As reported in NJ SpotLight By Tom Johnson, February 8, 2013 in Energy & Environment

The state yesterday announced the results of its annual electricity auction, a process used partly to determine utility bill prices, and the outcome was decidedly mixed in a market some thought would deliver more savings to consumers.

At a time when natural-gas prices are near historic lows, the auction yielded savings for residential and small commercial customers for three of New Jersey’s four electric utilities, with prices dropping by 3 percent to as much as 5.4 percent, effective June 1. It is the fourth year prices have dropped for residents and small businesses.

That’s the good news.

But for larger commercial and industrial customers, prices basically doubled for the electricity they will need, according to a consultant for the state Board of Utilities, which conducted the auction over the past few days. For both residents and larger customers, any increases apply only to the portion of the bill covering the cost of generating electricity, which accounts for about two-thirds of the cost paid by ratepayers.

The contrast in auction results reflects changes in the energy market since the state deregulated its electric monopolies in 1999, and explains partly why even with the steep drop in the fuel that sets the price for electricity, consumers in New Jersey still pay some of the highest energy bills in the nation.

Here’s why:

The BPU no longer controls the price of producing the electricity consumers get from suppliers; the federal government decides how much utilities will earn on transmission projects they undertake; and the PJM Interconnection, the regional operator of the nation’s largest power grid, regulates how much suppliers will earn for making sure the lights don’t go out. On top of all that, the state’s efforts to promote solar energy also are boosting costs, as the BPU conceded in a press release announcing the results of the auction.

The state blamed the surprising large increase for industrial customers on a rise in capacity payments to power suppliers, which ensure there is enough electricity in reserve to maintain reliability on the power grid. Those capacity payments jumped by 65 percent from the prior year, according to the BPU.

That was of little comfort to business lobbyists.

“That’s an awful large increase,’’ said Hal Bozarth, executive director of the Chemistry Industry Council of New Jersey. “It’s a clear signal to me the auction system is broken in many places.’’

The vast majority of industrial and commercial customers, however, have contracts with so-called third-party suppliers, which are not affected by the jump in prices in the most recent auction, BPU officials noted.

The doubling of prices to industrial customers only applies to the relatively few establishments that have not switched from their incumbent utility.

“It’s disturbing,’’ said Stefanie Brand, director of the New Jersey Division of Rate Counsel. “It’s definitely going to have an impact on them.’’

Other factors contributed to the mixed results in the most recent auction.

For Public Service Electric & Gas, the state’s largest utility with more than 2 million customers, more than the three other utilities combined—prices for residential and small-business customers were essentially flat.

Its customers will see their monthly bills rise by 6 cents a month, an increase largely attributed to the billions of dollars the company is investing in new transmission projects ordered by the regional grid operator and the Federal Energy Regulatory Commission. Those projects could lower electric bills in the long run by easing congestion on the power grid, which spikes electricity costs, and bringing more power into the capacity into the state, according to PSE&G spokeswoman Karen Johnson.

The state, however, has contested many of the incentives handed out by FERC, which has rewarded PSE&G with much higher rates of return on a handful of transmission projects, much more than the utility receives for maintaining its distribution lines, which deliver power from substations to homes and businesses.

“We’re not saying we don’t need transmission,’’ Brand said. “But they can earn a fair return on them without earning excessive returns.’’

The price of electricity per kilowatt hour for PSE&G customers in this year’s auction was 9.218 cents per kilowatt hour, almost a penny more than the prior year, Brand said. “Some of these numbers are moving in the wrong direction,’’ she said.

The state is also trying to address the rising costs of capacity payments by giving subsidies to new power-plant developers, a controversial strategy under attack from both incumbent power suppliers and the PJM.

Nonetheless, three new power plants, one without any state subsidies, are due to begin supplying power in 2015 — too late, however, to drive down costs for this year and next.

Citing the increase in capacity costs, Brand said the auction results show “graphically when efforts have been made to increase investment in new generation and why residents will benefit from it.’’

BPU President Bob Hanna, in a conference call with reporters to discuss the auction results, said it is very hard to predict what is going to happen with natural-gas prices, the main driver in setting electricity prices.

“For now, I see a period of stability,’’ he said.

And for now, some consumers will see a drop in bills. According to the BPU, customers of Atlantic City Electric will see their monthly bills drop by 5.4 percent, or $6.42 cents a month; for Jersey Central Power & Light customers, there will be a decline of 3 percent, or $2.91 per month; and Rockland Electric customers will see their bills dip 5.3 percent, or $6.74 monthly.

For more information call 856-857-1230 or email george@hbsadvantage.com

Hutchinson Business Solutions………Smart Solutions for Smart Business

Advertisements

As reported by Save on Energy.com

New Jersey

Electric:

New Jersey opened its electricity industry to competition in 1999. Each of the four electric utilities (PSE&G, Jersey Central Power & Light, Atlantic City Electric and Rockland Electric) now offer customers the chance to save money by shopping for the supply portion of their electric bill.

The utilities sold off their power plants, and now only own the transmission and distribution wires, while also providing “backstop” power to customers who do not shop for electricity. With the move to competition, New Jersey utilities have separated their service into two parts:

• Regulated distribution of power, which is still only provided by the utility, and     • Supply of the electric commodity, which is open to competition.

Customers can choose to receive their electric supply from their utility, or an alternate energy provider.

Customers who do not choose an alternative energy provider are served on each utility’s Basic Generation Service (BGS). The price for Basic Generation Service is determined annually through auctions held by the utilities.

For large customers above 750 kW, called the Commercial and Industrial Energy Pricing or CIEP class, the BGS price is set at hourly prices in the wholesale PJM market. These prices can be extremely volatile, so most large customers choose an alternate (or third-party) energy provider for price stability.

Customers under 750 kW are known as the BGS Fixed Pricing Class, and receive a flat, annual rate from the auction, although it may be seasonally adjusted.

Customers who choose an alternate energy provider still have their power delivered to them by their local utility, and contact their utility for all outage reporting. Customers can choose to receive either a single bill from their utility for their delivery service and energy supply service, or can receive two bills, one from each company.

Our Perspective:

Natural gas prices are near a 10 year low.  Because 30% of electricity is generated with natural gas  we have seen very competitive in this area also.

Deregulation gives the consumer a choice to buy their energy supply on the open market at wholesale prices as oppose to buying energy from the local provider at default prices that are normally higher. If you are not currently buying energy thru a 3rd party provider, it is something you should take the time to look at. Businesses and now residential clients are finding substantial savings by fixing the cost of their electric and natural gas supply cost.

 

To learn more email george@hbsadvantage.com

 

Tonight’s the Night

November 21, 2011

Tonight’s the night…..

 

Hurricane Swartz makes his long range winter forecast…

 

 

 

You know the guy with the bowtie?

 

 

How cold is it going to be?

 

How much snow will we get?

 

 

Remember last year?

 

We had that big snowstorm right around Thanksgiving…

 

 

What’s going on with this weather?

 

Here it is mid-November…..

 

Janet and I just got our winter clothes out

 

 

 

Dealing in the energy market

 

The one constant we discuss is temperature

 

 

Back in September

 

We were getting reports saying

 

 

 

The long range forecast calls for an exceptionally cold November

 

 

When will that start……

 

 

November 30th

 

 

 

Those statements kept pushing natural gas prices up

 

 

We held firm….

 

 

We waited….

 

 

We’ll see….

 

 

Here it is mid-November and temperatures are still in the 60s

 

Natural gas prices keep dropping

 

 

A whole market opportunity has opened up

 

 

With prices so low

 

We start to measure risk

 

 

How much lower can prices go?

 

 

 

Don’t you love this kind of stuff?

 

 

 

 

Can natural gas prices go lower?

 

 

Yes!!!

 

But there is more upside risk

 

 

 

With prices being sooooo low,

 

 

 

One cold snap and …

 

 

The market price can jump up fast…

 

 

 

It’s called the whiplash effect

 

 

 

Prices always go up faster…

 

 

And then they take their good old time coming back down

 

 

 

Now here’s my shameless HBS plug

 

 

For those businesses still buying natural gas from their local provider

 

This is a great time to lock into a very competitive fixed price contract

 

 

 

There we go….

 

I said it

 

 

Now the disclaimer…

 

 

Some circumstances may not allow you to qualify

 

            Your monthly usage may be too small

 

                                          or

           

            We find stop service notices on your bill

 

 

 

 

 

Pick it up Hutch

 

 

Let’s get back on topic

 

 

Ohhhhh…..OK

 

 

 

So……..

 

Hurricane….

 

 

What will you say?

 

 

How cold will it be?

 

 

How much snow will we get?

 

 

 

I just bought a new snow shovel last year

 

 

I’ll be ready

 

 

 

PS: This was written on Wednesday. If you want to know what Hurricane said, you will have to go online and Google it.

Dave Gardner
Published: April 7, 2010

Age-old questions about the proper role of government are lighting up Harrisburg as the state debates its role in the deregulated market for electricity.

Pennsylvania House Bill 1909, introduced by State Rep. Camille “Bud” George (D-Clearfield), seeks to create an independent Commonwealth Energy Procurement and Development Agency to purchase and sell electricity.

Supporters claim the process would lower rates for electricity and spur development of new generation sources within the state. Opponents charge that Harrisburg has no business becoming directly involved with electric generation.

“What we are proposing is necessary to create real price competition and to build more generation capacity through large contracts,” says George, who has been a vocal opponent of electric price deregulation. “Regional electric pricing is now a reality for consumers and business, yet all of the power comes off the PJM grid. This is a negative for those customers who aren’t located in lower pricing areas.”

According to George, Pennsylvania’s recent deregulation has already proven to be a flawed system because true competition between electric suppliers has not materialized.

He also charges that the public was misinformed about the real consequences of deregulation, and claims that PPL Corporation bought electric plants outside of the state with the money they collected from increased rates. 

“This money should stay in Pennsylvania,” says George. He predicts that the long-term consequences of deregulation will be ongoing rate increases, and that this will force industry to leave Pennsylvania. George also predicts that, through his plan, one cent per kilowatt hour of savings across the board would create a total savings of billions of dollar throughout the state. “We must also help develop new plants for baseline generation,” he adds.

Financial risk?

George Lewis, spokesperson for PPL Corporation, calls the George plan a very large commitment for Harrisburg to assume that would put the state at financial risk. He says this type of risk should only be carried by private investors.

“No perfect electrical model exists, but increasing competition through the free market is the best way to provide competitive prices in Pennsylvania,” says Lewis. “The state will be subject to the same forces PPL and the others companies must deal with, such as unstable fuel prices and environmental regulations.”

Lewis says it is hard to envision how a state agency could generate substantial savings and build and run power plants better than experienced private firms can. He also questions if Harrisburg could ever recover its cost of investment, and says that all decisions by the government authority would be taxpayer financed.

Tyrone J. Christy, vice chair of the Pennsylvania Public Utility Commission (PUC), says the bill is designed to introduce real competition in the state’s electric generation market. He adds that the plan would offer long-term contracts for private investment, thereby enabling investors to take commitments to lenders.

“Our new deregulated market, which is really under PJM control, is doing well with reliability but not with competitive pricing,” says Christy.

He explains that generation prices in the state are now based on the peak natural gas generation price. However, 90 percent of Pennsylvania’s base load is still generated by coal and nuclear power, which Christy calls cheap generation.

Because the generation pricing is based on gas prices during peak periods, profits for the majority of generation are substantial. 

Christy also voices concerns that prices for generation will increase as the American economy improves. He states that market forces will allow new plants to be built only if pricing gets “ugly,” despite the fact that electricity is an essential service.

“Can we wait for market volatility to fix this?” questions Christy. “It is now necessary to build nuclear plants, which cost big dollars, but no one will do this without long-term commitments.”

Christy also takes issue with the impact of deregulated pricing on Pennsylvania’s industrial customers. He says the business plans of these companies were based on cheap affordable power, but these firms have received the biggest price increases since deregulation.

“Yes, I want generation to be profitable, but our industrial base is now paying for huge generation profits,” says Christy. “Are we doing the right thing to retain and attract industry with deregulation? The fact is Pennsylvania is not desirable for industry.”

Disguised promotion?

Robert F. Powelson, commissioner with the Pennsylvania Public Utility Commission (PUC), calls the bill a disguised attempt to promote select rate payers.

“We want 1996 prices in 2010, but the collateral risk inherent in the state becoming active in the electric market will fall on the taxpayers,” says Powelson. “Risk that can produce mistakes should be taken only by private investors.” 

Powelson urges Pennsylvania’s citizens to embrace the competitive market and to pursue tactics in electric conservation. He points to data that indicate 25 percent of the state’s electric users have already switched suppliers, and adds that attempts at regulation in Georgia and Florida eventually produced huge price increases.

“In my view, this bill in Harrisburg is a bad piece of legislation,” says Powelson. “There is no evidence to support claims of price conspiracy here, and if the state were to build generation plants it would be a high risk matter.”

According to Powelson, a mature free market model is now working in Texas, where more than 100 suppliers are making product offerings that include fixed rates, variable rates, and green generation. Additionally, with natural gas prices depressed and additional gas beginning to flow from the Marcellus Shale, power prices in Pennsylvania may drop.

Ray Dotter, spokesperson for PJM, emphasizes that fuel prices are the key to electric generation rates. He states that generation therefore involves fixing risk at a set point. “Prices for contracts also depend on timing,” says Dotter. “Some of Pennsylvania’s local utilities have been criticized for buying contracts at peak times, and that certainly can create trouble. Pricing is cost based and this goes back to fuel costs. Who will actually bear the risk, because fuel costs are an unknown?”

New parameters

Gene Barr, vice president of government and public affairs with the Pennsylvania Chamber of Business and Industry, questions if big government can do a better job of buying energy than the private sector. These concerns are amplified by the fact that the deregulated market is evolving with many new parameters.

Barr also points out that the deregulated telecommunications market is an example of free market success. Before deregulation, costs for long-distance were much higher than they are today and popular cell phone technology had not been deployed.

“Should we entrust energy to the government?” asks Barr. “Government is notorious for making choices with political motivation.”

Our Perspective:

Deregulation was started back in 1998 to help introduce competition to the utility market. In the first couple of years we found opportunity for savings with the mid to large commercial and industrial clients. However, the market turned around 2005/06 and the commodity prices increased.  As a result, it made more sense in some instances to go back to the local providers.

In the meantime, PA put a moritorium on electricity and kept the prices well below market prices. In Jan 2010, PPL openned up the deregulated market and in Jan 2011, Peco will be entering the deregulated market.

The electric commodity market prices are the lowest they have been in the last 4 years. With the openning of the PA market to deregulation, we are currently finding great opportunities for savings in the PPL territory. The price to compare in PPL is currently around $.105 cents per kwh. We are finding opportunities in the mid $.08 cent per kwh depending on the size and usage  of the client. Although this may end up being a higher price that has been paid in the past due to the moritorium on pricing. With the lifting of the moritorium, the local providers will be increasing their prices and as shown, we are finding opportunities to save on electric pricing in the future.

Peco has been buying electric on the open market for the last 6 to 9 months preparing for the intoduction of deregulation in Jan 2011. We are currently waiting for Peco to release their price to compare. It is scheduled to be released by the end of May 2010. Many of the Peco clients are preparing for this transition. Our recommendation is that if you are shopping, do not jump to make a decision until Peco releases their price to compare. This will serve as a basis of comparison to make an objective decision.

Should you like to know more about opportunities for utility savings in the NJ and PA market, email george@hbsadvantage.com or call 856-857-1230.

Positive Feedback

May 11, 2010

Our last couple of articles focused on savings in the deregulated utility markets; specifically, energy or voice and data.  We have received a great deal of feedback not only from our clients but many prospective clients, as well.

 The deregulated price of both gas and electric is the lowest it has been in 4 years.  Over the past year, we have seen commodity prices continue to fall; opening up a great opportunity for savings.  But only if you qualify!

What is the qualifier?

 Your monthly natural gas and/or electric supply cost must be a minimum of $5,000.00 each.  When you look at your utility bill, you will note that the price for each utility is made up of 2 factors:

 Delivery….This part of the bill is state regulated and is the charge for bringing both natural gas and electric from the providers’ hub to your location. This price makes up approximately 30% of your overall gas and electric cost. You will see that delivery charges are listed under each utility.

 Supply…. This part of the bill is deregulated and is the only area where you can shop to find savings.  But to shop intelligently, you need to know the factors that affect supply costs.

Buyer Beware…

 If you are not aware of how the price is determined, it may look like a great deal. Once you sign a contract and receive the invoice from the new provider, you will find that the cost is always higher than what the “professional” consultant told you.  And when you inquire why there is a price discrepancy, they will tell you what the consultant did not. 

 All electric supply charges must include a 7% NJ state sales tax and 7% loss allowance.

 Don’t be fooled!   Many “new to the market” Energy Management Consultants either do not know or will not tell you! 

 If you are bidding on electric in the state of NJ, the BPU states that the price to compare (PTC) must contain 3 factors:

  • Supply cost
  • 7% loss allowance
  • 7% sales tax 

 In order to shop your account with multiple providers, these 3 factors should be included to make an apple to apples comparison.

 Hutchinson Business Solutions is an independent energy management consultant. We have been involved in the deregulated utility market for the last 10 years and have strategic partnerships with all the major providers selling energy in NJ and PA.

 Our expertise is in allowing our clients to continue to perform their core competency while we provide smart solutions for smart business.

 Should you like to know more about the opportunities for savings in the deregulated utility market email george@hbsadvantage.com or

call 856-857-1230.

Visit us on the web www.hutchinsonbusinesssolutions.com

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

Visit or webite to learn more www.hutchinsonbusinesssolutions.com

The Deregulated Electricity Market will SAVE your company money…but only if YOU act.

Just as deregulating the airline industry resulted in more competition and lower airfares, and the deregulation of the telephone industry resulted in slashing service costs, the deregulation of the nation’s electric utilities will result in utility companies competing for your business with better service and lower prices. While it’s not yet truly practical for the average household to utilize this deregulated environment, the “mid-size” to “large” electricity consumers (small to large businesses) are now able to drastically cut their electricity costs through “aggregators” (companies that buy large volumes of electricity at wholesale rates on behalf of their clients).

A Brief History of
Utility Deregulation

Before deregulation, you were ‘held hostage’ by one telephone company monopoly. You had to pay the rates that they decided were ‘fair’ (though they had to receive approval from the government). The phone company owned the wires, switches, even your actual phone which you had to rent from the phone company (you were not allowed to own a phone of your choice and connect it to “their” system.

Then the phone company monopoly was broken up by the U.S. Justice Department and the FTC, and allowed the entry of competition. The competition began with long distance phone calls, and companies like MCI and Sprint set up their own switching systems and wires and leased the use of the old phone company’s lines (this latter part was mandated by government decree to insure competition). Long distance rates started dropping, first by a little, then drastically. Today a long-distance call can cost as little as a penny (sometimes even less), whereas that same phone call 30 years ago would have cost 20 or 30 cents (or more) per minute. The End Result? Consumers of telephone service now have multiple choices for service providers, and the cost of telephone services (especially long distance, but also local service) have dropped dramatically, saving consumers tens of millions of dollars.

THE SAME SITUATION IS OCCURING TODAY WITH
ANOTHER UTILITY: THE ELECTRIC COMPANY.

In the interest of providing the public with the lowest possible rates and a selection of service options, the U.S. electric utility industry is now in the process of being deregulated. This allows power plants to compete for your business, and as we all know, competition breeds savings for consumers. It also changes the electrical utility industry into two distinct types of services: The companies that transmit power from the electrical generating station to your home or business (they own the poles, transformers, wires, etc…these are called “the distributors”); and the companies who actually operate power plants (“the generators”) and feed electricity into the distributors’ power grids. Of course, some companies are both generators and distributors. Still, deregulation allows you to choose who actually generates the power you consume, and you are free to choose the company that generates electricity in the most cost-effective manner and therefore can sell it to you at the best price.

In 1978, Congress passed the Public Utility Regulatory Policies Act which laid the groundwork for deregulation and competition by opening wholesale power markets to nonutility producers of electricity. Congress voted to promote greater competition in the bulk power market with the passage of the Energy Policy Act of 1992. The Federal Energy Regulatory Commission (FERC) implemented the intent of the Act in 1996 with Orders 888 and 889, with the stated objective to “remove impediments to competition in wholesale trade and to bring more efficient, lower cost power to the Nation’s electricity customers.” The FERC orders required open and equal access to jurisdictional utilities’ transmission lines for all electricity producers, thus facilitating the States’ restructuring of the electric power industry to allow customers direct access to retail power generation.

As a result of the Federal and State initiatives, the electric power industry is transitioning from highly regulated, local monopolies which provided their customers with a total package of all electric services and moving towards competitive companies that provide the electricity while utilities continue to provide transmission or distribution services. States are moving away from regulations that set rates for electricity and toward oversight of an increasingly deregulated industry in which prices are determined by competitive markets. (source: United States Department of Energy)

So how do you get electricity from “Power Company A” when your existing power company is “Power Company Z”?  Envision this example: Suppose your town is served by “Power Company Z”…this is the company that owns and maintains all the wires in your town, and they also happen to have a power generating station as well. This power company also is connected via larger regional or national power grids to 3 other power generating companies (let’s call them “Generator A, B, and C”). 25% of the power users in your town buy their power from Generator A, 25% from Generator B, 25% from Generator C, and the remaining 25% continue to buy from the distributing company “Power Company Z”. If you are one of the 25% that decides to buy your power from “Generator A”, then your distributor “Power Company Z” is required to buy 25% of their overall power from Generator A, 25% from Generator B, and 25% from Generator C. That means that the actual “juice” delivered to your business at any given moment could actually be a combination of electricity from up to 4 different providers, but the end result is the same…YOU, the CONSUMER, dictates which power company provides your share of the total power distributed and used, and you pay for your energy at Power Company A’s rates.

Of course it’s entirely possible that a power distributor has no actual power generating facility, OR that everybody in their service area chooses to buy their power from a source OTHER than the distributing company. The distributing company can not be expected to maintain the poles, towers, lines, transformers, etc. for nothing. Under the new deregulated industry, you will in effect receive two bills: One to pay for the actual amount of electricity used, and another for the delivery of the energy to your business. In actuality, your monthly power bill is consolidated into one payment, but it’s easy to see how much you are paying for electricity and how much for delivery.

In the end the competition between power generating companies will lower your bill by 15 to 20%, based on the experience of electricity users in states where deregulation has already been in place for several years. In the near future this competition will also allow you to make significant social and environmental choices. You may choose, for example, to obtain your electricity from a generating company that produces electricity at a slightly lower level of savings, but uses a cleaner fuel source than another generating company. You might even choose to take a firm environmental stand of receiving very little in savings but purchasing your electricity only from a very “green” power source, such as a producer who uses hydro, solar or wind turbines to generate electricity.

In the past, you could only buy electricity from your local utility, at the rates they set. Today, you have the freedom to buy from a variety of utilities that compete on price and quality for your business.

I have been getting a lot of feedback recently from many clients. They are all saying the same thing, “ What’s going on with the energy market, seems like everyone is starting to sell energy.”

That’s a good point! Energy prices are the most competitive they have been in the last 4 to 5 years and many people are trying to jump on the bandwagon.

Hutchinson Business Solutions (HBS) has been selling both gas and electric for the last 10 years. We represent all the major providers licensed to sell energy in New Jersey and that puts us in a unique position. We do not just represent 1 company. We are an independent energy broker, able to shop both your natural gas and electric accounts to all the providers, finding you the best opportunity for savings.

You will be surprised by some of the disparity of prices we find between the various providers, although they all seem to offer a savings over the current price to compare from your local provider. What needs to be understood is that each provider may have what is known as a sweet spot ie. those markets where they are more competitive.

Electric Opportunity

 We recently presented a proposal to a client where the price to compare from PSEG was  $.1162 cents per kwh. One of our providers submitted a proposal of $.109 cents per kwh, while another one came in at $.103 cents per kwh. By shopping the account we were able to provide more value with greater savings.

 Another thing that you must be aware of, while looking at your electric price in the deregulated market, be certain that the price is fully loaded and includes all the tarrifs and Sales Tax. I have seen where a client has been given a proposal with these items left out. What might look like a better deal can in fact be deceptive for the actual price will include a 7% loss allowance and also 7% sales tax. The loss allowance and the sales tax is already included in your price to compare from the local provider. To make the proposal apples to apples this must be included.

 Should you like to know more about your opportunity for savings in the deregulated electric market email george@hbsadvantage.com  We offer a free analysis of your cost and will present a proposal of the opportunities based on your current demand and annual usage.

 Natural Gas Opportunity

 There are also opportunities available in the natural gas market. If you are currently receiving natural gas from your local provider; remember that they are purchasing natural gas wholesale and selling it to you retail. Each month the price of natural gas changes from the provider based on current market conditions. Should you have floated your account in the deregulated market over the past year buying your natural gas thru HBS, you would have saved from 10% to 20% depending on who your local provider is.

 We also offer the option to lock your price on natural gas from 1 year up to 2 years or more. Some companies prefer this option for it offers certainty as to what they will be paying over the life of the contract and protects their account from market price fluctuations.

 Should you like to know more about your opportunity for savings in the deregulated natural gas market email george@hbsadvantage.com  We offer a free analysis of your cost and will present a proposal of the opportunities based on your current demand and annual usage.

 Hutchinson Business Solutions does not charge any additional fees for our services. As stated, we are an independent energy broker and receive a small residual from our providers during the life of the contract. Therefore, all the savings fall to the bottom line.

 There are minimum usages that may qualify your account to be able to participate in the deregulated market. Normally, if you are spending on average of $2000 a month on natural gas or a minimum of $5000 a month on electric, you should be looking at the opportunities for savings in the deregulated market.

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

Deregulated Electric and Gas

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

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

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

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

In these hard economic times, Why Pay More!

Contact us today. HBS provides corporate utility financial solutions