered by your local provider. Should there and be any service issues or disruption, your local provider is still responsible for servicing the account.

    Hutchinson Business Solutions is an independent broker reresenting all the major deregulated providers selling natural gas and electric in the tri state area for the last 10 years.

    We offer a free analysis of your current annual natural gas and electric supply cost. Our clients are finding savings from 11% upto 48%.

    For more information and to order your free energy analysis email george@hbsadvantage.com

    On August 1 1999, New Jersey implemented electric deregulation in its state, opening its borders to competition and lower electricity prices. Electricity can be provided more cheaply in New Jersey where there is a number of competitive suppliers in the marketplace. Electric consumers need not change their electric supplier (it is the same electricity) and they only need to choose their electric provider. These electric providers buy electricity in bulk at competitive prices and redistribute savings to their customers.

    Deregulated Electric and Gas

    Natural Gas and Electric competition has substantially benefited industrial electric and gas consumers in the states of New Jersey, New York, Pennsylvania and Delaware.

    Hutchinson Business Solutions (HBS) is an independent broker representing all the major deregulated providers in this area. We will provide a free cost analysis of your commercial / industrial annual electricity and natural gas supply expense. 

    Your local providers purchase natural gas and electric in the wholesale market and then sells it to their customers at retail prices. HBS puts our clients in a wholesale position and the savings will fall to your bottom line.

    To obtain your free analysis on your commercial, industrial or business electricity email your contact information to george@hbsadvantage.com.

    In these hard economic times, Why Pay More!

    Contact us today. HBS provides corporate utility financial solutions

    By John D. Sutter, CNN //
    // -1) {document.write(‘February 13, 2010 — Updated 0103 GMT (0903 HKT)’);} else {document.write(‘February 12, 2010 8:03 p.m. EST’);}
    // ]]>February 12, 2010 8:03 p.m. EST

    Long Beach, California (CNN) — Microsoft Corp. founder and philanthropist Bill Gates on Friday called on the world’s tech community to find a way to turn spent nuclear fuel into cheap, clean energy.

    “What we’re going to have to do at a global scale is create a new system,” Gates said in a speech at the TED Conference in Long Beach, California. “So we need energy miracles.”

    Gates called climate change the world’s most vexing problem, and added that finding a cheap and clean energy source is more important than creating new vaccines and improving farming techniques, causes into which he has invested billion of dollars.

    The Bill & Melinda Gates Foundation last month pledged $10 billion to help deploy and develop vaccines for children in the developing world.

    The world must eliminate all of its carbon emissions and cut energy costs in half in order to prevent a climate catastrophe, which will hit the world’s poor hardest, he said.

    “We have to drive full speed and get a miracle in a pretty tight timeline,” he said.

    Gates said the deadline for the world to cut all of its carbon emissions is 2050. He suggested that researchers spend the next 20 years inventing and perfecting clean-energy technologies, and then the next 20 years implementing them.

    The world’s energy portfolio should not include coal or natural gas, he said, and must include carbon capture and storage technology as well as nuclear, wind and both solar photovoltaics and solar thermal power.

    “We’re going to have to work on each of these five [areas] and we can’t give up on any of them because they look daunting,” he said. “They all have significant challenges.”

    Gates spent a significant portion of his speech highlighting nuclear technology that would turn spent uranium — the 99 percent of uranium rods that aren’t burned in current nuclear power plants — into electricity.

    That technology could power the world indefinitely; spent uranium supplies in the U.S. alone could power the country for 100 years, he said.

    A “traveling wave reactor” would burn uranium waste slowly, meaning a 60-year supply could be added to a reactor at once and then not touched for decades, he said.

    Gates also called for innovation in battery technology.

    “All the batteries we make now could store less than 10 minutes of all the energy [in the world],” he said. “So, in fact, we need a big breakthrough here. Something that’s going to be of a factor of 100 better than what we have now.”

    Gates called for more investment in climate-related technology. He said he is backing a company called TerraPower, which is working on an alternate form of nuclear technology that uses spent fuel.

    Money that goes into research and development will pay bigger returns than other investments, he said, especially if money goes into energy sources that will be cheap enough for the developing world to afford.

    Clean energy technologies must be installed in poorer countries as they develop, he said.

    “You’d be stunned at the ridiculously low costs of innovation,” said Gates, who received a standing ovation for his remarks.

    If he could wish for anything in the world, Gates said he would not pick the next 50 years’ worth of presidents or wish for a miracle vaccine.

    He would choose energy that is half as expensive as coal and doesn’t warm the planet.

    As reported in Courier Post Feb 10, 2010

    Obama and Congress need a focused reform bill that brings changes most Americans want.

    Improving and reforming health care in the United States, at one time, must have seemed like a simple and clear idea to President Barack Obama. After all, once he began hard-selling the idea in the summer, his administration seemed to believe that legislation could be ready to go by Labor Day.

    That was six months ago — six long months filled with heated rhetoric, back-and-forth debate, writing and rewriting of the legislation, major changes and a steady erosion of public support among Americans.

    It was all done wrong.

    The legislation approved a few weeks back by the Senate (the version more likely to be approved than the one passed by the House of Representatives in December) is so muddled, so convoluted and confusing that it has left supporters of health care reform scratching their heads, trying to make sense of exactly what it is. It doesn’t have a public health insurance option for the most needy Americans. It won’t manage to get everyone who isn’t insured onto some kind of health insurance plan. It will lead to hefty fines for people who don’t get health insurance. And it will cost hundreds of billions.

    Bottom line, few average Americans understand very much about this monstrous, thousand-page-plus bill. What parts they do understand, they don’t like, including the cost. That’s why opposition to it has steadily mounted and support has weakened.

    That’s also why the current version of the health care reform legislation now looks destined to die. The election Jan. 19 of a Republican U.S. senator in Massachusetts who opposes the bill hit Washington like a bomb. The shockwave of that bomb: Many Democrats worried about getting re-elected are reconsidering their support for the bill. And the president is now calling for a televised, bipartisan health care summit in which Democrats and Republicans offer ideas for health care reform.

    Obama is changing his game and trying to get Republicans involved because he did it wrong. The Democrats controlling Congress did it wrong, also. They tried to write a bill without a defined set of goals. They just went about fixing every problem, large and small, that they identified. There became no central point of what this legislation would do, aside from create a public health insurance option. Then that got compromised out of the bill.

    Health care reform, if it happens at all now in a charged election year, needs to be clear of focus. It needs to prioritize a handful of important goals that most Americans want to see addressed such as lowering the cost of temporary individual (COBRA) health plans and stopping health insurers from rejecting people for coverage due to “pre-existing conditions.” Those and a few others are points we think most people and lawmakers — Republican or Democrat — can agree on.

    Stick to those things that have broad support; get Republicans involved in the process; and, above all, make the cost bearable and clearly explain how it will be paid for without cutting Medicare or Medicaid, and you’d have health care reform legislation that more Americans would understand and feel good about.

    Our Perspective:

    What seemed like a good idea has been corrupted by politics. The fact that in 2010, the United States can not offer access to basic medical care or coverage to all it citizens is shameful. 

    Those who are covered by private and group plans  are already paying  a  fee in their premiums for uninsured coverages. As usual pork and politics take front stage and the American people are left holding the bag.

    President Obama has to take charge and bring both parties together. Define what they all can agree on and strip everything else out. Maybe it cannot be done all at one time! Think of the people who put you in the office first.

    A bipartisan commission can be set up to present an overview of the implementation and define issues they find that should be addressed at a later date.

    Posted on Sun, Jan. 31, 2010

     

    By Andrew Maykuth

    Inquirer Staff Writer

    In their exuberance, oil- and gas-industry officials repeat a single refrain when describing the natural gas from Pennsylvania’s Marcellus Shale:

    A game-changer.

    Tony Hayward, chief executive officer of oil giant BP P.L.C., was the latest to gush enthusiastically when he called unconventional natural gas resources like the Marcellus “a complete game-changer.”

    “It probably transforms the U.S. energy outlook for the next 100 years,” Hayward said Thursday at the World Economic Forum in Davos, Switzerland.

    The breathtaking emergence of natural gas as America’s energy savior was not in the cards. Just four years ago, after Hurricanes Katrina and Rita devastated Gulf Coast rigs and rattled gas markets, energy pundits forecast a bleak winter of short supplies, high prices, and low thermostats.

    The vast scale of shale-gas resources has come into focus quickly, and industry officials are touting the possibility of steady supplies for decades to come.

    The Potential Gas Committee in Colorado last year revised its outlook of America’s future gas supply – up 35 percent in just two years. The forecast was the highest in its 44-year history.

    The Marcellus Shale is the nation’s fastest-growing producing area. Though it lies under five states, about 60 percent of its reserves are in Pennsylvania, according to Terry Engelder, a Pennsylvania State University geologist.

    “In terms of its impact on Pennsylvania, this is probably without peer in the last century,” said Engelder, whose projections in 2008 alerted the public about the size of the Marcellus.

    “America’s energy portfolio has undergone a first-order paradigm shift just in the last two years,” he said. “This is such an exciting thing.”

    Not everyone has climbed aboard the bandwagon. Some environmentalists are uneasy about the hydraulic-fracturing process that has unlocked the shale gas. The technique requires the injection of millions of gallons of water into a well to break up the shale to initiate production.

    And some analysts say they believe the gas industry’s estimates are too optimistic.

    “I would look at all this with a bit of healthy skepticism,” said Arthur E. Berman, a Houston gas-industry consultant, who says he believes some operators have overstated the production potential and understated the cost of Texas shale-gas wells. His pointed criticism got him banished from one trade journal – and invited to speak at scores of investor workshops.

    “Two years ago, we were talking about importing gas from the Middle East,” he said. “And now we have a hundred-year supply of domestic gas?”

    Berman said he had been unable to conduct a similar analysis of Marcellus wells because Pennsylvania law allows operators to keep their production data secret for five years, unlike other states, where output is reported to taxing authorities promptly.

    “If something looks too good to be true,” he said, “I need to look more closely.”

    Questioning voices such as Berman’s are uncommon in the industry, which portrays natural gas as abundant, cheap, and cleaner than coal and oil – a domestically produced “bridge fuel” to ease the transition to renewable wind and solar generation.

    For companies like UGI Corp. – the Valley Forge energy company that operates regulated utilities in Pennsylvania that sell natural gas to retail customers and operates unregulated subsidiaries that consume and transport natural gas – the Marcellus Shale represents a game-changing opportunity on several fronts.

    “That activity in the Marcellus Shale is really a win-win, not only for our regulated business, but also our nonregulated business,” UGI chief executive Lon R. Greenberg told analysts in a conference call last week.

    Officials at UGI and other Pennsylvania gas utilities say retail customers will benefit in the long run, as utilities begin buying their supplies from Marcellus sources, saving pipeline costs from the Gulf Coast.

    UGI’s utilities are in a strong position because many of their 578,000 customers are in Marcellus cities such as Scranton, Wilkes-Barre, and Williamsport. The utility could eventually work out deals to buy gas directly from producers.

    Though UGI has no interest in becoming a gas producer, the company is exploring the possibilities for investing in “midstream” pipelines that tie the Marcellus wells to the interstate pipelines that move gas to lucrative urban markets like New York. Expansion of the pipeline infrastructure is critical to opening the Marcellus to exploration.

    In addition, UGI is looking at expanding its underground gas-storage operations in Western Pennsylvania, said Brad Hall, president of UGI Energy Services.

    “There is a bit of a gold-rush mentality,” he said, “but in this case, there’s really gold.”

    UGI may also reap some other, unintended benefits.

    The company’s power-generation subsidiary last year announced a $125 million project to convert its aging Hunlock Power Station near Wilkes-Barre from coal to natural gas.

    Hall said the decision was made before the Marcellus abundance was fully understood. But when the plant comes online in 2011, it is likely to find eager sellers of fuel nearby.

    “It makes us look like we were really smart.”

     

     Did you know that Electric and Gas are no longer monopolies and due to deregulation you have a choice of who supplies your business with Electric and Gas services? 
    Maybe you do know because you have been getting annoying sales calls telling you to switch but you think it is a scam.
    Hutchinson Business Solutions (HBS) is an independent energy management solutions provider. Our clients are savings from 10% to 40% on their natural gas and electric supply cost.  You can save thousands and perhaps tens of thousands of dollars depending on how much energy you use.
     
    Power to Choose
    Thanks to a national energy deregulation bill passed in 1999, organizations in roughly two dozen states (CT, NY, NJ and PA included) can now manage and control their energy costs in ways never before thought possible. Before deregulation you had no choice. You did not need to pay attention to the energy markets and you simply paid the bill like everyone else. But today you have the power to choose your supplier! The savings will not come to you by default; you must actively make a choice. In a deregulated market you must decide who to buy from, when to buy, what type of service agreement, how long to contract or whether you should consider a market based (variable) rate. If you do not choose a new supplier the local utility by default will remain the supplier of your energy at the highest market rate permitted.
     
    What was deregulated?
    Simply put the supply portion of your electric bill. The utilities sold off their power plants, and now only own the transmission and distribution wires. They also serve as a ‘backstop’ for power supply to customers who do not shop for electricity. With the move to competition the utilities have separated their service into two parts:
    • Regulated distribution of power, which is still only provided by the utility, and
    • Supply (called BGS) of the electric commodity (open to competition)
    Customers who choose an alternate energy provider still have their power delivered to them by their local utility, and will therefore contact their utility for any outage issues. Depending on your utility market after you choose a new supplier you may still get one bill from the utility with two company names on it or you may receive two separate bills; one from the utility for the delivery and the other from the new supplier.
    Types of programs
     
    If you have not chosen an alternate supplier you are paying a month-to-month variable rate based on filed tariffs. This is usually the most expensive type of rate that you can have since it is based upon the demand of the month in which you were billed. Like everything else in life if you wait until the last minute to buy it you usually pay more. If you choose a new supplier you have the option of remaining on a month-to-month variable rate or choosing to lock in today’s low rates for up to three years in most markets. Energy costs are at or near their all-time lows so it makes sense to lock in for as long as you can to hedge rising energy costs and inflation.
     
     
    Types of Sales People
    First you need to know if you are speaking with a direct sales person for one supplier or an independent broker that represents multiple suppliers. HBS in an independent energy broker that will present independent and unbiased recommendations for the best program that suits your needs. We offer a free analysis of your current natural gas and electric cost and we receive a small commission from the energy supplier so there is zero cost to you the customer. 
     
    How does it work?
    To begin, all we need  is a copy of your latest natural gas and electric bill from your local provider. You will also be asked to sign a letter of authorization which permits us to pull the annual usage from these providers. With this information HBS can go out to the deregulated market and get competitive bids for your energy needs. We will then present you with the best options and you choose to activate your savings.
     
    If you activate your savings by choosing a new supplier there is no cost to switch. You get the same power, same delivery company, same poles, same wires and same meter. There will be no interruption or downtime of service. The only change will be a new bill in 45 – 60 days from a new supplier.
     
    Today’s Economy is difficult at best and you owe it to your business to see if you can save your company money. You have nothing to lose and big savings to gain. 
    For more information email george@hbsadvantage.com or call 856-857-1230