The Little Things

November 30, 2010

I was driving down the Garden State Parkway a couple of weeks ago and I was enjoying the full color spectrum of the fall trees. Some of the trees were beginning to lose leaves but looking on a mile or so ahead, it presented a beautiful view. 

I really love this time of year and how God uses the landscape to paint a perfect picture. 

Turning onto the Atlantic City Expressway, I started to notice that the picture was fading. No longer could I see the brilliant colors ahead, for the trees were almost bare once I got to mile marker 13.5. 

I was a little surprised, for you would think that the fall splendor is universal in the area? 

I didn’t realize that there exist little pockets; that have their own hours to shine. 

We all must exist on our own timeline! 

What made mile marker 13.5 the breakpoint? 

That started me thinking. All the little things we just take for granted on a daily basis. 

What made me stop and take notice of the difference? 

Why? 

Because that is part of my character and that is what we do here at HBS. 

We look at the little things, the cost that most companies just take for granted. 

Most of our items are just budgeted for. 

What did we pay last year and how much do you think it may go up? 

     Electric…. Natural Gas…. Voice… Data…. Unemployment Taxes…. Sales Tax 

Need I say more? 

We call these costs the unsung heroes! 

These are daily cost of doing business that most companies tend to ignore. 

We find many people are resistant to change but: 

The only thing constant in life is change!  

Each client is unique. 

Each opportunity opens the door to defining what the client is currently doing; 

Exploring various options and 

Providing solutions, designed to increase efficiency and savings. 

We understand that the current economic climate has been difficult for many businesses. 

HBS provides: 

Smart Solutions for Smart Business

Many times, it is the little things that provide the best opportunities. 

Would you like to know more? Email george@hbsadvantage.com or call 856-857-1230.

Visit us on the web www.hutchinsonbusinesssolutions.com

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.

By Andrew Maykuth The Philadelphia Inquirer

Oct. 15– Peco Energy Co. said Thursday that its overall residential electric rate would increase only about 5 percent Jan. 1, putting to rest fears that deregulation would lead to a gigantic boost in the cost of power.

And for customers willing to shop around in a rapidly emerging competitive market, their bills may actually go down on New Year’s Day.

In a filing Thursday with the Pennsylvania Public Utility Commission, Peco unveiled its long-awaited default rate for residential generation service, the “price to compare” to alternative energy suppliers.

For residential customers, that price will be 9.92 cents per kilowatt-hour — a number power discounters should be able to beat.

The announcement is likely to trigger a lively fight among alternative suppliers to sign up households, which make up most of Peco’s 1.6 million customers. A residential customer typically consumes about 700 kilowatt-hours a month.

The competition for large commercial and industrial customers is already fierce.

Several suppliers, large and small, said they were planning to offer discounts but were awaiting the company’s announcement to set up their own offers. Other “green” marketers are also likely to jump into the fray, offering renewable-energy deals.

Judging from the experience of neighboring utilities that have already deregulated, consumers should expect a marketing blitz (direct mail, telemarketing, door-to-door salespeople) to crank up in the coming months.

Consumer advocates caution Peco customers to pay close attention to the offers — whether the rates are fixed or variable, and if they contain cancellation fees.

Customers are under no obligation to switch suppliers. The PUC requires Peco to supply power at the default rate to customers who stay with the utility.

Indeed, in areas of Pennsylvania where markets have already opened up, a majority of customers stayed with the traditional utility because the potential savings — perhaps only $10 a month — were not enough motive to switch.

No matter which company sells the electricity, Peco still will serve every customer because it owns the power-distribution system. Peco makes money from a regulated distribution fee, not from generating the power itself.

The restructuring is the result of Pennsylvania’s Electric Choice Act of 1996, which forced traditional utilities to divest their power plants and become merely regulated distributors of electricity over their wires. The law’s aim was to stimulate competition and suppress prices.

The law allowed Peco’s rates to remain capped through 2010 to allow the utility to recover its investments in power plants through a “transition charge.” For most of those years, the capped rates were so low alternative suppliers could not compete.

But with the caps off at the end of this year, the transition charge disappears and third-party suppliers are in a stronger position to compete.

Peco set its default generation rate after signing contracts with power generators that competed in a series of auctions over the last year.

On Thursday, Peco announced the prices to compare for a range of customer classes.

Residential customers who heat with electricity will pay 9.74 cents for the first 600 kilowatt-hours each month, then the price drops to 5.35 cents.

For small commercial customers, the price to compare is 9.47 cents per kilowatt-hour. For medium-size commercial customers, it is 9.37 cents and 9.59 cents for large customers.

All the prices to compare include only charges for generation, long-distance transmission, and the Alternative Energy Portfolio Standard, a fee that reflects the cost for the renewable power the state requires utilities to buy.

Peco’s distribution charge — which covers the cost to maintain wires and transformers, customer service, and Peco’s profit — varies among customer classes.

Cathy Engel, a spokeswoman for the utility, said prices for some customers would actually go down in January, even if they did not switch. Small commercial customers will see a 5 percent decrease.

But large customers would pay 7 percent more if they stayed with Peco’s default rate. Many have already signed up with alternative suppliers.

One new wrinkle: Electric rates now will adjust slightly each quarter to reflect changes in the wholesale market, much as rates for natural gas change seasonally.

Alternative suppliers are likely to offer fixed-rate plans to appeal to customers who want price stability. Those plans guarantee no price increases over the term of the contract.

Even though alternative suppliers may offer attractive discounts, experts say that residential customers tend to resist change.

For example, PPL Electric Utilities Corp., the Allentown company that serves much of eastern Pennsylvania, says that even though alternative suppliers offered discounts up to 15 percent, two-thirds of its residential customers stayed with PPL after rate caps were lifted in January.

PPL’s price-to-compare this year was 10.4 cents. Its price for next year is expected to fall to about 9.4 cents.

But even in that market, alternative suppliers are still offering rates below 9 cents a kilowatt-hour. That suggests the marketers in Peco’s territory are likely to undercut its 9.92-cent rate.

“Even if it’s a half-cent savings, that’s still $50 to $60 a year in savings,” said Jennifer Kocher, a PUC spokeswoman.

Power Shopping

Peco responds to customer questions at http://www.pecoanswers.com

Pa.’s PUC offers a primer for understanding your Peco bill at http://go.philly.com/pecobill

Pa.’s PUC explains electrical choice, lists alternative suppliers at http://www.papowerswitch.com

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.

As posted on Peco Website

 

   

Customer Education

<!––>
<!––>

Helping PECO customers manage
changing times

Beginning January 1, 2011, the prices PECO and our customers pay for electricity will be based on electric market pricing. Gas and electricity will cost customers more. At the same time, PECO’s operational costs have increased.
We want to help you manage these changes. This Web site will help keep you informed, answer questions and offer strategies to help save or offset much of the increase. Please look around. If you can’t find the answer here, let us know and we promise to find it for you.
For more information, visit: www.pecoanswers.com

PECO Reaches Gas and Electric Delivery Rate Case Settlements
Settlements provide necessary funds for reliable electric & natural gas service, customer support and low-income assistance

PECO today filed joint settlement petitions for consideration by the Pennsylvania Public Utility Commission (PAPUC) that reflect agreements reached with all interested groups on the increases in natural gas and electric delivery charges beginning Jan. 1, 2011.

“We are pleased to have worked cooperatively with all involved to reach these agreements,” said Denis O’Brien, PECO president and CEO.  “These settlements will help us continue to provide reliable gas and electric service and quality customer care while also managing the impact of these changes to our customers.”

The settlement reflects a $20 million overall increase in natural gas delivery rates and a $225 million increase in electric delivery rates.  Specifically, with these increases PECO will:

  • Continue to invest in our electric and natural gas delivery systems – replacing equipment, upgrading infrastructure and investing in new technology.  We plan to invest about $1.7 billion in our electric delivery system and $380 million in our natural gas delivery system during the next 5 years – ensuring reliable service to customers and employing thousands of people in our regional workforce.
  • Continue to improve customer service, and expand our natural gas energy efficiency programs.
  • Increase assistance to low-income customers by providing more tailored assistance programs and limiting total program costs.

Helping PECO customers manage

September 16, 2010

From Peco website

Beginning January 1, 2011, the prices PECO and our customers pay for electricity will be based on electric market pricing. Gas and electricity will cost customers more. At the same time, PECO’s operational costs have increased.

We want to help you manage these changes. This Web site will help keep you informed, answer questions and offer strategies to help save or offset much of the increase. Please look around. If you can’t find the answer here, let us know and we promise to find it for you.

For more information, visit: www.pecoanswers.com

PECO Reaches Gas and Electric Delivery Rate Case Settlements
Settlements provide necessary funds for reliable electric & natural gas service, customer support and low-income assistance

PECO today filed joint settlement petitions for consideration by the Pennsylvania Public Utility Commission (PAPUC) that reflect agreements reached with all interested groups on the increases in natural gas and electric delivery charges beginning Jan. 1, 2011.

“We are pleased to have worked cooperatively with all involved to reach these agreements,” said Denis O’Brien, PECO president and CEO.  “These settlements will help us continue to provide reliable gas and electric service and quality customer care while also managing the impact of these changes to our customers.”

The settlement reflects a $20 million overall increase in natural gas delivery rates and a $225 million increase in electric delivery rates.  Specifically, with these increases PECO will:

  • Continue to invest in our electric and natural gas delivery systems – replacing equipment, upgrading infrastructure and investing in new technology.  We plan to invest about $1.7 billion in our electric delivery system and $380 million in our natural gas delivery system during the next 5 years – ensuring reliable service to customers and employing thousands of people in our regional workforce.
  • Continue to improve customer service, and expand our natural gas energy efficiency programs.
  • Increase assistance to low-income customers by providing more tailored assistance programs and limiting total program costs.

Click here to view the press release

 

Because energy prices have gone up during the more than 10 years electricity prices have been capped in Pennsylvania, PECO’s rates, beginning in January 2011, will reflect those rising prices. We want to help you manage these rising costs.

We know change can be difficult, but to help ease the transition, we have created this Web site to provide tools and tips to help you use energy more efficiently and better manage your electric costs. Conservation is key.  And this site contains great information to help you conserve.

Our goal is to keep you in the know, so please explore this site and check back for exciting new ideas, programs and services as we near the final transition to market-based rates on Jan. 1, 2011.

Denis P. O’Brien
PECO President and CEO

As part of our ongoing commitment to keep customers informed, I would like to welcome you to www.peco.com/know, a site dedicated to keeping you “in the know” about the transition from capped electric rates to electric rates based on market prices.  

Beginning January 1, 2011, the prices PECO and our customers pay for electricity will be based on electric market pricing. Gas and electricity will cost customers more. At the same time, PECO’s operational costs have increased.

We want to help you manage these changes. This Web site will help keep you informed, answer questions and offer strategies to help save or offset much of the increase. Please look around. If you can’t find the answer here, let us know and we promise to find it for you.

For more information, visit: www.pecoanswers.com

 PECO Reaches Gas and Electric Delivery Rate Case Settlements
Settlements provide necessary funds for reliable electric & natural gas service, customer support and low-income assistance

PECO today filed joint settlement petitions for consideration by the Pennsylvania Public Utility Commission (PAPUC) that reflect agreements reached with all interested groups on the increases in natural gas and electric delivery charges beginning Jan. 1, 2011.

“We are pleased to have worked cooperatively with all involved to reach these agreements,” said Denis O’Brien, PECO president and CEO.  “These settlements will help us continue to provide reliable gas and electric service and quality customer care while also managing the impact of these changes to our customers.”

The settlement reflects a $20 million overall increase in natural gas delivery rates and a $225 million increase in electric delivery rates.  Specifically, with these increases PECO will:

  • Continue to invest in our electric and natural gas delivery systems – replacing equipment, upgrading infrastructure and investing in new technology.  We plan to invest about $1.7 billion in our electric delivery system and $380 million in our natural gas delivery system during the next 5 years – ensuring reliable service to customers and employing thousands of people in our regional workforce.
  • Continue to improve customer service, and expand our natural gas energy efficiency programs.
  • Increase assistance to low-income customers by providing more tailored assistance programs and limiting total program costs.

Click here to view the press release

 

As part of our ongoing commitment to keep customers informed, I would like to welcome you to www.peco.com/know, a site dedicated to keeping you “in the know” about the transition from capped electric rates to electric rates based on market prices. 

Because energy prices have gone up during the more than 10 years electricity prices have been capped in Pennsylvania, PECO’s rates, beginning in January 2011, will reflect those rising prices. We want to help you manage these rising costs.

We know change can be difficult, but to help ease the transition, we have created this Web site to provide tools and tips to help you use energy more efficiently and better manage your electric costs. Conservation is key.  And this site contains great information to help you conserve.

Our goal is to keep you in the know, so please explore this site and check back for exciting new ideas, programs and services as we near the final transition to market-based rates on Jan. 1, 2011.

Denis P. O’Brien
PECO President and CEO

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
Watch sports videos you won’t find anywhere else

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

PA Deregulation

August 6, 2010

Excerps reported by Commercial Utility Consultants

This is an article we found to be very informative. It presents a very thorough overview of how the current electric market works and what to expect as of Jan 2011.

As you may be aware, PECO’s rates are in the process of being restructured and the new rate structure will take effect January 1, 2011.  The good news is that the Transition charges that are currently applied to all PECO customers’ bills will no longer be applied.  These charges were awarded to PECO when electric deregulation was initiated in Pennsylvania back in 1998 and have been collected via customers’ billings for the last 11 years. Effective January 1, 2011, transition charges which range from approximately 25% to 30% of total PECO billings will be eliminated from the bills.

At the same time the Transition charges are phased out, PECO will begin to charge market based prices for generation.  In return for the Transition charges that PECO was awarded in 1998, the PUC mandated that PECO cap their generation charges at essentially the 1998 rates.  The generation rate caps that have been in effect since 1999 are scheduled to expire on December 31, 2010 and the new charges for generation will be effective on the January to February 2011 billings.  Since generation charges currently constitute more than 50% of PECO bills, these increases will more than offset the impact of the phase out of the transition charges.

PECO customers will be divided into four distinctive classes for purposes of default service procurement.  These classes will be defined as the Residential Class (R), Small Commercial & Industrial Class (SC&I), Medium Commercial & Industrial Class (MC&I) and Large Commercial & Industrial Class (LC&I).  The following is how the last three of these rates classes will be defined:  The SC&I class is defined as Commercial Customers with an annual peak demand of less than or equal to 100 KW; the MC&I class is defined to be customers with a peak demand greater than 100 KW and less than or equal to 500 KW and the LC&I class is defined to be customers with peak demands greater than 500 KW.

The above rate classes will determine how PECO will procure default service supply for these customers.  The fixed price default service for calendar year 2011 for the SC&I and MC&I customers will be determined through a series of three auctions in the fall 2009, spring 2010 and fall 2010.  Default service for LC&I customers will be procured through two auctions; one in the spring 2010 and one in the fall 2010.

 

Since customers are not required to make a commitment prior to the auctions being completed and the price released, PECO will be asking suppliers to submit price quotes for an unknown quantity of power and for an unknown combined load profile.  Accordingly, suppliers will need to build a great deal of risk into their price quotes given the fact PECO will not know the amount of power they will need or the combined load profile of the customers they will be serving.  In addition, suppliers will not know the credit worthiness of the customers that will select the PECO fixed price option.  With the amount of risk each supplier will have to build into their price, we do not anticipate the PECO default fixed price service to be the most competitive price available.

Any LC&I customer that does not opt into the fixed price service and still wants to remain a full service PECO customer will receive day ahead hourly pricing for 2011 as its default service.  Under this scenario, PECO will measure the amount of electricity used each hour and apply the PJM LMP day ahead price to each hour’s usage. The hourly price of electricity is extremely volatile and most financial people shy away from this option as it is not very budget friendly.

Customers will also have the option to purchase power from a third party electric generation supplier (EGS) on a negotiated contract basis. Third party suppliers will offer customers a wide variety of options from a full requirement fixed price to hourly indexed pricing based on one of the several PJM markets.  PJM is the local power pool that handles energy transactions in PECO and many other utility areas.  PJM pricing can be extremely volatile.  The PJM market price for electricity in June 2008 was $98.00 per MWH or 9.8¢ per KWH.  In June 2009, the PJM market settled at $45.00 per MWH or less than half of what it was a year earlier.  The timing of PECO’s auction and when customers shop for their electric supply will be a major factor in determining what the best option will be.  HBS will be available to assist in this process and will be able to provide pricing from all major licensed EGSs should you be interested.

While there will be an increase in the cost of electricity for most customers, the increase for those customers receiving special discounts or riders will be more substantial. Most of the discounts and riders that PECO currently offers are scheduled to be phased out at the end of 2010 further impacting the increase in overall electric costs for some PECO customers.  Discounts currently applied will still be applied but only to the distribution portion of the bills.

There are two major ways to mitigate the increase in electricity costs that will inevitably occur in 2011.   The first would be to shift major electrical usage operations to off-peak hours when prices for electricity are cheaper.  The hourly price of electricity varies like no other commodity and prices can double or triple in a single hour.  This is especially true in summer months when hot weather is a major factor in determining the hourly PJM price.  Unfortunately, most industrial customers do not have the luxury of shifting major energy using operations to off-peak hours.

Another means to reduce projected costs would be to reduce consumption.  There are a number of ways in which this can be accomplished including increasing the electrical efficiency of major energy consuming equipment. In most cases, the most straightforward and cost effective way of reducing consumption is to replace inefficient lighting with newer higher efficiency lighting.  Typically, a payback period of less than two years is attainable.  While these lighting projects may not have made economic sense in the past when the cost of electricity was lower, with the future price of electricity increasing, the economics of these projects could improve significantly.  HBS is available to assist in analyzing the results of previous lighting studies, performing a new study and/or recommending reputable companies from which to solicit proposals to perform this type of work.

Our perspective:

There is a lot of information being bantered about regarding deregulation beginning in Jan 2011.

Be sure to know all the facts.

Just what part of your bill will be effected. What are you currently paying for those items and what are the projected cost.

Should you be speaking to a broker or one of the approved providers, bve sure to ask if the price is fully loaded.

Does it include 7% loss allowance and the gross receipt tax.

Some providers are not including these items but that does not mean you will not be paying them.

to learn more email george@hbsadvantage.com

HBS is an independent energy management consultant. We have been providing deregulated saving to our clients for over 10 years.

We represent all the major providers selling energy in NJ and PA. We will define what provider(s) will be most competitive for your market and get you the best price.

Contact us today:

Smart Solutions for Smart Business

About Deregulation

July 19, 2010

As reported by PSEG

Before Deregulation 

Prior to New Jersey’s restructuring, PSE&G was responsible for generating electricity, transmitting the power to all regions of their service territory, distributing the power to the individual homes and businesses, and billing and service issues.  In addition, they were also responsible for all repairs to the electric lines and equipment.

After Deregulation

As a result of the New Jersey Energy Choice Program, the different responsibilities of the utilities were “unbundled” and the power industry was separated into four divisions: generation, transmission, and distribution, and energy services. The generation sector has been deregulated and, as a result, utilities are no longer the sole producers of electricity. The transmission and distribution sectors remain subject to regulation – either by the federal government or the New Jersey Board of Public Utilities.   No matter which electricity supplier you choose, PSE&G will continue to service the transmission and distribution sectors of your electricity.

Competition is allowed between companies to provide power at discounted rates and superb customer service directly to customers. These companies are licensed by the state of New Jersey.  You also have the opportunity to work with an electricity broker or consultant who can compare different offers and provide additional services to help manage your energy spending.

In most cases, PSE&G will continue to send you your utility bill.  So the only thing that changes if you shop for a better rate is that better rate.

Our Perspective:

Deregulation has presented a great opportunity for busnesses who are spending more than $3000 a month on their electric bills. Open market electric prices are the lowest they have been in over 4 years. HBS clients are saving from10% to 25% on their electric supply cost depending on their uasge patterns. Those businesses that are designed to use more off hours usage, will find the largest opportunity for savings.

To learn more about your opportunity to save in the deregulated energy market  email george@hbsadvantage.com