Posted on Sun, Jan. 16, 2011

By Andrew Maykuth

Inquirer Staff Writer

Pearl Rosenbloom and her neighbors in South Jersey have been getting lots of sales calls lately encouraging them to switch from Public Service Electric & Gas Co. to alternative power suppliers.

The pitches are often long on enthusiasm, but short on facts.

“When you ask for details, they just say, ‘You’re going to save money!’ ” Rosenbloom said.

The Burlington County resident looks longingly across the Delaware River, where Peco Energy Co. customers are rapidly moving into a market-rate environment.

Pennsylvania residential customers have access to a wealth of comparative information on rates assembled by the Public Utility Commission or the state Office of the Consumer Advocate.

But in New Jersey, where suppliers are offering residential discounts of 12 percent and more, consumers are largely on their own when it comes to assessing the data.

“We don’t know what to do,” Rosenbloom said.

J. Gregory Reinert, the communications director of the New Jersey Board of Public Utilities, said there were too many offerings for Garden State regulators to manage the data on behalf of customers.

“We do not provide comparison data of third-party suppliers or utilities,” he said.

“Customers need to do comparison shopping by either calling or visiting the websites of each company to review the tariffs or promotions, and make their own comparisons and decisions,” Reinert said.

New Jersey’s approach stands in contrast to the model states lauded in a recent industry study of electricity deregulation. Advocates of market rates say competition helps suppress electrical costs by encouraging more efficiency and conservation.

Nat Treadway, the managing director of a Houston firm that conducts an annual assessment of restructured markets, in December singled out Pennsylvania’s system for praise.

In most deregulated states, including New Jersey and Pennsylvania, customers are free to choose the company that generates their electricity, which makes up the biggest part of their bill. Traditional utilities, such as PSE&G and Peco, are solely distributors of power and do not make money off power generation – even on the electricity they buy on behalf of customers who do not switch.

Treadway, managing partner of the Distributed Energy Financial Group, said the best markets for encouraging electrical choice were in Texas and New York.

By contrast, Treadway called New Jersey’s restructured residential market “marginal.”

Ronald M. Cerniglia, director of governmental and regulator affairs for Direct Energy Services L.L.C., a large electricity marketer operating in several states, called New Jersey’s marketplace “suboptimal.”

He said the best competitive markets set up rules that encourage alternative suppliers to do business while still providing traditional consumer protections.

Regulators in thriving markets also make efforts to educate customers. One way is to maintain websites with neutral cost comparisons.

The Pennsylvania PUC’s papowerswitch.com lists most current suppliers, and some of their offerings. The Texas and New York utility commissions operate sophisticated websites that allow consumers to search for competitive offers by zip code: powertochoose.org and newyorkpowertochoose.com.

The New Jersey BPU rolled out a website for power-shopping after it opened electricity markets to competition in 1999, part of a $13.5 million promotional effort.

But New Jersey’s rates were still rigidly structured, and residential suppliers stayed away. The BPU’s website was abandoned in 2003 and the domain name was taken over by a Spanish pornography site, according to the Newark Star-Ledger.

Only in the last year have alternative suppliers planted their flags in New Jersey’s residential markets. As of November, 98,700 customers out of New Jersey’s 3.3 million households had switched to alternative suppliers, up from a mere 213 households in 2009.

By comparison, Peco Energy Co. says 96,000 of its residential customers have switched suppliers, most in the two weeks since rate caps were lifted Jan. 1.

The BPU provides the names of suppliers on its website, but the list appears to be out of date. South Jersey Energy Co. is listed as a residential electrical supplier even though it has been “out of residential for a number of years,” according to Joanne Brigandi, a company spokeswoman.

And in some cases, it is difficult for New Jersey customers to locate even the most basic information from which they can make an informed choice.

PSE&G’s basic-generation service – the price to compare – is listed as 11.5 cents per kilowatt-hour on some alternative suppliers’ websites.

PSE&G spokeswoman Karen A. Johnson confirmed Friday that the utility’s price to compare is 11.5 cents per kilowatt-hour.

Several suppliers are offering discounts below either price. They are listed above.

Our Perspective:

Hutchinson Business Solutions has been providing deregulated energy management solutions to our business clients for over 10years. Although we currently do not serve the residential markets in deregulated states, I found it prudent to offer some insight to the many residential clients now seeking savings in the deregulated electric market.

Since NewJersey just introduced the opportunity to their residents in the spring of 2010 and Pennsylvania in January 2011, many people have jumped on the band wagon selling electric. 

We get several calls daily from 0ur clients asking questions about saving for their home electric. The first thing that I caution them is to make sure the price that is being presnted is fully loaded and contains all the factors that are included to make a cost to compare analysis. Does it include a 7% loss allowance (to deliver 100 kw of electric you must send 107 kw for there is a 7% is line loss in the delivery of the electricity)  and 7% sales tax. These factors are included in the PSEG and AC Electric price to compare.

The second thing we caution clients to look for is a fixed price. Natural gas prices are the lowest they have been in the last 3 to 4 years. Although they have spiked recently due to the winter cold, prices are still very attractive. Thirty % (30%) of the electric generated in the US is made with natural gas. Because of this, natural gas prices serve as a stong indicator used for electric market prices. By choosing a fixed price, you can lock your position for a 1 or 2 year period.

Variable pricing does not provide this opportunity and is therefore a more riskier decision at this time.

Proceed with caution and make sure to get all the facts before choosing a deregulated residential electric provider.

Read more: http://www.philly.com/inquirer/business/20110116_New_Jersey_consumers_perplexed_by_elecric-power_options.html?viewAll=y#ixzz1BFl4JZXL
Watch sports videos you won’t find anywhere else

By Andrew Maykuth

Inquirer Staff Writer

Posted Jan. 13, 2011

A coalition of electrical-power interests is encouraging New Jersey Gov. Christie to veto a controversial bill that would subsidize development of a Gloucester County power plant that they say would unsettle the region’s energy markets.

The bill’s sponsors said the legislation approved Tuesday by the New Jersey Legislature would lower energy rates. But opponents, including power generators such as Exelon Corp. and large industrial consumers, call it an anticompetitive sweetheart deal that will cost consumers in the long run.

“We cannot afford an energy surcharge to guarantee billions of dollars of revenue to a few select developers,” said George M. Waidelich, vice president of energy operations for Safeway Inc., which says it now spends about $2 million a year on electricity for its five Genuardi’s stores in South Jersey.

The measure would provide a guaranteed long-term income for developers of several large power plants. The legislation was known as the “LS Power Bill” because its initial aim was to provide guarantees for LS Power Development L.L.C. to build a giant natural-gas power plant in West Deptford, the hometown of state Senate President Stephen Sweeney (D., Gloucester).

Tom Hoatson, director of regulatory affairs for LS Power, said the guarantees were necessary to obtain financing to construct the 640-megawatt plant along the Delaware River, which would cost from $800 million to $1 billion.

Hoatson said the bill would provide the New Brunswick company “an opportunity to compete with other generators.” The plant would employ up to 500 people to build and about 25 people to operate.

Christie spokesman Michael Drewniak said the bill was under review. Legislative sources said the governor was expected to sign it because his office was consulted in drafting amendments that addressed some of the administration’s concerns.

In the arcane world of wholesale electrical markets, the New Jersey bill has attracted intense attention because its opponents say it would turn back the clock on years of efforts to open electrical-power markets to more competition.

But supporters of the legislation say those markets, which are managed by regional power-grid operator PJM Interconnection Inc., have failed to lower prices for N.J. residents.

And they say that many of the interests opposed to the N.J. legislation are incumbent power generators like Exelon Corp. and Public Service Enterprise Group of Newark, which stand to gain by keeping new power generators out of the market.

“I don’t think it’s a system that encourages building new generation to keep prices down,” said Stefanie Brand, the New Jersey Rate Counsel, the state’s consumer advocate.

“The market is not a true free market,” she said. “It’s a constructed market that was created by PJM, and as far as we’re concerned, it doesn’t work.”

N.J. officials complain that the Garden State has suffered more than its western neighbors because it has paid up to $1.9 billion a year in extra capacity and congestion charges that PJM imposes on power transmitted into the state.

Lee A. Solomon, a Christie appointee who is president of the N.J. Board of Public Utilities, told PJM in December that “it is incumbent upon New Jersey to promote new generation in locations where it is needed the most to ensure reliability and to control costs.”

Sweeney, whose West Deptford hometown would host the LS plant, introduced the legislation that would allow the board to sign long-term contracts with several power generators to provide up to 2,000 megawatts of electricity at guaranteed rates. If market rates fall below the threshold, N.J. ratepayers would pick up the tab.

“Consumers have been paying inflated capacity charges,” said Derek Roseman, Sweeney’s spokesman. “This is a chance to reverse that. How can that not be a good thing for consumers?”

The Compete Coalition, a Washington lobbying group that promotes open electrical markets, has appealed to Christie’s antitax sentiments by branding the bill the “Energy Tax of 2011.”

John E. Shelk, president of the Electric Power Supply Association, testified in December that the bill would “artificially depress” rates in the short term, but would discourage other generators from investing in the future.

Shelk said the bill likely would be challenged because it would interfere with federally sanctioned wholesale power markets.

Public Service Enterprise Group, the politically powerful Newark energy company that operates the PSE&G utility, announced its opposition to the measure last week.

Anne Hoskins, the company’s senior vice president for public affairs, said the state’s intervention in the past requiring utilities to enter into long-term supply contracts had “disastrous results.”

In the next six years, PSE&G will pay $1 billion for the remaining costs of the long-term contracts, she said. And Atlantic City Electric recently received approval to raise its customers’ bills 5 percent to recover the costs of its out-of-market contracts.

“Subsidies are a slippery slope,” she said, “and will drive away other nonsubsidized private investment in New Jersey.”


Published: Tuesday, December 14, 2010

By Brian McCullough; Journal Register News Service

The right to choose isn’t much good if it’s not used. That’s the message of Sonny Popowsky, Pennsylvania’s Consumer Advocate, and the state Public Utility Commission, who are urging electric users in the region to make an informed decision on whether they want to continue to receive electricity generated by PECO.

“What I hope is that people decide,” Popowsky said. “My hope is that people across Pennsylvania will know they have a choice and take the time to make it.”

Effective Jan. 1, consumers in southeast Pennsylvania can choose the company that generates their electricity. The choice comes as electric rate caps imposed on PECO are ending.

The caps are coming off four utilities in Pennsylvania, with PECO having the largest number of affected customers. They are the last four electric utilities in the state that had rate caps in effect.

Throughout much of last year, there were dire predictions of electric rates skyrocketing 30, 40 or 50 percent when the rate caps expired.

Now, however, with the recession and an increase in the supply of natural gas used by power generating stations, the increases are much more modest.

PECO is saying its rates for residential customers will increase 5 percent in January while rates for large industrial businesses will go up 7 percent. Small businesses — those that use less than 500 kilowatt hours per month — will actually see a decrease in PECO rates of about 5 percent, spokeswoman Cathy Engel said.

The key number for PECO residential customers to look at when considering a change is 9.92 cents, which is PECO’s price per kilowatt hour heading into the new year.

Residents are urged to visit the website established by the PUC specifically for the switch, www.PaPowerSwitch.com, to see what new suppliers have entered their area. Residents can shop by entering their ZIP codes. Frequently asked questions on picking an electricity supplier/

In the 19067 Yardley-Morrisville ZIP code, for instance, 17 suppliers are registered to sell electricity — all but one of which come in below PECO’s default price.

Generation suppliers registered in the Yardley area, for instance, are: BlueStar Energy, Champion Energy Services, Commerce Energy Inc., Con Ed Solutions, Direct Energy, Dominion Energy Solutions, Energy Cooperative Association of Pennsylvania, Energy Plus Holdings, Gateway Energy Services Corp., North American Power, Palmco Power Pa. LLC, Public Power LLC, Respond Power LLC, Spark Energy LP, Stream Energy Pennsylvania LLC, Verde Energy USA Inc., Viridian Energy and Washington Gas Energy Services.

Three of the providers — Blue Star, Commerce and the Energy Cooperative Association of Pennsylvania — advertise renewable energy.

According to the website, a residential customer using 700 kilowatt hours of electricity a month from PECO pays $69.30 a month. The lowest price listed on the Web site Monday came from Stream Energy, with a variable rate of 7.43 cents per kilowatt hour for a monthly bill of $52.01. The highest came from Commerce Energy, the renewable energy provider, with an average listed monthly bill of $77.35.

No Blacklist

One of the obstacles consumer advocates and regulators face in getting consumers to make the switch is a fear that doing so will mean a drop in service when there are outages or other service issues, said Rob Powelson, the former head of the Chester County Chamber of Business & Industry and now a PUC commissioner.

What consumers are choosing is the company that will generate the electricity. PECO will continue to deliver it and will continue to respond to emergencies with no regard to a customer’s selected generator, he and Engel noted.

PECO also will continue to deliver the bills to all electric customers in the region. The only difference will be on the line that lists the generator.

PECO will be the default provider of electricity to consumers in their region who do not shop.

“PECO does not care where you get your energy generation from,” said Powelson, a Kennett Square-area resident, noting that the Philadelphia-based utility is required to shop on the open market itself for the lowest prices. “PECO will still come out when there’s a storm.

“I hear people say all the time they’re going to be put on a blacklist if they switch,” Powelson said. “I can’t stress this enough: Customers are not going to offend PECO by picking another generation supplier.”

Engel agreed.

“It has no impact on us what supplier they choose,” the spokeswoman said. “We are an energy delivery company.”

She does urge consumers to keep in mind a few things as they shop, however, such as whether the prices being quoted are fixed or variable, and whether there are cancellation fees.

The Numbers

According to the PaPowerSwitch.com Web site, 659,187 electric customers across Pennsylvania have switched generation suppliers in recent years.

Since the rate caps expired in the PPL territory in central Pennsylvania a year ago, 400,000 of the 1.8 million PPL customers have switched, said PUC spokeswoman Denise McCracken. At that time, consumers were looking at rate increases of 30 percent, giving them more motivation to shop, she noted.

The changeover has been much slower in PECO’s territory to date, with a little more than 2,000 residential customers, or 0.2 percent, changing providers. That figure is probably attributable to the smaller increase in prices electric customers face this year, she said.

Overall, 20,860 PECO customers, or 1.3 percent of its total base, have switched, the bulk of which are businesses that use more electricity and are more affected by higher rates.

Powelson believes the pace of switching will pick up in the first quarter of next year, when the PUC “is optimistic” that 20 percent to 25 percent of PECO customers will choose to switch.

“I’d love to see 50 percent to 100 percent,” Powelson said. “Every year you choose your health care plan, you choose your cell phone provider, you choose your cable provider.

“Now, this is another choice you have.”

Whatever provider people choose, Powelson hopes they take advantage of PECO’s Smart Ideas program, which offers incentives to consumers to make their homes more energy efficient. Powelson said he has used it himself to reduce his energy bill.

“Customers now have options to save money on energy usage,” he said.

Humbled

December 8, 2010

I hope you don’t have trouble reading this entry. Recently I fell, separated my right shoulder and now I have to write left-handed. 

People who know me say my handwriting is terrible. (I thought you went to Catholic School, didn’t they teach you the Palmer Method)? 

You should see me trying to write and do everything left-handed. 

You never realize just how much we take the everyday things we do for granted until they take your rights (arm) away from you. It might be okay if I was left-handed….. 

But somehow I feel discombobulated. Everything has to be done is slow motion with my left hand. Go ahead try it! 

Try eating with a fork left-handed. 

Comb your hair or brush your teeth. 

I feel like I am going thru rehabilitation. Come on George, I know you can do it. 

How did I hurt my shoulder? Don’t even ask. I wish I could give you a great story. 

You should see what the other guy looked like. 

But no, it was humbling. 

I was actually trying to cross the street at night in front of my office. It is dark and as I was going across the street a car was coming from my right. My first thought was… they seem to be going a little fast. I started to take a couple of quick steps to get to the other side of the street. 

Little did I know that why I am looking to my right at the approaching car and breaking into a jog that a 

“Beware… Pedestrian Crossing” sign was right in front of me. 

What was that? 

Was my first thought, as I was tackled head on… 

glasses flying off my face…. 

I am falling and stumbling to get the first down (across the street and out of the car’s path). 

I throw my right arm out to catch my fall. And as soon as my right hand hit the street….. 

I felt and heard my right shoulder pop out of joint. 

Now I am lying in the middle of the street, (fortunately, the driver stopped and got out of the car) 

The owner of the pizza shop down the street, seeing the whole incident, came running over to help me. 

Are you all right? What happened? Let us help you up? 

I am half in shock…what and the heck hit me?……And in severe pain. 

My first response…… don’t touch me, I just thru out my shoulder

Looking back I can see the sign lying in the middle of the street and my body is locked into crippling position. 

I could not stand up; 

Dragging myself up to my office, (looking like the hunchback of Notre Dame), I yelled to my wife: 

Janet!!!!!! (In extreme pain) 

I threw my shoulder out….. I can’t even stand up…… I need a doctor. 

Seeing me she says, 

What happened?????  Did you get shot?” 

Thinking fast, she ran down the hall. (We happen to have a chiropractor in our building)

Dr Jon comes in, takes one look at me and says: 

Take George to the hospital. 

Did you ever notice that everything takes soooo much longer when you are in pain? 

We headed out to Virtua Hospital in Voorhees and let me tell you they did a great job. 

Kudos to my old classmate, Rich Miller, keep up the good work. 

I have a doctor, a doctor assistant and a nurse all pulling me in 3 different directions. Move a little more to the left, hold still, higher on your end…. but all of a sudden…. 

….Pop….my shoulder went back in. 

How do you feel sir? Are you still in pain? 

Anything has to be better than how I was feeling when I got here. 

What did you give me?  

Am I going to feel more pain later? 

What should I take if it starts to hurt later? 

Are you going to give me anything just in case it starts to hurt? 

So it goes, they put Humpty Dumpty back together again. 

For the next three weeks, I have my right arm in a sling……No Driving.

The doctor says there appears to be no ligament damage and I can start rehab on my right shoulder around the Christmas Holiday. 

Sounds like good news to me…. but how am I suppose to cut down my Christmas tree? 

JANET!!!!!!

Where’s The Bottom

November 12, 2010

Natural gas prices continue being very competitive. 

How low will they go? 

Hurricane season does not officially end until November 30th, however it is rare to see a tropical storm in the Gulf this late in the season. The 2010 Atlantic Hurricane season was very active this year, with 19 named storms. The last time I looked we were up to T for Toma. 

Here we are heading into the end of November and natural gas nymex prices are still under $4.00. 

Where is the bottom? 

Without a crystal ball, this ends up being a very difficult question to answer. 

When you look at the overall picture not much has changed, Storage levels are still at a 5-year high and holding. It has been like that for several years now.

 We do have the Marcellus gas in Western PA. Some geologists estimate that it could yield enough gas to supply the entire East Coast for 50 years.

 That must prove to be the major factor. It is the old supply demand scenario?

The bottom line states, that if your business is currently spending a minimum of $3000 a month and you are still with the local provider, you should be looking at buying natural gas from a 3rd party provider in the deregulated market.

Did you know that if you are a PSEG customer, you ended up paying 15% higher for natural gas over the last year?

How much savings would that have equated for your company?

With natural gas prices being so low we have also seen this translate into very competitive deregulated electric prices. We recently signed a client the other day and they will be saving 30% on their electric supply cost for the next 2 years.

I know that savings is a parity of how much you spend but let me ask again.

How much savings would that have equated for your company?

If you are currently spending over $3000 a month on electric and your company is still with the local provider, you should be looking at buying electric from a 3rd party provider in the deregulated market.

To find out more about this opportunity email george@hbsadvantage.com or feel free to call 856-857-1230.

Deflated

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.

 Kolb….Vick……….Vick…Kolb

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 george@hbsadvantage.com

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.

The deregulated utility market has presented a great opportunity for savings over the last year. For the first time in 3 to 4 years, market prices have been less than the providers’ prices, aiding in a windfall to those looking to save money on utilities.

 If you have been tracking natural gas prices, you would see that the market has dropped close to 20% since the end of June 2010.

 Natural Gas

With the steady fall of natural gas prices, HBS has been advising clients to float the market index position to take advantage of the current market prices. If you are a PSEG customer and chose to float the wholesale market over the past 12 months, you would have realized a 17% savings. Not bad!!!  South Jersey Gas clients would have saved 8%.

When speaking to our clients, we still offer an option to fix the price for a 12-month period, however it doesn’t make too much sense to fix a price that is actually higher than the price to compare that the clients have been paying over the last 12 months. Why is the price higher? Because the future market still shows that prices will go up.

Some clients may choose to fix the price for they want certainty in their cost. They do not want to be effected by market fluctuations. However if you lock the price, you are unable to change the price should the market continue to go down. By floating the market index, you can take advantage of the lower price and should the market turn and start to shoot up, you will have the option to lock in a price at a later option.

Electric

The electric market is directly affected by the natural gas market prices for 30% of electricity is generated by natural gas. So natural gas is commonly used as a market indicator. With the current fall of natural gas prices, electric prices continue to fall and have become even more competitive.

The electric market is completely different than the natural gas market. While natural gas prices change monthly with the local provider based on market conditions, the electric prices are fixed from June till May.

Every February, the state holds an auction for those selling electricity in New Jersey. The local providers buy electricity on the open market and blend the results with the electric it has purchased over the last 2 years. So the current market prices that the local providers charge are based on a blended price from purchasing electric over the last 3 years. They take these results and then present a proposal to the BPU (Board of Public Utilities), as to the summer rates (June till Sept) and winter rates (Oct to May) they wish to charge. Both the summer rates and winter rates have defined on-peak and off peak pricing.

As a result each account is charged differently based on their usage. A company with more off peak usage will actually be paying less than a company whose prime usage is during the daytime when on-peak charges are used.

Fixing your electric cost in the deregulated market offers a flat rate pricing no matter when you use it. This has offered a great savings opportunity due to the current market downturn. HBS clients are realizing saving from 10% to 20% on current flat rate pricing.

Should you like to know more about saving in the deregulated utility market, email george@hbsadvantage.com or call 856-857-1230.

By Andrew Maykuth

Inquirer Staff Writer

Brace yourself for power shopping – and we’re not talking about a marathon outing at the mall.

Nearly two dozen energy companies are scrambling to sign up Peco Energy Co.’s biggest, most lucrative customers – the commercial and industrial users – in preparation for electric deregulation at the end of this year.

About 110 customers of the Philadelphia utility attended a seminar Tuesday at the Union League to learn more about the implications of electric choice. The bottom line: Large customers should shop around for power, because their competitors are, too.

“This is a wonderful opportunity for you to save money,” James H. Cawley, chairman of the Pennsylvania Public Utility Commission, told the seminar, sponsored by one supplier, GDF Suez Energy Resources.

The PUC is promoting energy choice as an option for customers to fashion a deal specific to their needs. A school district, for example, might bargain for a lower price because its facilities are closed in the summer, when power costs more. A business promoting its green image might buy from renewable suppliers that generate from wind, solar, or hydroelectric plants.

“You have a choice to get your electricity from somebody else who can be much more attentive to your individual needs, your own risk tolerance, your own environmental desires,” Cawley said.

Under the Electricity Generation Choice and Competition Act, utilities hived off their power-generation units and will now make their money strictly by distributing power on their lines.

The utilities’ rates were capped at 1996 levels to allow them to ease the transition to competitive markets.

For Peco, the rate caps will be lifted at the end of this year. Customers who don’t want to shop around can stay with the utility’s “default rate.”

For large customers, Cawley said, the default rate is likely not the best deal because it contains a significant “risk premium” for Peco to lock in prices now. Alternative suppliers are more nimble in fashioning rates to suit the needs of specific users.

“Don’t sit there and take the default rates,” he said, without endorsing any specific alternative supplier. “You’re silly to do that.”

Cawley said many customers were still confused over the roles played by the traditional utility that distributes power and those companies that generate it. Peco, as a distribution company, will still provide customer service and billing for most users.

“People don’t understand this distinction between distribution and generation,” he said. “Your electric-distribution company does not care if you shop. . . . In fact, they’d like you to shop.”

Since the rate caps came off on Jan. 1 for customers of PPL Electric Utilities, the Allentown company reported that 32 percent of its total customers have switched to alternative suppliers, according to the PUC.

But nearly 80 percent of its large commercial and industrial customers have switched. All told, 75 percent of PPL’s load – the number of kilowatt hours transmitted through its wires – is now supplied by alternative companies.

Marketing efforts aimed at Peco’s residential customers are not expected to materialize until late in the year – and officials expect only a small percentage of customers will be inclined to switch.

The reason: Though PPL’s default rate went up more than 30 percent this year, Peco’s is expected to increase only about 10 percent from current rates, Peco president Denis O’Brien said in a recent interview.

But commercial and industrial customers – who represent about 10 percent of Peco’s 1.6 million customers – are a different story.

Even a small percentage of savings is attractive to a big customer whose annual electric bill might total millions of dollars.

“The larger customers are keyed into this because it’s such a big part of their costs,” said Tom Petrella, regional sales manager for Hess Energy Marketing, which also had a Center City educational seminar Tuesday.

Many of the 21 suppliers registered with the PUC to supply electricity to large Peco customers are the marketing arms of other utilities with familiar names: Con Edison Solutions, First Energy Solutions, UGI Energy Services, and Allegheny Energy Supply Co.

Exelon Energy Co. is among the competitors selling power directly to Peco customers – both companies are owned by Exelon Corp.

Some suppliers have adopted more public marketing campaigns: PPL EnergyPlus, a sister company of PPL Electric, bought the naming rights to the new professional soccer stadium in Chester this year to help raise its profile.

GDF Suez, the company that held the Union League seminar Tuesday, bills itself as the “biggest company you’ve never heard of.”

The $109 billion French company is the world’s largest utility, has 200,000 employees, according to Forbes magazine, and is among the largest suppliers of power in the United States.

Like many suppliers, it has opened an office in the Philadelphia area.

Our Perspective:

Deregulation is about to begin in Jan 2011 for customers in the Peco territory. If you already have not started looking at the deregulated savings opportunity, now is a great time to start.

Electric commodity prices are very competitve offerring great opportunities to fix your supply price and save on your purchasing of electric for the next 12 to 24 months.

Hutchinson Business Solutions (HBS) is an independent deregulated energy consultant. We have been providing deregulated savings to our clients for over 10 years.  HBS has strategic partnerships with all the major providers currently marketing to the PA electric market.

You may ask, why should we use an independent consultant when we can deal with the energy companies directly.  The value we bring is that we are able to shop the entire market, offering an apple to apples comparison of what your current price to compare is from your local provider vs the deregulated providers.

You must be careful when comparing prices; for not every providers are including all the cost to make a correct comparison.

When speaking to the various deregulated, you must ask if the  prices are fully loaded.

In order to deliver 100,000 kwh of electric, a provider must send 107,000 kwh of electric due to the loss in delivering the electric. This cost is included in your PECO / PPL price to compare. You must verify if this cost is also included in the deregulated provider price.

Also the Peco price to compare also includes PA gross receipt tax. This also must be included.

As you can see, there are several factors that must be included to make an objective decision as to the best value. This is the expertise that HBS brings to our clients. We allow our clients to do what they do best (run the day to day business), while we become your legs and do the project for you.

There are no additional fees for our services. We receive a small residual from our strategic deregulated providers during the term of the contract. All the providers choose to use independent energy consultants; for it allows them to be more competitive in the market prices. We are not paid a salary, do not share in any of their benefits. That way, you will find that many times our prices are more competitve.  We add the benefit of  being able to define which providers are the most competitive for your unique market usage and will show you the variances in pricing.

Should you like to know more about saving in the deregulated utility market email george@hbsadvantage.com
Read more: http://www.philly.com/philly/business/homepage/20100616_Peco_Energy_customers_at_seminar_on_electrical_deregulation.html#ixzz0wVg1QQ7q
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What is Electric Choice

August 6, 2010

As reported by Pennsylvania PUC

General
   
Q: What exactly am I shopping for?
A: You are shopping for the company that supplies your electric generation. There are three parts to electric service: generation, transmission and distribution. Generation is the production of electricity. Transmission is the movement of that electricity from where it is produced to a local distribution system. Distribution is the delivery of purchased power to the consumer. 
Q: Will I be charged tax on the generation portion of the bill?
A: Yes. Taxes are included in the rate charged by a supplier. Most of the same taxes that the EDC was required to pay will be charged to the supplier. However, they may not be itemized like they were on your bill before you chose a supplier. 
Q: What is an aggregator?
A: A buying group that negotiates lower electricity prices for customers who have authorized them to act on their behalf. 
Q: How do Electric Generation Suppliers (EGSs) set their prices?
A: EGSs consider market conditions, the amount of power customers use, fuel type, terms of their agreement and other services they may provide. These prices are not subject to PUC review. If you sign up, your EGS must notify you before they make any changes to the terms of your contract. 
Q: Will my EDC charge me more for “other services” if I change suppliers?
A: In most cases, your EDC cannot increase any charges based simply on your selection of an alternative supplier. However, if you currently benefit from a special discounted rate (for instance, for having all-electric heat) and you select a new generation supplier, you may lose your discount on other parts of your electric service (including distribution and transmission charges). In this case, shopping for another supplier may end up costing you more money, even if the cost of generation is lower. 
Q: Q & A on Electricity Pricing, Electric Generation Supply, Energy Efficiency & Conservation for the Commission
A: The following questions and answers tell you how you can reduce your electricity use when demand for electricity is the greatest, often during hot summer days. This is important for two reasons. First, cutting back on your electric use will reduce your electric bill. And, second, by controlling your energy use, you can help ensure there is enough electricity for all consumers. Click here.

Energy Conservation and Energy Efficiency Information Sources. 

What You Need to Know Before Shopping for a Supplier
   
Q: What is the ‘price to compare,’ and where can I find it?
A: This is the price per kilowatt-hour (kWh) a consumer uses to compare prices and potential savings among generation suppliers (also formerly known as the shopping credit). You can find your price to compare on your electric bill. If you have questions, contact your EDC. 
Q: Where can I get information on supplier prices?
A: Each supplier’s price can be different. You can get pricing information by contacting the suppliers serving your area or click here for pricing information resources. 
Q: How will I know that a supplier is reliable?
A: Only electric generation suppliers that are licensed by the Public Utility Commission (PUC) can do business in Pennsylvania. If they are not licensed in Pennsylvania, do not sign up for service from them. 
Q: If I sign up with a new supplier, when will the switch to a new supplier start?
A: It will depend on when you sign up with a new supplier. Generally, it will take about 45 days from the time you notify your new supplier for the actual switch to occur. 
Q: Will I receive two electric bills each month if I choose a new supplier?
A: In most cases, you should be able to receive a single monthly bill from your current electric distribution company. However, some suppliers might want to bill you separately. In this case, you would receive two bills, one from the EDC and one from the supplier. 
Q: Once I select a supplier, what happens next?
A: 1) Your new supplier will notify your EDC of the change.
2) Your EDC will contact you by mail to make sure you selected this company to be your electric generation supplier. 
Q: Are there any penalties for changing suppliers?
A: If you already have an agreement with an electric generation supplier and you want to switch to a different supplier, you should carefully review your agreement with your current supplier to see if there are any penalties for early cancellation. If you are not sure, you should call your current supplier. The new supplier that you choose will not charge a fee to switch to them. If you choose to return to your Electric Distribution Company (EDC), the EDC will not charge you a fee to do so. However, if you switch back to the EDC, you may have to stay with the EDC for at least 12 months. Ask your EDC if they have a 12-month stay rule. 
Figuring Your Savings
   
Q: How do I figure my savings?
A: To estimate potential monthly savings, subtract the supplier’s price from the price to compare from your EDC. Then, multiply the difference by the average number of kilowatt-hours (kWh) you use in a month. Click here to use the online calculator to determine potential savings.

Additionally, when comparing prices, it’s also important to consider the effect of different electric programs to which you may subscribe. If a supplier offers a discount, find out what part of your bill that discount applies. For example, does it apply to your entire bill or just the generation charge? If you are a low-income customer and want to know whether you qualify for certain low-income assistance programs that help pay part of your electric bill, click here

Electric Choice Program Savings
   
Q: How much money will I save in the Electric Choice program?
A: Your potential savings will vary. The amount you might save depends on several factors, such as how much you pay now for electric generation; how much electricity you use; and the price offered by an electric generation supplier. 
Q: Who do I contact if I want to discontinue service?
A: If your EDC sends you one bill for all of your charges, you should call them. If you receive a separate bill for generation, you may have to call either or both companies. 
Q: What happens if I move outside my current EDC’s service territory?
A: If you are moving out of your current EDC’s territory, your EGS enrollment does not go with you. You need to contact your new EDC and sign up for EDC service with them. You can ask the EDC for a list of suppliers serving in their territory. Your former supplier may not be providing service in that territory, so you will need to check the list, select a supplier and contact the supplier to enroll. 
Service
   
Q: Will I have reliable service?
A: Yes. You can depend on the same reliable service from your local electric distribution company whether or not you choose a new supplier. 
Q: If one company generates my electricity and another provides the rest of my electric service, who will I call about outages or repairs?
A: You will still call your local electric distribution company about power outages and repairs. If you have questions about electric generation billing or other issues related to generation, call your new supplier. 
Q: Who do I contact if I have billing questions?
A: If your EDC sends you one bill for all of your charges, you should call them. If you receive a separate bill for generation, you may have to call either or both companies. 
Q: Who do I contact if I want to discontinue service?
A: You should call your EDC. You should also notify your supplier of the fact that you are stopping service. If you are moving within your current EDC’s service territory, you can arrange for new service at the same time and you should be able to keep the same supplier. 
Slamming
   
Q: What is slamming and how can I prevent being slammed?
A: Slamming is the unauthorized transfer of utility services without the customer’s permission. To prevent slamming, and regardless of whether you made an agreement with a supplier on the telephone, or over the Internet, your chosen supplier must send you the agreement in writing in an email, U.S. mail or in-person hand-delivery. You have 3 days to accept or decline the agreement upon its receipt. In addition, when your EDC receives notification of a supplier change, it will send you a confirmation letter. You must respond to the EDC within 10 days if the information is incorrect. During that 10-day period if you notify your EDC you did not want the change of supplier, the supplier change will be cancelled and your account will be restored without penalty. 
Metering
   
Q: Can I be in the Electric Choice Program and still benefit from a time of day meter (off-peak meter)?
A: Maybe. You must be sure to compare the rates you are being charged for off-peak service with the rate you will be charged from a competitive supplier. Some suppliers may offer lower or higher prices at different times of the day. For instance, you may be able to receive a discount for using your clothes dryer at night instead of the day, when electric use is higher. Ask the supplier if you need a special meter to take advantage of time-of-day use options. 
Q: Will I need a special meter if I choose a new supplier?
A: Not if you are a residential customer. You might, however, have an opportunity to choose to have an advanced meter. These meters allow you to record your electric use during specific time periods. If a supplier offers this service, advanced metering could allow you to benefit from special time-of-day discounts or other potential ways to save money and reduce energy consumption. You should ask a supplier, however, whether there is a charge for the advanced meter. 
Q: Will my EDC continue to be responsible for reading and maintaining my meter?
A: In most cases, yes. 
Payment Assistance Programs
   
Q: What energy assistance is available to customers?
A: LIHEAP/CRISIS program payments will cover supplier charges. However, before LIHEAP/CRISIS payments can be made to any qualified service provider, the provider must have an agreement with the PA Department of Welfare (DPW). As of June 11, 1998, no suppliers have agreements with the DPW and as a result they cannot receive program money. If you are part of the Competitive Discount Services Program (CDP), the EDC will apply the LIHEAP grant to your entire bill.

The EDCs have agreements with the DPW, but they are not permitted to provide program money to any suppliers. As a result, you may find that you have a credit with the EDC yet still owe the supplier money. 

Stranded Costs
   
Q: What are the “competitive transition charges”(also known as stranded costs) charges on my bill?
A: Stranded costs are expenses for utility plants and equipment that were built before deregulation. These costs cannot otherwise be recovered in a competitive electric market. The PUC allows companies to recover some but not all of these costs through a transition charge on electric customers’ bills. These costs are now itemized on your electric bill; however, they are not new charges. Most of these costs were part of your rates under regulation. The CTC will be phased out over time. 
Q: Do we have to pay stranded costs if we are buying generation from a supplier?
A: Yes. Stranded costs have nothing to do with who provides your generation service. All customers who receive electricity over the EDC’s transmission and distribution system pay stranded costs. In some EDC territories, these charges will disappear beginning in 2002. 
Renewable Energy
   
Q: Which suppliers use renewable energy?
A: Some suppliers use renewable resources to generate electricity by a mix of sources, or only one source, such as wind. Suppliers should be able to tell you the percent of renewable resources that is part of their generation. You may find out more about renewable resources from the Clean Air Council by calling 215-567-4004, ext. 236.

Below are press releases regarding the Pennsylvania Public Utility Commission’s involvement in encouraging renewable energy in Pennsylvania:

PA PUC Chairman Glen Thomas Says PA State Government Leads by Example by Purchasing Green Energy, Shopping for Power

PA PUC Chairman Glen Thomas Dedicates Wind Farms that Secure PA’s Status as East Coast Leader for Wind Energy, National Leader for Electric Choice

PA PUC Commissioner Fitzpatrick Unveils Largest Solar Electric Power Plant in Western PA that Further Secures PA’s Leadership for Green Energy 

Competitive Default Service (CDS) Program
   
Q: What is the Competitive Default Services Program?
A: A program created from the electric restructuring settlements that require 20% of an EDC’s residential customers – determined by random selection, including low-income and inability-to-pay customers, and regardless of whether such customers are obtaining generation service from an EGS – to be assigned to a default supplier other than the EDC. The supplier is to be selected on the basis of a Commission-approved energy and capacity market price bidding process. Currently, four (4) EDCs have programs, but none have been successfully implemented due to a lack of interest on the part of EGSs. PECO Energy, working with New Power and Green Mountain Energy, has developed a program in southeastern Pennsylvania similar to CDS. It involves non-shoppers being assigned to a new supplier for service. The supplier is not a default supplier – customers can return to PECO’s regulated generation service. In the program, suppliers provide 2% renewable energy to customers in the first year, and .5% thereafter.

See the following Dockets for more information about the CDS programs by the EDCs:

PECO – CDS BID – New Power

Allegheny Power CDS Order

Allegheny Power Amended Petition for CDS Program 2001

GPU CDS Petition – GPUE Request to Withdraw Contested Pleading 

Fuel Source Information and Power Plant Emissions
   
Q: How can I find out information about air emissions from power plants?
A: E-Grid, a database developed by U.S. Environmental Protection Agency, integrates more than 20 federal databases, provides power plant emissions data for Nitrogen Oxide (NOx – smog contributor and acid rain precursor), Sulfur Dioxide (SO2,- acid rain precursor), Particulate Matter (PM – responsible for respiratory problems, haze issues) Carbon Dioxide (CO2,- global warming gas), and Mercury (Hg- water toxicity). The database can be used for: fuel source information, analysis of changing power markets, development of Renewable Portfolio Standards, utility emission and emissions standards. Download E-GRID at www.epa.gov/airmarkets/egrid

 As reported by Pennsylvania PUC

Electric customers in Pennsylvania were among the very first in the United States to have the ability to choose the company that supplies their electricity. You may be able to choose your electric generation supplier (EGS) in areas where competitive electricity supplies are being offered. Consumers may be able to secure supply rates below the prices offered by their utility. Generation supply costs comprise the majority of the average electric bill. Consumers are encouraged to proactively engage competitive suppliers – whose price is unregulated by the Pennsylvania Public Utility Commission (PUC) – to obtain pricing information for the generation portion of their bill. Competitive offers may not be available in all areas.

The PUC has engaged consumer advocates and industry experts in efforts to mitigate any price increases in future electric generation prices. The PUC has been working to educate consumers; develop strategies to remove barriers for suppliers providing competitive electric service; approve phase-in or pre-payment plans and direct all utilities to file such programs if electric rates increase by more than 25 percent; update low-income programs that provide customer assistance; and implement default service pricing that reflects the least cost to consumers over the long term. We also are continuing to implement reasonable, cost-effective programs that consumers and companies can implement to conserve energy or use it more efficiently.

Why are there rate caps, and why are they expiring?

Under the 1997 Electricity Generation Choice and Competition Act, electric rates – which are comprised of generation, transmission, and distribution – were capped to ease the transition to competitive markets.

The 1997 law allowed residential customers to have direct access to and purchase power from independent EGSs, while still having their electricity physically delivered by electric distribution companies (EDCs) regulated by the PUC. The law also permitted the EDCs to recover “stranded costs.” Stranded costs include investments in infrastructure made before the law was passed that may have become uneconomic and unrecoverable in a competitive environment. With limited exceptions, once rate caps expire, the companies can no longer collect for stranded costs.

In exchange for the recovery of stranded costs, generation, transmission and distribution rates were capped at 1996 levels. The caps on transmission and distribution rates all have expired. After litigated proceedings before the PUC, the generation rates were extended for many of the electric companies. As determined by those proceedings, all utility rate caps will expire by Jan. 1, 2011.

 

Caps 

Company

 

 

Generation Rate Cap Status

 

 

% of PA Ratepayers

 

 

Citizens Electric Co.

 

 

Expired

 

 

0.1

 

 

Duquesne Light Co.

 

 

Expired

 

 

10.6

 

 

Pennsylvania Power Co.

 

 

Expired

 

 

2.8

 

 

Pike County Light & Power Co.

 

 

Expired

 

 

0.1

 

 

UGI Utilities Inc.

 

 

Expired

 

 

1.1

 

 

Wellsboro Electric Co.

 

 

Expired

 

 

0.1

 

 

PPL Electric Utilities Inc.

 

 

Expired

 

 

24.6

 

 

Metropolitan-Edison Co.

 

 

Dec. 31, 2010

 

 

9.5

 

 

Pennsylvania Electric Co.

 

 

Dec. 31, 2010

 

 

10.6

 

 

PECO Energy Co.

 

 

Dec. 31, 2010

 

 

27.8

 

 

West Penn Power Co.

 

 

Dec. 31, 2010

 

 

12.7

 

 

 
 

What will happen once the generation rate caps expire?

The PUC expects that customers may see an increase in their bills after the expiration of rate caps. While Pennsylvania consumers’ rates have been capped, the market prices for electricity have risen. The magnitude of those increases will depend upon market prices when the EDC acquires its power.

Do I have to pay what the EDC is charging for electric generation (default service)?

Customers do not have to pay the EDC prices. They will have the ability to choose between an EDC and competitive supply prices for the generation portion of the bill. An EGS may be able to offer a better price for the generation. Customers will be able to compare the EDC price to a competitive supplier price to find the best option.

The amount you might save depends on issues such as:

• How much you pay now for electric generation supply;

• How much electricity you use;

• How market prices change in the future;

• What products and service are included in the EGS price such as renewable energy produces or other demand side and conservation services; and

• The price offered by the suppliers serving your area.

Who can take part in Electric Choice?

Every electric customer has the option to take part in electric choice, pending the availability of competitive suppliers in the service territory. As of January 2009, the Commission licensed more than 45 EGSs. While the Commission may license an EGS, it cannot force the EGS to offer services.

Can I save money by choosing a competitive supplier?

In the territories where rate caps already have expired, an increase in the number of EGSs offering services to residential customers has occurred. In some areas, the EGSs rate is as much as 10 percent cheaper than the default service price offered by the utility. An EGS may be willing to negotiate on price or other services to entice you into switching suppliers. The Office of Consumer Advocate offers consumers a direct comparison of the utility prices versus the supplier price. You can view the “Price to Compare” at http://www.oca.state.pa.us.

Remember, regardless of who generates your electricity, you will still continue to call your EDC for emergency services and questions regarding your residential service including outages. The quality, reliability, and maintenance of your electric service should not change as it is still monitored by the Commission. However, if you have a question about your generation charges you should first call your EGS.

If I choose a new EGS, can I change my mind and choose another EGS?

Yes. However, you should carefully check the terms of the agreement with the EGS, especially for length of contract and any penalty clauses.

I participated in a pre-pay program with my utility, but would like to choose another supplier. What happens to my money?

The money that you deposited in a pre-pay plan and any interest will be applied to your account, no matter who supplies your electricity.

For further information, contact the Public Utility Commission:

Call

1-800-692-7380

For people with speech or hearing loss, dial 7-1-1 (Telecommunications Relay Service)

Write

PA Public Utility Commission

Bureau of Consumer Services

P.O. Box 3265

Harrisburg, PA 17105-3265

Visit our website

January 2010