What’s Up?

March 24, 2011

I say potato.

You say patato.

The difference may be just an inflection

Or the pronunciation of the word

(in this case it was my spelling, so you get the gist)

However, we all know what we are discussing.

Shame that the same thing cannot be said

About the word…….

Deregulation……

We should all know what we are discussing

We should all be on the same page…..

But there are so many stories……

Each one providing the best deal……..

A once in a lifetime offer……

Get in on the ground floor…….

What is going on????

With electric prices being at a 7 year low

We are finding, that everyone and their brothers,

Are now selling energy………

I get calls at my office almost….. everyday

Would like to switch electric providers?

How would you like to earn some extra cash?

The market is being inundated.

I am surprised Comcast and Verizon are not selling energy?

HBS has been selling energy to commercial clients for over 10 years

I would like to take a few moments to add our perspective.

Define what we see as the opportunity.

Educate our clients and friends.

Business

 

 

  • The deregulated electric market price is closely tied to natural gas pricing.

 

  •  
    • Thirty ( 30%) of the electric generated in the US is made with natural gas. Therefore, natural gas is a good indicator of the market prices.

 

  • Natural gas market prices are the lowest they have been in the last 4 years.

 

  •  
    • As a result, the deregulated market price of electric has also dropped.

 

  • Many experts think that we may have hit the floor on natural gas prices back at the end of October 2010.

 

  •  
    • The market has gone up and down several times since then, but it has never gone back to the low point recorded on October 25th, 2010.

 

This information indicates that clients should be looking to lock in or fix the price of electric with a 3rd party deregulated provider for a minimum of 1 year…… possibly 2 years.

We have actually seen instances where the 2 year fixed price is more competitive and offers more savings.

Each account is unique. Prices are all based on demand factors.

Are you a seasonal account?

(Highest usages during summer months)

Do you use most of your energy during the day?

(On Peak….when prices are higher)

Or do you have mixed usage?

(On Peak and Off Peak)

All these factors play into defining the deregulated market rate for your account.

Do you have annual usage demands

vs seasonal usage demands……

Your fixed rate will be lower.

(your demand usage is being spread out over the entire year)

Is your usage a mixed between on peak usages and off peak usages

vs only using power during the day,

when rates are the highest

Then your rates will be lower.

Each provider has their sweet spot. A client profile, they are most competitive with in that market.

HBS is an independent energy management consultant. Thru our strategic partnerships, we represent all the major deregulated gas and electric providers selling energy in deregulated states.

Our expertise is the ability to properly define the market and select the provider(s) who will bring the most competitive fixed rate, offering the best opportunity for savings to our clients.

What about Variable rates?

There are many companies now offering variable rates for electric.

Month to month contracts….offering savings of around 10%.

If the market prices are near the bottom,

Why would it not be in the clients’ best interest to lock in a fixed rate instead of floating with a variable rate?

As the summer season starts,

Market rates will also go up,

Due to summer demand.

So will those variable rates!!!!

It only makes sense to lock in on a fixed price,

if the market presents the opportunity.

In the deregulated energy market,

You are dealing with a commodity.

Timing is everything.

Let HBS be your eyes and ears.

Next week, we will outline using an independent broker vs buying online. Also, what does it mean when you say the price is fully loaded

To learn more about deregulated opportunities for your company email george@hbsadvanatge.com  

Visit us on the web www.hutchinsonbusinesssolutions.com

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