Natural Gas Prices Drop

December 12, 2014

It looks like the natural gas market

Has shaken off the fears

Of having a cold winter

Once again this year

After beating the drums

For 11 months

Driving up market prices

Now

That winter is here

The market sees no fear

And has been in free fall

Not to say

That things could change

Remember we are dealing

With the fickle energy market

We have heard many times

Timing is everything

Well you can’t say

I didn’t tell you

If you are currently

With the local provider

Or

You are floating with a 3rd party provider

Now’s the time to lock in on savings

Market prices are well below

What you would be paying

For those businesses

Who use gas

To heat their buildings

Statistics show

You use about 60% to 70%

Of your annual natural gas usage

Between the months

November and March

To heat your building

One cold snap

Can push prices thru the roof

It is smart to protect yourselves

During these high usage months

By locking into a competitive

Fixed rate contract

Give us a call

Or shoot us an email

We are here

To help you save money

Advertisements

By SANDY SHORE, AP Business Writer–8 hours ago

Battered natural gas prices are getting a bit of a break as cooler spring weather raises expectations that demand may improve.

Natural gas rose 6 cents to finish at $2.186 per 1,000 cubic feet in Friday trading. That’s up nearly 15 percent from April 19 when the price hit the lowest level in more than a decade at $1.907 per 1,000 cubic feet.

The price has plunged this year as a natural gas production boom created a glut of supply and demand dropped during a mild winter.

Now, some in the market are suggesting demand will strengthen, which help boost prices.

Cooler weather moving across the Northeast, parts of the Midwest and the Rockies this weekend could prompt homeowners to turn up the heat, creating more need for natural gas.

In addition, utilities have been substituting cheaper natural gas for coal to generate electricity. As much as six billion cubic feet a day of natural gas has replaced coal-fired power generation this year, said Ron Denhardt, an analyst with Strategic Energy & Economic Research. Consumption on an annual basis is about 66 billion to 67 billion cubic feet a day.

In addition, some energy companies have cut production because low prices can make it unprofitable to drill for some types of natural gas.

Yet, several analysts believe any rally will be short-lived.

With May upon us, any pick-up in demand for heating will be brief. About 70 percent of the nation’s demand for natural gas comes during the winter to heat homes and businesses.

Natural gas inventories continue to build. Analysts say that underground storage could be filled to the brim by fall without additional production cuts or an extremely hot summer that boosts electricity demand for cooling.

“It’s fundamentally a disastrous market,” Denhardt said. “I can’t see any turnaround of any significance before November, December of this year.”

PFGBest analyst Phil Flynn said there has to be an even bigger drop in price to force companies to cut more production. He speculated that the price will test an all-time low of $1.35 per 1,000 cubic feet.

In other energy trading, oil prices rose slightly, as traders shrugged off a report that the economy grew more slowly in the first three months of the year as governments spent less and businesses cut back on investment. But consumers spent at the fastest pace in more than a year. The Commerce Department said Friday that the economy grew at an annual rate of 2.2 percent in the January-March quarter, compared with 3 percent in the final quarter of 2011.

Benchmark oil rose 38 cents to end at $104.93 per barrel in New York. Brent crude fell 9 cents to finish at $119.83 per barrel in London. Heating oil lost 1.37 cents to end at $3.1807 per gallon and gasoline futures rose 2.29 cents to finish at $3.2062 per gallon.

At the pump, gasoline prices were little changed at a national average of $3.826 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That’s 8.5 cents less than a month ago and 5.3 cents lower than a year ago.

Best Time

February 14, 2011

When is the best time to buy energy in the deregulated market?

I have heard statements from clients saying, “Let’s wait to July or August and then we’ll look at it.”

This seems to be a common misconception. When buying a commodity, we are dealing with a fluid market.

Prices are constantly changing.

During the last 4 years, we have seen the Nymex go from a high of $13.105 in July 2008 to a low of $2.843 in September of 2009.

What is the Nymex?

The current price of natural gas out of the ground in the Gulf of Mexico to the shores of Louisiana.

When quoting fixed natural gas prices we must add the basis cost, which is the cost of transporting natural gas from the shores of Louisiana to the gate of the local provider (PSEG, SJ Gas, PGW, Peco  etc).

The Nymex is normally used as a gauge to determine where the natural gas and electric markets are at any given point of the day.

Nymex is up, means that gas and electric prices will be increasing

Conversely,

Nymex is down, means that gas and electric prices will be dropping.

This is not necessarily a proportional shift but it is a good indicator.

I went back over those 4 years and looked to see when the Nymex was at its’ highest and lowest points.

Year        Average Cost        Lowest   Month   Highest   Month

2007       $6.376 dth            $5.43      Sept        $7.558    April

2008       $8.437 dth            $6.469   Nov        $13.105   July

2009       $3.475 dth            $2.843     Sept      $6.136     Jan

2010       $3.908 dth            $3.292     Nov       $5.814     Jan

Our goal at HBS is to properly monitor the market swings and to communicate with our clients when the opportunities present the best value.

Dealing with a utility is not like dealing with other contracts in business.

You do not have to wait for the contract to expire.

There is no guarantee that the best opportunity will be available.

As of this writing the Nymex is at $3.93 and it is only mid-February.

Could the market go lower?

Yes..

But there is more of an upside risk!

Prices could easily go higher.

 

How much lower will the market go?

The floor is not determined until it passes

And then it may be too late.

When dealing with a commodity….

Timing is everything!

I often say that a client who buys deregulated utilities is like a person who shops at Syms.

“An educated consumer is our best customer.”

HBS strives to educate our clients and keep them informed,

Providing…

Smart Solutions for Smart Business

If you would like to know more about deregulated utilities and your business call 856-857-1230 or email george@hbsadvantage.com

David Parkinson – Globe and Mail Update Dec. 31, 2010 5:41PM EST

When Arthur Berman argues that natural gas is destined to have better prices in 2011 than it had in a mediocre 2010, he isn’t talking about technical price charts, or historical correlations, or relative valuations, or even supply-and-demand balances.

No, his view is more down to earth. He’s talking about geology.

“I’m a working petroleum geologist, I’m not a financial analyst,” said Mr. Berman, a prominent Houston-based energy consultant whose controversial views on the North American shale-gas phenomenon have raised eyebrows in the industry. “We probably have a lot less natural gas resource than is commonly believed. “So, what I see is that natural gas prices will not remain depressed. I’m not a price forecaster, but I have every reason to believe that a long position in natural gas [investing] is a smart position.”

The natural gas pricing story has been all about shale gas in 2010, and its fate in 2011 is closely tied to this big wild card, too. Thanks to advances in drilling technology for extracting gas from seams in shale rock, there has been a rapid expansion of drilling in shale plays that were once considered impossible to economically exploit. The resulting boom in production has unleashed substantial new supplies on the North American marketplace, outstripping demand and bloating inventories. Volumes of gas in U.S. storage facilities swelled to record levels last month – 40 per cent higher than they were 10 years ago, almost 20 per cent higher than five years ago – even as gas consumption has rebounded to near pre-recession levels.

That kept natural gas prices low and in decline for most of 2010. Even with the high-demand winter season approaching, prices struggled to stay above $4 (U.S.) per million British thermal units on the New York Mercantile Exchange well into December – their weakest December prices in nearly a decade.

The majority of industry analysts believe the shale-gas boom will continue to keep supplies well above consumption levels in 2011, weighing down natural gas prices. “The fundamentals of oversupply are not likely to change in 2011,” said Peter Tertzakian, chief energy economist at ARC Financial Corp. in Calgary. “Since we expect U.S. natural gas demand growth to come to almost a standstill in 2011 and supply growth to stay in positive territory, the inventory glut remains a concern,” said analyst Dominic Schnider of UBS AG in a recent research note.

But a vocal minority – led by the likes of Mr. Berman and renowned long-time oil and gas forecaster Henry Groppe – believe shale gas may be a bubble that could begin to burst in 2011. They are concerned with both the extremely rapid rates at which production from new shale-gas wells drops off, and the high costs of development and production that suggest to them that producers won’t be willing to keep up the high pace of drilling in shale plays at these unprofitable prices much longer. “[Shale] is a great new resource. I don’t dispute for a moment the size of the resource or its importance,” said Mr. Berman, who, like Mr. Groppe, serves as a consultant to Toronto-based fund management company Middlefield Capital Corp. “What I question is, ultimately, what it will cost to produce the resource.” Mr. Berman’s analysis tells him that North American shale-gas reserves have been exaggerated; that “more than half of the commercial reserves are produced in the first year” of each well; and that the full costs for producing shale gas work out to about $7 per million BTU – far above the current selling price.

He believes companies have been encouraged to aggressively drill U.S. shale plays due to regulations requiring producers to either initiate drilling on their properties or lose them – they want to secure the land. But that won’t continue through 2011, he said. “As I listen to the comments of the executives of the companies that are most active in the shale plays in the U.S., they’re all saying that they’re going to continue to hold the land through the first half of 2011, and then you’re going to see a big decrease in [drilling] rig count,” Mr. Berman said. “They’re smart people; they’re not going to continue to do this beyond the time that they have to.” Instead, he said, companies will redirect their drilling rigs to oil properties, where the cost-to-price equation is much more profitable. That will slow natural gas volumes and change market perception of shale’s potential, he said – and that will push up prices. “It would not surprise me to see the end of 2011 start to see a notable recovery of price,” he said.

Mr. Tertzakian acknowledges that natural gas prices must eventually revert to at least high enough to cover “the marginal costs of producing natural gas in North America,” which he pegs at the $5 to $6 range. However, he doesn’t see that happening in 2011 – and he doesn’t envision a major drop-off in shale drilling or a serious hit to supplies over the next year. “There’s no shortage of gas in the ground. We can debate the technical nuances, but at the end of the day, it takes a certain amount of money to exploit these things – the only restriction is the availability of capital.” He expects some slowdown in natural-gas rig count in the second half of next year could moderate supplies, but that won’t do much to make up for what should continue to be a weak market in the first half – making for another year of 2010-like prices.

“Prices in 2011 will be similar to 2010,” agreed Bill Gwozd, vice-president of gas services at Calgary energy consulting and analysis firm Ziff Energy Group. “That’s not a healthy price for producers – but it’s quite nice for consumers.”

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 george@hbsadvantage.com or call 856-857-1230.

June 3, 2010    as reported by electricitywatch.com

On June 1, new summer default rates went into effect for all New Jersey customer s being serviced by JCPL (Jersey Central Power & Light) who are still on the utility’s price to compare default rate.

While residential competitive electric providers remain limited in the state, there are roughly two dozen competitive electric suppliers offering lower rates for commercial and industrial customers compared to the JCP&L default price to compare rate.  Business customers in the GS rate class will pay a rate of $0.115462 from June through September of 2010, and then pay $0.110205 from October 2010 through May 2011.  Current fixed competitive electric rates in the area are in the low $0.10s per KWh resulting in savings for most businesses between 8-14%.

Default rates in JCPL are derived from auctions the utility performs in previous years for the current year.  Due to lower natural gas prices, current market rates for electricity are lower than the current default rates resulting in saving opportunities for businesses.

For more inf0rmation on Jersey Central Power and Light competitive rates, send an email to george@hbsadvantage.com .

    

One of the easiest ways to save money these days is to switch utility providers. Recent increases in the cost of energy are astonishing and finding a competitive deal is a must. There’s hot competition in the utility markets with many companies competing on price alone, as services are otherwise the same across the board.

Apples to Apples

Current market conditions have opened the door to many new faces selling energy in NJ and PA.  The difficulty is to properly define all the ancillary costs in order to present a true comparison of your current cost and the true savings that will be realized during the term of the contract.

Hutchinson Business Solutions (HBS) is an independent energy broker and has been defining saving opportunities in the deregulated natural gas and electric market for the past 10 years. We represent all the providers selling energy in New Jersey and Pennsylvania.

10% to 50% Savings

Though each account is unique, many of the deregulated providers have what they consider to be their sweet spot (their most competitive market).

Because of our strong personal relationships with the providers we are able to more accurately identify the right provider/s for you.  This enables us to present a specific proposal outlining your current cost and all the deregulated utility opportunities available.

We understand your time restraints.  We have an excellent streamlined procedure that makes the whole process simple and easy.  All we need is a copy of your latest provider invoice with a signed letter of authorization, which allows us to pull the annual usages on your account(s).

All the savings fall to your bottom line

There are no costs associated with our service. We receive a small residual from the provider during the term of your contract.

To qualify, your monthly energy costs should be a minimum of $5,000 for electric and $3,000 a month for natural gas.

To find out more, email george@hbsadvantage.com or call 856-857-1230.

You may also visit us on the web to learn more about savings in the deregulated utility market. www.hutchinsonbusinesssolutions.com

As reported by Public Service Commission of Wisconsin

HBS has been an independent energy broker for the last 10 years. Many times we are asked why the natural gas market can be so fickle and prices vary so widely from day to day. Below is an overview I found that may help shed some light on the subject.

Let us know your thoughts?

Consumers are sometimes surprised when they open their natural gas bills. The rate that their local utility charged this month could be 25 percent higher than it was just last month. That same rate, however, could at the same time be 30 percent lower than it was last year. This leads some consumers to wonder what is going on at the utility. The fact is that natural gas price changes are driven by several different factors, some of which the utility has control over, and others it does not. Some of these costs are subject to regulatory oversight while others are not. Some of these factors change infrequently and in small increments, while others swing widely from month to month. Still others vary by the season.

What causes natural gas price changes?

What is the wellhead price?

Why is the commodity price so unstable?

What do utilities do to insulate customers from volatility?

What are interstate pipeline costs?

Are pipeline rates constant from season to season?

How does increased winter usage affect pipeline capacity costs?

Are there other reasons that a natural gas rate changes?

What are local distribution service rates? 

 What causes natural gas price changes?

Changes in natural gas prices are caused by five principal factors. Natural gas rates change when there are: 1. Changes in the unregulated wellhead or commodity price of natural gas 2. Changes in the overall level pipeline demand charges approved by the Federal Energy Regulatory Commission (FERC) 3. Changes in the period of collection of pipeline demand charges approved by the Wisconsin Public Service Commission (PSC) 4. Special circumstances such as pipeline refunds 5. Changes in local distribution service rates approved by the PSC

What is the wellhead price?

The price of gas at the site of production is referred to as the commodity price or wellhead price. Of all the cost components, natural gas commodity prices are by far the most unstable and the least predictable. Figure 1 shows monthly wellhead prices of natural gas from 1999 to 2009. It is clear that these prices move around quite a bit from month to month and from year to year. Natural gas price volatility is among the highest of all commodities that are traded on major market exchanges. The price can unexpectedly double in a matter of months. It can also tumble by 50 percent just as fast.

Why is the commodity price so unstable?

The natural gas commodity price is so volatile because it is a market price, not a regulated price. Market forces reflect the underlying supply and demand situations. Since there is no regulatory oversight a sudden unexpected cold snap can send prices soaring. Conversely, an unexpected decline in the price of competing fuels, such as oil, can cause industrial customers to use much less gas than expected and the price of natural gas can decline precipitously. Figure 1 shows monthly prices. The daily prices are even more volatile.

What do utilities do to insulate customers from this volatility?

Utilities buy gas in the off-season and store it for winter use The principal method is to buy gas in the off-season and store it for winter use. The principal reason that storage services are used is because the pipeline system in our part of the country was designed so that a stored gas inventory is required if the utility is to satisfy its customers’ total demand. The resulting price hedging impact is, therefore, more of an ancillary benefit from the use of storage rather than the primary reason for using it. If gas is put in storage in the summer and withdrawn in the winter, the cost of gas charged to consumers in the winter will be a blend of the current market price and the cost incurred when buying in the summer. This blending tends to have a limiting effect on the price volatility to some extent. It is far from perfect insulation, however. When natural gas prices rise or fall dramatically, consumers will still see noticeable changes in their gas rates. Since on any given day Wisconsin gas utilities can meet only a fraction of their gas demands with supplies from storage, they are always buying relatively large amounts of gas at market prices. Therefore, even if storage services are used to their maximum capacity, market price changes always filter through to the prices paid by the ultimate consumers if no other action is taken. Utilities use financial instruments The other action than can be taken to reduce price volatility is a relatively recent development in natural gas markets. Futures, options, and swap contracts for natural gas traded on the New York Mercantile Exchange provide a means to hedge natural gas prices. Proper use of these contracts allows the utilities to lock in prices or to put ceilings on prices, for example, which limits the volatility of gas costs that flow through to consumers. The goal of using financial instruments is generally to control price volatility, not to speculate on the future direction of energy prices or not even to reduce gas costs. The utility’s cost of administering its hedging program is passed on to consumers so that, over a long period of time, a hedged gas supply portfolio will tend to produce slightly higher gas prices than if the portfolio were not hedged. The prices will, on the other hand, be more stable and more predictable. Whether the increased cost justifies the reduced volatility is a matter of personal opinion. However, more of the Wisconsin gas utilities have decided to use this approach as energy prices have become more volatile since 2000.

What are interstate pipeline costs?

Interstate pipeline costs represent the space (capacity) on the pipes, that transport natural gas. Pipeline costs are much more stable than are commodity prices. The overall level of pipeline charges changes very little from year to year. Occasionally, the FERC sets new pipeline rates that must be flowed through to consumers, but in most years the pipeline rates are fairly constant.

Are pipeline rates constant from season to season?

Generally no. The PSC requires most of the state’s gas utilities to recover more of its charges for pipeline service in the winter than in the summer. Why does the Commission do this? Increased demand in the winter, not the summer, determines whether the utility must contract for new pipeline capacity. There is plenty of space available on the pipeline in the summer so that even if everyone installs natural gas fired grills for summer barbecues, the utility simply runs more gas through its space on the pipe. So customers who increase usage in the summer cause the utility to incur commodity costs, but not pipeline capacity costs.

How does increased winter usage affect pipeline capacity costs?

The same cannot be said of customers who increase their winter usage. If numerous customers convert from, say, fuel oil to natural gas for home heating, the utility must make sure that it has enough space on the pipeline to meet the increased demand. If it does not, it will have to arrange for more space on the pipe. Who should pay for the increased pipe capacity, the customers who installed gas grills for summer usage or the customers who installed gas furnaces? Those that installed the furnaces clearly caused the need for the new capacity, so from a cost-causer / cost-payer perspective, those customers should pay for that capacity. To link cost-causer with cost-payer, the PSC requires utilities to use a seasonal pricing approach to collect pipeline costs. The concept is shown in Figure 2 below. The winter period runs from November through either March or April, depending on the utility. The important point to note is that pipeline charges increase by about $0.10 per therm on November 1. This is a hefty increase for most consumers. This means that even if commodity costs are stable from October to November, gas bills are likely to rise noticeably once October ends. Figure 2

Are there other reasons that a natural rate changes?

Natural gas rates can change due to reasons that occur irregularly. For example, in recent years several Wisconsin utilities were required to pass back to customers a refund of pipeline costs. Other utilities might be allowed to or required to pass on to consumers slight surcharges or credits based on their performance under gas cost incentive mechanisms. It is difficult to know when and if these types of costs might be incurred. In any event, they tend to be quite small relative to the commodity, interstate pipeline, and distribution service costs.

What are local distribution service rates?

These rates reflect the utility’s cost of maintaining and operating its local system for distributing natural gas to homes and business. It is surprising to many consumers that the portion of the business fully regulated by the PSC, namely the basic distribution business, is usually not the culprit when it comes to significant natural gas price changes. These costs are, like interstate pipeline rates, fairly stable from year to year. Unlike interstate pipeline rates, however, local distribution rates do not vary by season. These rates change only when the PSC has a formal rate proceeding for the utility. In most cases, these rates are not changed more frequently than once every two years.

**There are many factors that cause natural gas price changes We hope that it has been clear that there are numerous forces acting on natural gas prices. Some are market forces. Others are institutional forces such regulatory decisions by the PSC or FERC. The combination of all these determines the price that Wisconsin consumers pay for natural gas service.

Deregulated Gas Savings

March 14, 2010

As reported by Energysop

Deregulation of utilities means that the historical monopolies granted to a few large utilities providing electricity, telephone and natural gas are eliminated. These companies will just operate the distribution systems, the wires and the pipes. Competitors then enter the market with different pricing and service offerings. With the onset of deregulation in all of these industries, it is possible for consumers to realize significant savings by shopping around for these commodities.

 Utility deregulation is complicated since there is a fixed and very expensive distribution system already in place – pipelines, power and phone lines. It’s just too expensive, disruptive and environmentally harmful to construct parallel distribution systems. This is different from deregulation of airlines or financial services where no such fixed infrastructure existed. As a result, only the commodity, gas, electricity or telecom, is deregulated.

Natural Gas Deregulation

Historically, consumers received supply and delivery of natural gas from a single company who had the monopoly franchise for the region in which they lived. These companies bought gas on the wholesale market and sold it to consumers in their jurisdictions according to regulated rates set by the local regulatory agency, an energy board or public service commission.

 Natural gas is being deregulated in many jurisdictions. Examples are, Ontario, Alberta, Maryland, California, Georgia and Pennsylvania. This means that a householder or business can buy gas directly from a supplier at a competitive price — not just from the gas utility. These utilities, however, continue to have the franchise to distribute gas and charge a regulated fee.

Deregulation separates the sale of the gas as a commodity from it’s distribution. The product is available at a competitive price and under competitive conditions but the delivery is a standard regulated charge. This would be similar to a situation where you might buy milk by phone, and it is delivered by a large courier service such as Federal Express. The milk is a commodity, and it would be priced differently between suppliers, but the supplier relies on a distribution system provided by Federal Express trucks. A portion of what you pay would be for the commodity (milk), and a portion for the distribution (Fed Ex). In the case of utilities, the distribution will remain regulated, but the commodity supply will be a free market.

 Experience in Other Jurisdictions

The U.S. initiated deregulation in the gas industry at the wholesale level in the mid 1980s which resulted in gas prices declining about 35 per cent for large commercial and industrial customers, according to a Harvard University study. Prices for residential consumers changed only slightly.

Agents, Brokers and Marketers (ABMs)

Consumers choosing to shop around for their natural gas supplies can benefit from the price swings and variations inherent in a competitive energy marketplace. But where do consumers go to buy natural gas? Deregulation has given rise to a number of sources of gas supply.

 First, you can continue to let your distributing utility purchase gas on your behalf and deliver it to you with no change in the process.

 Or you can look into purchasing it from an agent, broker or marketer. These are independent companies that either sell on behalf of gas producers or purchase supplies of gas and re-sell it to consumers. Securing a long term supply from one of these energy marketers when the gas prices are lower can result in significant savings over the term of your contract.

 Should you choose to buy from a gas marketer, nothing about your service will change. You will still get a bill from your distributing utility which will indicate a regulated Delivery Charge. This is about 1/3 of your bill and a Gas Supply Charge which is the remaining 2/3. The delivery charge will be kept by your distributing utility and the gas supply charge will be forwarded to the gas marketer or supplier you chose. Should you choose some value-added services offered by gas brokers, such as energy cost comparisons, rental gas equipment or an equipment service contract, these will also be added to your bill. If you switch to a gas marketer, there is no interruption of service nor any other additional fee charged.

 This cost split is a key point to remember when you are comparing costs or considering an appeal from one of the gas suppliers or marketers. You have no doubt received promotional materials from one of these either by phone, by mail or from someone knocking on your door. The suppliers, brokers and marketers are only dealing with 2/3 of your bill. The distribution charge, which is 1/3 of your bill, is fixed and regulated by regulatory boards. They have periodic hearings to evaluate and set this rate. The remaining 2/3 is variable depending on which supplier you choose. As a result, when a promotional message claims a 10% saving, it is referring to 10% of the 2/3.

 Take, as an example a fairly typical annual gas bill of $ 1,500. One third of that, $500, is a fixed distribution charge. The remainder, $1,000, is the gas supply charge. A supplier offering a 10% saving is offering a saving of $ 100, which is 10 % of the $ 1000 gas supply charge. The saving on the total energy bill is 6.7 %, ($100 saving on a $1,500 gas bill).

 Gas marketers offer varying contract terms and conditions. In general, however, you have two basic choices. You can sign on for a single or multi-year contract at a fixed price or you can choose a rebate option which means you pay the regulated price set by your distributing utility and will receive a rebate if your marketer can buy the supply for less than that price.

Our Perspective:

I found this article gave a good explanation of the deregulated natural gas opportunity. If your company is spending more than $3000 a month for natural gas, you should be looking at buying natural gas in the deregulated market. Our clients are saving a minimum of 10% to 15% by buying natural gas in the deregulated market.

Currently yor local provider is buying natural gas in the wholesale market and then selling it to their clients for retail prices. Should you qualify, we are able to put your company in a wholesale position and the savings will fall to your bottom line.

Hutchinson Business Solutions provides independent financial solutions in the dereglated energy market. We have been positioning our clients for savings in the deregulated energy market for over 10 years.

To find our more information, visit our website www.hutchinsonbusinesssolutions.com

or email george@hbsadvantage.com  You may also call 856-857-1230.

What is an “aggregator”?
An aggregator is a company or association that buys power at a wholesale price from power generating companies and passes the savings on to its customers. Because the aggregator is buying vary large amounts of power on behalf of all its customers, they can negotiate for the best rates on your behalf.

Does taking advantage of the deregulated electricity market require changes in wiring to my business?
None whatsoever. Your new agreement to buy electricity through an aggregator simply requires your local utility (the company that delivers power to your meter) to utilize electricity generated by the companies that sell power wholesale to the aggregator.

Can I take advantage of the deregulated electricity market in my home?
Not at this moment, in most cases. Aggregators need to acquire the bargaining power of larger electricity users to be able to negotiate favorably for their clients. At some time in the future, aggregators may turn to groups of homeowners.

Is there any service interuption when I change my electricity provider?
The change from buying power from your current provider to your new provider is “seamless”, in most cases simply requiring a reading of the meter at the time your new service takes effect. There is usually no need to replace the meter or otherwise interupt your power service. Your aggregator will take care of all the paperwork, contacting the various utility companies, etc.

Who do I call if the power is out?
Your local utility is responsible for delivering electricity to your business. In case of a storm-related or other outage, call your local utility just like you do now.

Will my local utility put me “at the back of the line” if I report an outage?
No, this is illegal. More importantly, in practical terms, most outages are not to just one address, but to an entire area or zone of their service grid. These repairs restore everybody’s service regardless of where they buy their electricity from.

How does the billing for my electric service work? How do I pay my bill?
You’ll still get just one bill. Whereas you currently typically receive just one bill to cover the generation, transmission, and delivery of power from one company, you now will receive one bill that shows the cost of all of these elements. In order to keep administration costs as low as possible and deliver power at the lowest cost to all customers, most aggregators require automated monthly payment of your bill, in the same safe and reliable manner as you may currently schedule your bank or credit card to automatically pay other regular bills for your business or home.

Who do I contact for questions about my bill?
For questions regarding your bill for electricity contact your aggregator. For questions regarding the delivery of your service such as outages, meter checks, etc., contact your local utility, which is responsible for delivering power (from whatever source) to your business.

Who is responsible for the safety and reliability of my service?
The delivery system is still the responsibility of your local utility and as such, its safety and reliability. The utility will maintain the lines and repair them if there is an outage or storm. The regulatory body overseeing utilities in
your state will help to ensure that the utility continues to provide a safe, reliable delivery system for your use.

Can I buy power from one specific power generating company?
Since saving money is most people’s primary reason for buying electricity through an aggregator, your energy may come from any number of different electricity generating companies at any given time, depending on price. Other options are usually available to purchase electricity solely from a “green” generator, such as solar and wind farms.

Do I have to make a long-term committment to a different electricity provider?
Avoid making long-term commitments with an aggregator or broker, at least initially. A safer option is to choose an aggregator who offers a no-commitment service so you can be satisfied that you are receiving the expected savings and service. If, for whatever reason, you are unsatisfied, you’ll have the option of returning to your previous electric supplier.

What reasons are there to stay with my current electricity company?
If you are a stockholder receiving dividends from your current provider (although the potential savings may cover much more than your current dividends), or if you are not concerned with the amount of money you spend for electricity.

How do I find a reliable aggregator to help cut my electricity bills?
Email George@hbsadvantage.com to learn more of how yo can save in the deregulated Market

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