Government boards regulate the utility market price.  Although, the state utility regulator is required to pass market savings onto the consumer, local providers buy natural gas on the wholesale market and bill their customers’ retail. We put our clients in a wholesale position because brokers/marketers have the flexibility to buy gas when rates are lower and pass the savings onto their clients.

Comparing and deciding among the various offers.

In the new deregulated industry, buying natural gas is like getting a home loan. You can select between:

  • Contract terms of 1 to 5 years
  • Lock in at a fixed rate for an extended period of time
  • Choose variable rates and rely on an experienced gas manager to get you the lowest price

Why switch?

Most consumers switch to brokers/marketers to save money.  Together you can determine your comfort level.

Ø    Security – if the utility price makes you feel more secure, choose an option that offers a percentage less than the utility for guaranteed savings.

Ø    Lowest Price – if you want to have a knowledgeable gas company managing your gas supply, select the variable rate and let a gas supplier manage it for you.

Ø    Fixed Price – if you think prices are going to continue to rise and you want to be sure of your bills, choose a fixed price.

Regulated rates are not fixed rates.

Each province or state has an agency that regulates utility rates. Utilities can and do apply changes to rates.  They are not allowed to offer fixed contracts. By signing up with an energy marketer you can avoid these unexpected rate changes. We competitively tender your natural gas needs to deregulated natural gas marketers.

If you choose to buy from a gas broker/ marketer, your gas service won’t change.

You will continue to receive a bill from your distributing utility authority indicating their regulated delivery charge (about half of your bill) and a gas supply charge that goes to the gas supplier. If you also have rental equipment or a service contract, these will appear on your bill, as usual.

It’s important to remember these cost splits when comparing prices. The suppliers, brokers and/or marketers are offering rates on only half of your bill. As previously stated, the distribution charge and monthly service charge is fixed.  It is strictly regulated by an Energy Board or Public Service Commission. As a result, when a promotional message claims a 10% saving, it is ONLY referring to that 10% controlled by all energy brokers.

You do the math.

To qualify in the deregulated market, your company must spend a minimum of $5,000.00/ month ($60,000.00/year) on natural gas. Half of that monthly fee ($2,500.00) is a regulated transportation and delivery charge. The remainder is the gas supply charge.

A gas marketer offering a 10% savings is offering a savings of $250.00/ month, 10% of the $2,500.00 gas supply charge. Your annual savings would be $3,000.00.

Saving is parity to how much you spend. The above example applies only to minimum qualifications.  The more you use, the more you save.

Hutchinson Business Solutions (HBS) is an independent energy management consultant. We have been providing deregulated energy solutions to our clients for over 10 years. HBS clients are saving from 10% to 20% on their natural gas supply bills.

Large market swings offer you big savings.

If you have been following market prices for natural gas, over the past couple of years, you have probably noticed the large market swings. ie: In 2008, PSEG prices ranged from $1.07 per therm in February to $1.64 per therm in July. In 2009, prices dropped and we saw $.889 cents per therm in January with a low of $.496 cents a therm in September.  With so much market fluctuation, we have been advising our clients to float their accounts, based on the market index.  In this way, our clients can save anywhere between, 8% up to 20%, depending on whom their local provider is.

Choosing to float the market index does not preclude you “locking in” on a fixed price at any time during the term of the contract. Conversely, if you choose a fixed price, you are unable to change to a float when market prices go down.

Want to learn more about opportunities to save in the deregulated natural gas market email george@hbsadvantage.com or call 856-857-1230.

Visit us on the web www.hutchinsonbusinesssolutions.com

Posted on Fri, Jan. 1, 2010

By Andrew Maykuth

Inquirer Staff Writer

When the Pennsylvania legislature approved electric competition 13 years ago, lawmakers imagined that one day most customers would shop around for the cheapest price or the best service – the way they now do with cell phone providers.

That hasn’t happened.

In two parts of Western Pennsylvania, where market rates rule, for example, less than 20 percent of residential customers have opted for alternative suppliers, despite offers of discounts ranging from 7 percent to 10 percent.

Instead of choosing a power supplier that would save a typical Pennsylvania household about $100 a year, residential customers there seem to be saying that the savings just aren’t worth the hassle of shopping.

“The idea was to give customers a choice,” said James H. Cawley, chairman of the state Public Utility Commission. “You can only do so much, and if people don’t help themselves, you can’t make them.”

But Cawley and others say they believe the climate might change dramatically in the next month as full competition is introduced to the vast territory in central and eastern Pennsylvania served by PPL Electric Utilities Corp., of Allentown, which has 1.4 million customers, nearly a quarter of the state’s total.

Today, state-mandated caps will be lifted in PPL territory – which includes parts of Bucks, Montgomery, and Chester Counties – and rates will go up about 30 percent. Five suppliers are blanketing the territory with ads and direct-mail offers of discounts that would cut the amount of the increase about a third.

Already, 148,000 customers, more than 10 percent, have signed up.

The experience in PPL territory will set the stage for the complete transition of Pennsylvania’s regulated electric utilities to open competition at the end of 2010, when rate caps expire for five remaining utilities, including the biggest, Philadelphia’s Peco Energy Co.

Power brokers are ramping up activity in the state now, with the aim of establishing a long-term presence. Cawley said he had talked to the electrical-generation suppliers, “and they think the Peco market is huge.”

If the industry’s experience in Western Pennsylvania is any indication, residential customers will be reluctant to embrace the change.

In areas served by Duquesne Light Co., of Pittsburgh, and Penn Power Co., of New Castle, Pa., where rate caps came off in recent years, only about one in five residential customers have switched suppliers – though a majority of commercial customers and nearly all industrial customers have.

“We and the utilities haven’t done enough to educate customers,” said Dan Donovan, spokesman for Dominion Retail, a nonregulated subsidiary of the Richmond, Va., energy company that markets in Pennsylvania.

Under the Electricity Generation Choice and Competition Act of 1997, utilities such as Peco and PPL Electric divested their power plants and became distributors that deliver electricity to customers. They earn profits only for the monopoly service they provide to all customers, such as billing and maintenance of distribution lines. Those charges are still regulated by the PUC.

Though the utilities are indifferent to which suppliers their customers choose, the PUC has ordered them to provide power to those customers who do not choose. A utility’s rate, which is an average price of contracts from power suppliers who bid at auctions, is called the default rate.

PPL’s default rate is 10.45 cents per kilowatt-hour, compared with prices of 9.38 cents to 9.52 cents per kilowatt-hour from alternative suppliers. The average Pennsylvania residential customer consumes 10,500 kilowatt-hours a year, so those pennies add up.

Donovan said many customers misunderstood the process of shopping for a generation supplier, whose charges typically make up about 70 percent of the total bill.

“It’s painless,” he said. “You still get one bill. It doesn’t change anything.”

Suppliers offering the best prices typically want customers to commit for at least a year. Some impose fees for early cancellation of the contract.

Cawley, the PUC chairman, said customers who did not switch often said they could not be bothered with shopping for savings of only $100 a year.

“That’s not serious money?” he asked.

Many customers also fear that by choosing a supplier other than their present utility, they will be penalized with poor service.

“It’s nonsense,” Cawley said.

Our Perspective:

We have found great opportunity for deregulated savings in the commercial market. 

 Hutchinson Business Solutions is an independent energy management broker. We have been providing savings in the deregulated energy market in the Mid Atlantic region for the last 10 years. We have strategic partnerships with all the major gas and electrical providers selling deregulation in the PPL territory.

Our clients are saving from 10% to 40% in the deregulated gas and electric market.

We offer a free analysis of your current energy cost from your local provider. All we need is a copy of your latest gas and electric bill.

If you would like to know more about the current market conditions and your opportnity for savings email george@hbsadvantage.com or call 856-857-1230

Deregulated Energy FAQ

February 1, 2010

Deregulated energy markets throughout the United States can mean substantial cost savings for businesses aware of the opportunities. Hutchinson Business Solutions makes benefiting from deregulation easy by answering your questions and showing you how our expertise in deregulated energy markets, coupled with our world-class list of energy providers, can help control costs, stabilize energy expenditures and increase profits for your company.

Q: Will the reliability of my electric or natural gas service change with deregulation?
A: No. Regardless of which energy provider we help you choose, your electricity and natural gas will continue to be delivered safely and reliably by the local utility company, a company still regulated by the Public Utility Commission.


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Q: What happens if I have an emergency or power outage?
A: Because your local wires company is still responsible for the maintenance and repair of the poles and wires, you will call them in the event of an emergency or outage at the number provided on your bill.

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Q: What has stayed the same in electric and natural gas service with deregulation?
A: Your current Transmission and Distribution Utility, continues to deliver electricity and natural gas to your business. Your local utility company still responds to service interruptions and continues to maintain the poles, wires and pipelines. You will continue to receive the same reliable service you are used to with your local utility company, regardless of which energy provider you receive service from.

It’s helpful to think of electricity and natural gas deregulation like the deregulation that occurred several years ago in the long-distance telephone service market. Consumers now have the power to choose the long-distance carrier of their own liking. However, regardless of which long-distance carrier they choose, their phone lines are still provided and serviced by the same local phone company.

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Q: What has changed in electric and natural gas service with deregulation?
A: You can now choose to buy your energy from a different provider than the original provider for your area. These companies are called retail energy providers. Additionally, your bill now looks different than bills you have received in the past, but each retail energy provider provides the same standard information.

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Q: Does everyone have the option to choose a new electricity or natural gas provider?
A: Unfortunately not. City-owned utilities and member-owned electric cooperatives have the option of giving their customers a choice of providers, or keeping things the same.

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Q: Why use an energy procurement advisor?
A: The answer is simple: we save you time and money. Staying in-tune daily with energy markets, providers and new opportunities is a full-time job. With Hutchinson Business Solutions (HBS Energy Management) you can capitalize on the benefits offered by deregulation without committing significant time and resources to understanding the complexity of the markets.

We get to know your business and your specific energy needs. Then we negotiate with energy providers on your behalf to get the best rates and options. After you have an agreement with a provider, we continue to service your business, and in case your needs change we are there to renegotiate new agreements that fit those needs. We do all the work. You receive all the benefits, including no out of pocket costs!

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Q: Will I notice a change of service when I switch my energy provider?
A: No. No matter which energy provider you choose, your energy will continue to be delivered safely and reliably by the local utility company, a company still regulated by the Public Utility Commission.

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Q: What happens if my energy provider stops serving customers?
A: If this were to take place, you would not be without energy. Your energy provider must give you advance notice to give you time to select a new provider. However, if you do not choose a new energy provider, your service will automatically be switched to another provider for your area. In this case, your energy rate may increase, so it’s in your best interest to find a new provider if yours stops serving you.

Hutchinson Business Solutions has been an independent broker in the deregulated natural gas and electric market for over 10 years.  Your local provider buys natural gas and electric wholesale and then sells it to you the customer retail. We put our clients in a wholesale position.

To learn more about deregulated natural gas and electric opportunities you may email george@hbsadvantage.com or call 856-857-1230. Our clients are saving from 10% to 40% on their supply cost. Your savings fall to the bottom line.