October 25, 2010

It was a tough weekend.

First, the Phillies; expectations were high. We were supposed to win. 

Did anyone tell the Giants? Either someone forgot or they were not listening. I have been accused of that; it is called selective hearing. Most husbands have been accused of that. 

Either way the Boys of Summer loss their mojo and could not even come up with hits. Especially when runners were on the bases. Think of how the game ended. Runners on first and second; 2 outs; down by 1 run and Ryan Howard works up a 3-2 count. 

Now what were we all taught way back in little league? 

This goes back to basics! When you have a 3-2 count, you protect the plate. You swing at anything that could remotely be called a strike. You don’t look at a 3rd strike!

 After all the ups and downs thru the season, we end up feeling deflated.

 Wait till next year. Spring training starts in 103 days. This may be of little solace.

 What happened to this year? The season seems to have ended prematurely.

Well, we can always turn our attention to the Eagles. They have been on a roll, 4-2 going into Sunday’s game with Tennessee.


Seems like a good problem for Andy Reid to have? They have both elevated their game and are playing at a high level. Can they remain healthy?

The defense has been putting pressure on the quarterback, controlling the run and not allowing the other teams gain any momentum.

The receivers seem to be having a protective shield around them. Taking the ball downfield, sometimes almost scoring at will.

That was until yesterdays’ 4th quarter disaster against Tennessee. 27 points? Don’t you love when they start playing the prevent defense? A recipe for disaster, bend; don’t stretch. Who came up with that defense anyway?

For Philadelphia fans it was a weekend that took the wind out of our sails. It left all the diehard fans feeling deflated. The old kick in the gut never seems to feel good but we keep coming back.

There’s always next game, next week, next season.

Philly….don’t you just love it?

Now you may be thinking why is he talking about philly sports and how does the word deflated tie into HBS?

Good question.

Most of the time when you think of the word deflated it tends to have a negative connotation. However, for us, the word can be seen in a positive context.

When the utility market is deflated, that means the commodity (natural gas and electric) market prices are down, which translate into savings for you, the client.

How much has the natural gas price index dropped?

From its’ high of $14.34 a decatherm in July 2008, it has slowly dropped over 70% during the past 2 years. In October 2010, the index was $4.12 a decatherm.

Pretty amazing!

Where’s the bottom? Some analysts think we may have neared the bottom and prices will start inching up, especially now that winter is just ahead of us. However, should we see warmer winter temperatures prevail, we may see prices drop even further.

HBS has been advising our clients to take advantage of the downside.

You may choose to lock in on a price for a 1 or 2 year term, thereby protecting yourself from market fluctuations or you may choose to float the market index and take advantage of the current downside savings.

With falling natural gas prices, you will also see this will reflect in lower prices for the deregulated electric market prices.

Why you may ask?

Well, 30% of the electric in the US is generated by natural gas. So natural gas seems to be a natural indicator on electric prices. As natural gas prices go down, so do electric prices.

If you are a business spending a minimum of $5000 a month for either natural gas or electric, you should be looking at the savings being found in the deregulated market.

Since deregulation started in the late 1990’s, the local providers were told they could no longer be in the supply business. You may choose to get your natural gas or electric from a 3rd party provider or you may continue receiving your supply from the local provider at a default price which is normally higher than the deregulated market price.

Many of our clients find out they do qualify and are taking advantage of this deregulated opportunity.

If you like to know more, email

We know that the economy has been tough on business. However, HBS has found a silver lining by bringing deregulated utility saving to our clients.

To find out if you qualify, all we need is a copy of you latest natural gas or electric bill from your local provider. We will also need a letter of authorization that will allow us to pull the annual usage for your account(s). With this information, we will be able to validate what you are currently paying and present what opportunity for savings may be available for you.

Now is the time to take deflated utility prices and let them work for you.

Let the savings fall to the bottom line!

You may find it brings a smile to your face.

As reported in NJ BIZ

The Garden State’s status as a solar-energy leader will get a major boost Wednesday, when officials break ground on what will be the largest solar energy farm in the Northeast.

Con Edison Development, a subsidiary of Consolidated Edison Inc., and Texas-based Panda Power Funds plan to build a 20-megawatt solar farm on a 100-acre site in Pilesgrove. The installation, expected to go online in May 2011, will feature 71,400 solar panels and cost between $85 million and $90 million.


A rendering of the solar farm, which will be the largest in the Northeast.

Con Edison Development and Panda announced their intent to partner on solar projects in April.

Steve Tessum, vice president of east region management at Panda and manager of the Pilesgrove project, said South Jersey was chosen as the site in part because of the state’s support of solar energy.

“We did look at other states,” Tessum said. “Quite frankly, the regulatory climate in New Jersey is friendly to somebody who wants to own and develop a solar-power utility.”

The farm will be connected directly to the electrical grid via the Atlantic City Electric distribution system, said Mark Noyes, vice president of Con Edison Development.

Noyes said the arrangement with Panda is a 50-50 partnership: Panda is taking the lead in development, Con Edison will take the lead in operations and energy management, and construction will be split.

“The reason it makes sense to partner with Panda is, much like our background, they’re developers and they know how to develop projects, whether natural gas and oil, wind, solar,” Noyes said. “The development expertise is really what drives the development.”

Noyes said the property had originally been slated for the development of 67 homes, each with its own septic tank.

“The town opposed that type of taxing, from an environmental and economic standpoint,” Noyes said. “The construction of those homes never got through the planning board, so we were able to go in and acquire that land from the local player for this solar farm.”

Tessum said the solar farm doesn’t require any municipal infrastructure development, as the housing plot would have.

Con Edison Development said the installation is expected to generate enough electricity to power 5,100 homes.

E-mail Jared Kaltwasser at

A Lot of Singles

October 20, 2010

 The baseball playoffs are in full swing and already I’m feeling the angst. Somehow the Phillies can do that to you. They have proven that they are as capable of playing and beating any team in the league (on any given night).

It seems to be feast or famine. One night everyone is hitting and they score a ton of runs. The next night, H2O is throwing a great game and the Phillies will not put a run on the board.

We find ourselves sitting there, on the edge of our seat. Victorino singles; Utley gets hit by a pitch, Palanco walks and then here comes Howard. Just one swing of the bat and the momentum will change. Howard is more than capable of doing it, but will he?

Many of us are always looking for that one big play that will break the spell and open the floodgates. Put us back in the game.

Well, we may hit that homerun at times in a clutch situation but I have found that life is made up of a lot of singles.

Singles aren’t bad!! If you are going for singles, many times you may find you get an extra base hit. Go on, stretch it out and slide in there for a double.

It’s what keeps the juices flowing. Go ahead; mix it up a little.

If we are constantly swinging for the fence, we are more apt to find disappointment. Not to say we won’t put one over the fence eventually but you may also strike out a lot.

There has to be a balance in life.

Have you ever heard…It’s the little things mean a lot.

As in baseball, I have also found this to be true in our business.

HBS provides Smart Solutions for Smart Business.

Have we ever hit a homerun? Yes we have.

But what have we built our business on?


People like to deal with someone they know, feel comfortable with and trust to do the right thing.

It is these qualities that form the bond of friendship and can help grow any business.

It is the little things that mean a lot.

Let’s keep hitting those singles!!

Go Phils!!!

As reported in the Huffington Post

Written by Robert Reich

It’s a perfect storm. And I’m not talking about the impending dangers facing Democrats. I’m talking about the dangers facing our democracy.

First, income in America is now more concentrated in fewer hands than it’s been in 80 years. Almost a quarter of total income generated in the United States is going to the top 1 percent of Americans.

The top one-tenth of one percent of Americans now earn as much as the bottom 120 million of us.

Who are these people? With the exception of a few entrepreneurs like Bill Gates, they’re top executives of big corporations and Wall Street, hedge fund managers, and private equity managers. They include the Koch brothers, whose wealth increased by billions last year, and who are now funding tea party candidates across the nation.

Which gets us to the second part of the perfect storm. A relatively few Americans are buying our democracy as never before. And they’re doing it completely in secret.

Hundreds of millions of dollars are pouring into advertisements for and against candidates — without a trace of where the dollars are coming from. They’re laundered through a handful of groups. Fred Maleck, whom you may remember as deputy director of Richard Nixon’s notorious Committee to Reelect the President (dubbed Creep in the Watergate scandal), is running one of them. Republican operative Karl Rove runs another. The U.S. Chamber of Commerce, a third.

The Supreme Court’s Citizens United vs. the Federal Election Commission made it possible. The Federal Election Commission says only 32 percent of groups paying for election ads are disclosing the names of their donors. By comparison, in the 2006 midterm, 97 percent disclosed; in 2008, almost half disclosed.

We’re back to the late 19th century when the lackeys of robber barons literally deposited sacks of cash on the desks of friendly legislators. The public never knew who was bribing whom.

Just before it recessed the House passed a bill that would require that the names of all such donors be publicly disclosed. But it couldn’t get through the Senate. Every Republican voted against it. (To see how far the GOP has come, nearly ten years ago campaign disclosure was supported by 48 of 54 Republican senators.)

Here’s the third part of the perfect storm. Most Americans are in trouble. Their jobs, incomes, savings, and even homes are on the line. They need a government that’s working for them, not for the privileged and the powerful.

Yet their state and local taxes are rising. And their services are being cut. Teachers and firefighters are being laid off. The roads and bridges they count on are crumbling, pipelines are leaking, schools are dilapidated, and public libraries are being shut.

There’s no jobs bill to speak of. No WPA to hire those who can’t find jobs in the private sector. Unemployment insurance doesn’t reach half of the unemployed.

Washington says nothing can be done. There’s no money left.

No money? The marginal income tax rate on the very rich is the lowest it’s been in more than 80 years. Under President Dwight Eisenhower (who no one would have accused of being a radical) it was 91 percent. Now it’s 36 percent. Congress is even fighting over whether to end the temporary Bush tax cut for the rich and return them to the Clinton top tax of 39 percent.

Much of the income of the highest earners is treated as capital gains, anyway — subject to a 15 percent tax. The typical hedge-fund and private-equity manager paid only 17 percent last year. Their earnings were not exactly modest. The top 15 hedge-fund managers earned an average of $1 billion.

Congress won’t even return to the estate tax in place during the Clinton administration – which applied only to those in the top 2 percent of incomes.

It won’t limit the tax deductions of the very rich, which include interest payments on multimillion dollar mortgages. (Yet Wall Street refuses to allow homeowners who can’t meet mortgage payments to include their primary residence in personal bankruptcy.)

There’s plenty of money to help stranded Americans, just not the political will to raise it. And at the rate secret money is flooding our political system, even less political will in the future.

The perfect storm: An unprecedented concentration of income and wealth at the top; a record amount of secret money flooding our democracy; and a public becoming increasingly angry and cynical about a government that’s raising its taxes, reducing its services, and unable to get it back to work.

We’re losing our democracy to a different system. It’s called plutocracy.

Robert Reich is the author of Aftershock: The Next Economy and America’s Future, now in bookstores. This post originally appeared at


Sunday, October 17, 2010; 2:32 AM

 As reported in Washington Post

Let us tell you an Ugly Truth about the economy, a truth that no one in power or who aspires to power wants to share with you, at least until after the midterm elections are over. It’s this: There is nothing that the U.S. government or the Federal Reserve or tax cutters can do to make our economic pain vanish overnight. There are no all-powerful, all-knowing superheroes or supervillains who can rescue or tank the economy all by themselves.

From listening to what passes for public debate in our country, you’d never know that. You’d think that the federal government could revive the economy quickly if only Congress would let it be more aggressive with stimulus spending. Or that the Fed could fix it if only it weren’t overly worried about touching off inflation. Or that the free market could fix it if only we made deep and permanent tax cuts.

Watch enough cable TV, listen to enough talk radio, read enough blogs and columns, and you’d think that they – the bad guys – are forcing the country to suffer needlessly when a simple and painless solution to our problems is at hand. But if you look at things rationally rather than politically, you’ll see that Washington has far less power over the economy, and far less maneuvering room, than people think.

“It’s endemic in our type of society that we always think there’s a person who holds the magic wand,” says Sen. Judd Gregg (R-N.H.), a fiscal conservative who isn’t running for reelection, so he can, well, be blunt. “But this society and this economy are far too complex to be susceptible to magic wands.”

Heaven knows we could use such a wondrous fix. Even though the Great Recession ended 16 months ago, according to the business-cycle arbiters at the National Bureau of Economic Research, that only means that the economy started to grow in June 2009. It doesn’t mean that the economy has healed. It certainly doesn’t mean that the recession’s victims have healed. Tens of millions of people are still economically wounded from declines in their home values and investment accounts. Worse, despite some modest employment growth we’re down almost 8 million jobs from the end of 2007, when the Great Recession officially began.

Now, on to the real problems in the economy: why they’ve been so resistant to the traditional cures of lower interest rates and higher government spending. And we’ll show you that, when you talk to them in private (albeit on-the-record) forums, people from across the political and economic spectrum agree that there’s no magic cure for what ails the economy.

The fact is that our nation has suffered a huge financial trauma, and it’s going to take years to get well again. This isn’t exactly unknown in Washington, but it’s not something people in power go out of their way to emphasize.

For President Obama, who campaigned on the promise of transformational change, it’s been especially tough medicine to deliver. Take his performance in a September town hall session on CNBC. People in the audience were looking for immediate solutions to their problems, and Obama seemed to struggle with how to answer them. You can see why. Look what happened to the last president who ran for reelection during bad economic times: George H.W. Bush, in 1992. Bush came under fire for not doing more to help people who lost their jobs in the recession that had started in 1990, and for not showing more empathy in public.

After losing to Bill “It’s the economy, stupid” Clinton, Bush blamed Fed Chairman Alan Greenspan for his defeat. (If Greenspan had cut interest rates, the thinking goes, it would have looked as though Bush were doing something.) Seven weeks after Election Day, the recession arbiters announced that the downturn had actually ended in March 1991 – some 20 months before the election. Bush was right, as it turned out, not to push for extraordinary measures. But tell that to the voters.

Not the normal recession

If you think Bush had troubles, imagine what Obama is wrestling with. Today’s economic problems have proved enormously resistant to the traditional rate-cutting cure Bush wanted “Maestro” Greenspan to order up. That’s because the Great Recession, whose aftermath we’re living through, was different from the 10 previous post-World War II recessions. Those slowdowns were caused by the Fed’s increase of short-term interest rates to combat inflation. Recessions caused by the Fed’s rate-raising could be cured by the Fed’s rate-lowering. If things looked especially dicey, the federal government would send people checks to generate economic activity and spur confidence.

But the Great Recession was different. It was triggered by a financial meltdown brought on by excessive lending, reckless risk-taking, the implosion of an unregulated shadow banking system that assumed that short-term money would always be available – and ignorant and careless borrowing by people and institutions. The recession’s genesis is why things are still sluggish even though the Fed has cut short-term rates, which it controls, to virtually zero and has forced down long-term rates, which it doesn’t control, by buying more than $1 trillion of securities in the open market and letting it be known that it and other central banks will buy more.

Yet although such “quantitative easing” – econo-speak for “printing money” – helped allay financial panic in 2009 by providing cash to institutions that needed it badly, it’s less effective and more risky to use it to stimulate the economy. Hence the knife fight at the Fed Board of Governors between the fans of quantitative easing and those opposing it.


Let us explain. Even though the Fed is very powerful, it’s not all-powerful, just as the United States is not all-powerful when it comes to its own financial affairs. The Fed has to worry not only about the U.S. economy and money supply but also about debasing the dollar too much too quickly, lest it spook the foreigners who finance our trade and federal budget deficits. If foreigners lose faith in the dollar’s value, it could run our interest rates up sharply and abort any recovery.

To its credit, the Fed – the one institution that because of its independence can actually act quickly without making a political show – sort of admits that its power is limited.

“Central bankers alone cannot solve the world’s economic problems,” Chairman Ben S. Bernanke said in a speech at the Fed’s conclave in Jackson Hole, Wyo., in August.

The Fed wouldn’t let us interview Bernanke about the limits of the Fed’s power. It’s easy to see why: He’d risk diminishing what remains of the Fed mystique by talking on the record about its limitations and problems.

However, former Fed vice chairman Donald Kohn, a 40-year Fed veteran, agreed to discuss those limits, provided we made it clear he was speaking for himself as an outsider, not for the Fed.

“The Federal Reserve can make a difference, but it doesn’t have a magic bullet,” Kohn said. “It can’t take a weak economy facing a lot of major challenges and rapidly turn it into a strong economy.”

Kohn isn’t alone in that view.

“The public has been sold this notion that somehow we can control the economy – that we can fine-tune it so we don’t get inflation on the upside, we don’t get recessions on the downside, [that] when something happens, they can step in and offset it,” says another longtime Washington insider, Douglas Holtz-Eakin. “The economics profession is painfully aware that this is just not true, and [that it] has a terrible impact on politicians, presidents in particular.”

Holtz-Eakin, president of the American Action Forum, a conservative think tank, was Sen. John McCain’s economic adviser in the 2008 campaign. He and his Democratic counterparts know the dirty little secret: that the huge financial trauma suffered by the economy won’t disappear overnight.

“No one has found a way to have an incredibly severe financial crisis and snap back a year or two later,” says Jason Furman, deputy director of the White House’s National Economic Council.

Losses: Plenty of them

Look at the numbers on the economy and you’ll see why. The biggest single source of wealth for many people – their home equity – has fallen almost 50 percent from its peak in 2006, according to Federal Reserve statistics. Loss: $6.5 trillion. U.S. stocks are still down 25 percent from their peak in 2007, their 75 percent gain in the past 19 months notwithstanding. Cost: $4.8 trillion. Then there are the 7.7 million lost jobs with their associated lost income, lost wealth and lost consumer spending. Loss: untold trillions of dollars.

This wealth-reducing trauma, combined with consumers becoming afraid to spend and lenders changing from being ultra-lax to ultra-strict, has sucked huge amounts of money from the economy. Don’t let occasional upticks in consumer spending, the stock market or home equity fool you into thinking that things are okay, because they aren’t.


“The economy suffered a really deep wound – it’s healing, and it’s a little bit uneven,” says Alan Krueger, assistant Treasury secretary for economic policy. “But that is what you’d expect given the loss of wealth from the financial crisis.”

People used to collectively spend more than they took home – hence, our negative national savings rate, which was covered by borrowing. Now we’re spending 6 percent or so less than we’re taking home. That’s a big head wind to fight. The switch from borrowers to savers augurs well for the long run, if the trend lasts. But in the short run, it hurts the economy by diminishing activity. Compared with all the losses we’ve talked about, the $814 billion in stimulus spending – the effectiveness of which we won’t get into today – is small beer.

So what do you do? One proposed solution is to jump-start the economy with deep and permanent tax cuts. That’s more than a little problematic, given that the Great Recession began in 2007, when tax rates, especially on investment income, were about the lowest in modern times and there were no “Obama tax increases” on the horizon.

President George W. Bush had pushed through two big tax cuts – one in 2001 because the government was supposedly taking in too much money, the second in 2003 to stimulate investment. But the economy tanked anyway. The latest tax-cut screed, the Republican Party’s Pledge to America, has no meaningful numbers, proposes no changes in programs like Social Security, Medicare and defense, and asks no sacrifices of anyone, yet it says it can balance the budget. Good luck with that.

What about having the Treasury engage in a massive stimulus program to put money in people’s pockets and have them spend it, ginning up economic activity and restoring confidence? But stimulus money has to come from somewhere – and it doesn’t seem possible for the Treasury to raise a few trillion more stimulus bucks without dire consequences to interest rates and the dollar’s value.

It doesn’t help that the administration wrongly predicted that its stimulus package would hold unemployment to 8 percent; the rate soared to 10 percent and still hangs stubbornly in the mid-nines.

Other institutions, such as the Fed and the Social Security Administration, both nonpartisan, also underestimated our economic problems. But the administration’s mistake, which seems to have been an honest one, has undermined its credibility.

The fact that stimulus programs seemed designed to favor unionized workers, a core Democratic constituency, didn’t help. Nor did the fact that Cash for Clunkers and the $8,000 credit for first-time home buyers caused one-time spikes in new-car and house sales that fell off sharply after the programs expired.

‘Quantitative’ what?

Our final little secret is that the United States is now being forced to live within its means, and that’s not fun. For years our country could spend and spend because two bubbles showered companies, consumers and governments with free money. Who needed to save when stocks were producing returns of almost 20 percent a year, which they did from August 1982 through the spring of 2000? Or when house prices rose at double-digit rates and you could get cash easily and quickly through refinancing, a second mortgage or a home equity loan? Homeowners raising and spending cash propped the economy for years.

The closest we’re likely to come to free money is the Fed’s proposed quantitative-easing moves to buy Treasury securities. Let us show you how it works – and the problems with it.

Let’s say the Fed buys $1 trillion of Treasury securities in the secondary market. Out of thin air, it creates $1 trillion in credit balances in the sellers’ accounts. The sellers have $1 trillion more cash than they did, increasing the money supply. There is now $1 trillion less in publicly traded Treasurys, which props up their price.

By contrast, if Goldman Sachs wanted to buy $1 trillion of Treasury securities, it would have to find $1 trillion of cash to pay for them. Sellers would have $1 trillion more cash than before. Goldman would have $1 trillion less. There would be no increase in the money supply or decrease in the Treasury supply.


If the Fed could buy endless amounts of Treasury securities without any side effects, it would be almost like free money. The securities would cost the Treasury little or nothing in the way of interest, because the Fed turns over its profits – $53 billion last year, $40 billion in the first half of 2010 – to the Treasury.

So if the Fed buys $1 trillion of 2.5 percent, 10-year Treasury notes, Treasury’s $25 billion annual interest expense is offset by the $25 billion of extra profit the Fed would make, all (or almost all) of which would be turned over to the Treasury. See? Isn’t that grand?

There is, however, a problem. The Fed can’t do that indefinitely without touching off inflation, debasing the dollar, or both. Markets are bigger and more powerful than the Fed.

Consider the reaction of people like veteran Wall Street value investor Hugh Lamle of M.D. Sass to quantitative easing.

“It’s one thing to do $800 billion once,” he says. “But if the federal government is going to print $1 trillion a year for five years, maybe I don’t want to be in dollars.”

A second factor is that long-term rates are already so low that it’s not clear how much stimulus you get from cutting them more. It’s a big deal to cut interest rates to 5 percent from 8 percent. But at lower levels, the result is less dramatic.

Do you think the difference between 3 percent and 2.5 percent is going to matter? Meanwhile, these ultra-low rates are penalizing American savers – especially retirees relying on CD income to supplement Social Security. They tend to spend all their income, and it’s down sharply. That’s one reason the economy is weak.

Don’t get us wrong, there are plenty of winners in this game – just not the ones who need help. Cash-rich corporations are issuing billions of dollars of cheap debt for purposes such as buying back stock rather than expanding and creating new jobs. Corporations have record cash on hand but aren’t using it to expand in the United States.

Banks, too, are profiting mightily from quantitative easing. They can borrow short-term money for essentially nothing, then buy Treasury securities, knowing that the Fed will support the securities’ prices by buying them in the market. Playing the yield curve is easier, less risky and more lucrative than what the government wants the banks to do, which is to make loans.

It comes down to housing

Perhaps the biggest problem we have standing in the way of having good times return is housing – which is an example of how deep-rooted our problems are and how resistant they are to government programs.

Housing was a major source of national wealth for decades, and home equity, however sadly diminished, is still the biggest single piece of wealth many Americans have. That’s especially true of lower-income people.

No one shouts this from the rooftops, but the federal government and the Fed are doing all they can to prop up house prices. Thanks to the Fed’s forcing down of long-term rates, fixed-rate mortgages are at record lows. Most of those mortgages come via Uncle Sam.

For the first half of the year, 89 percent of mortgages came from the government-run Fannie Mae, Freddie Mac, Federal Housing Administration and Department of Veterans Affairs, according to Inside Mortgage Finance. That’s almost triple the levels of housing’s peak years: 31 percent in 2005 and 30 percent in 2006.

Even with all that effort, though, housing prices may be stabilizing at levels far below their peak four years ago rather than recovering broadly.

When will house prices get back to where they were? John Burns of John Burns Real Estate Consulting, one of the nation’s savviest real estate analysts, invokes the seven-and-seven rule. In previous local-market bubbles, Burns says, “the rule of thumb is seven years down and seven years up” after the bubble pops. Apply that rule to the national market, where the bubble popped in 2006, and we’re talking about a sustained recovery starting in 2013, and taking until 2020. That’s pretty grim, but probably realistic.

So when are we going to know when things are getting better? They may, in fact, be getting better now, but it’s going to take a long time for the wound to heal completely. We need to take care of people who have lost their jobs and lost their hope.

But after the midterm elections, when there’s going to be immense pressure to adopt everyone’s programs, we can’t just throw money at everything, searching for magic cures and magic sound bites. If we do, it will take us that much longer to climb out of the hole.

Allan Sloan is senior editor at large at Fortune magazine. Tory Newmyer is a writer at Fortune. Doris Burke is a senior reporter at Fortune.

As posted on Peco Website



Customer Education


Helping PECO customers manage
changing times

Beginning January 1, 2011, the prices PECO and our customers pay for electricity will be based on electric market pricing. Gas and electricity will cost customers more. At the same time, PECO’s operational costs have increased.
We want to help you manage these changes. This Web site will help keep you informed, answer questions and offer strategies to help save or offset much of the increase. Please look around. If you can’t find the answer here, let us know and we promise to find it for you.
For more information, visit:

PECO Reaches Gas and Electric Delivery Rate Case Settlements
Settlements provide necessary funds for reliable electric & natural gas service, customer support and low-income assistance

PECO today filed joint settlement petitions for consideration by the Pennsylvania Public Utility Commission (PAPUC) that reflect agreements reached with all interested groups on the increases in natural gas and electric delivery charges beginning Jan. 1, 2011.

“We are pleased to have worked cooperatively with all involved to reach these agreements,” said Denis O’Brien, PECO president and CEO.  “These settlements will help us continue to provide reliable gas and electric service and quality customer care while also managing the impact of these changes to our customers.”

The settlement reflects a $20 million overall increase in natural gas delivery rates and a $225 million increase in electric delivery rates.  Specifically, with these increases PECO will:

  • Continue to invest in our electric and natural gas delivery systems – replacing equipment, upgrading infrastructure and investing in new technology.  We plan to invest about $1.7 billion in our electric delivery system and $380 million in our natural gas delivery system during the next 5 years – ensuring reliable service to customers and employing thousands of people in our regional workforce.
  • Continue to improve customer service, and expand our natural gas energy efficiency programs.
  • Increase assistance to low-income customers by providing more tailored assistance programs and limiting total program costs.

I think we just dodged a bullet! Last week the meteorologists were having a field day tracking this massive storm that was supposed to hit the east coast. High winds, heavy rains. Normally, when we get a bye, the storm sweeps out into the ocean. This storm actually went inland, west of the I95 corridor. Sad to say, they did get substantial flooding.

Why am I talking about the weather, you may ask? Because this is my article, I can choose a topic. Seriously! … Because weather plays a very big part of monitoring natural gas commodity cost.

The current natural gas prices are still the lowest they have been in the last 4 years. September’s NY Index price (the price that providers buy gas) was $.39 cents a therm compare this to $1.41 in July 2008. Quite a difference! Why, you may ask?

First of all, natural gas storage levels continue to be at a 5 year high. Add to that, the shale natural gas that been found in western PA. They are saying this could provide natural gas to the US for the next 100 years.

It is the old supply and demand theory, until the market deems it appropriate to ignore.

For now, market activity show that this is a great time to be buying gas in the deregulated natural gas market. Remember, that since deregulation, the local providers are no longer in the supply business. Therefore they charge you a default rate, which in normally higher. They buy natural gas wholesale and bill their customers’ retail.

HBS puts our clients in a wholesale position. Our clients are finding saving from 10% upto 20+%, depending on who your local provider is.

Since 30% of the electric is generated from natural gas, it also plays an important influence to the current market electric prices. They are also at a 4-year low.

To qualify your commercial natural gas or electric bill should be a minimum of $3000 a month each. Many of our clients are finding substantial saving in the deregulated utility market.

Should you like to know more about savings in the deregulated natural gas and electric market email or call 856-857-1230.