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.

By Andrew Maykuth

Inquirer Staff Writer

Pennsylvania electricity customers are skeptical they can save much by
shopping for power.

Although 88 percent of customers say they are aware they can switch to
alternative suppliers, only 45 percent have shopped, according to a statewide
survey conducted by Terry Madonna Opinion Research.

Twenty-three percent of residential customers statewide have switched,
according to the Pennsylvania Public Utility Commission. About 1.4 million
customers have switched.

Madonna and several electricity suppliers told the PUC on Thursday that
nearly a year after Pennsylvania’s retail utility deregulation went into full
effect, the public remains wary of shopping.

“There are a fair number of people who did not look into changing an electric
supplier because they didn’t believe there would be long-term savings in it,”
said Madonna, director of the Center for Politics and Public Affairs at Franklin
and Marshall College in Lancaster.

The poll results were presented Thursday at a PUC hearing on competition.

The surveys found that price was the main concern driving customers to
switch, but many said the perceived savings were insufficient to make them
switch.

Suppliers said some residential customers have recorded savings up to $300 a
year.

Madonna, who conducted his telephone survey of 801 customers in September on
behalf of Constellation Energy, said 78 percent said they would consider
switching if they could save 10 percent on their generation charge.

Many customers who declined to shop said they were happy with their current
supplier regardless of the cost.

Madonna’s findings were echoed by an Internet survey of 450 customers
conducted by AlphaBuyer, a Paoli group- buyer that markets online.

Forty percent of the customers said the savings were not worth it, said Kevin
McCloskey, AlphaBuyer’s chief operating officer. About 24 percent said shopping
was too confusing or the choices overwhelming. About 15 percent said switching
was too risky or that it was a “scam.”

Under Pennsylvania’s Electric Choice law, customers can choose a company that
markets the power. Billing is still conducted by the incumbent utility company,
which collects a fee for distributing the power.

Customers who don’t switch are still supplied by the utility at a default
rate.

Only 18 percent of customers had visited the PUC’s website for choosing a
supplier. PUC members said more customer education was needed.

“It’s perplexing to us with all the tools being made available to customers
we only see 20 percent of the residential customers shopping,” said Robert F.
Powelson, PUC chairman.

Our Perspective:

HBS has been dealing in the deregulated energy market for over 10 years. I have always been suspect of the proposed residential savings in this market.  Most of the time you are offered a floating rate that may offer minimal savings.

The opposite is true in the commercial market. There are providers offering fixed price alternatives that offer a great opportunity for savings. HBS has found great success in the PA commercial deregulated market. We represent all the major providers selling electric in the PA market.

There is no upfront cost. Deregulated savings in the energy market has been a welcomed windfall for any business in both the New Jersey and Peennsylvania market who willing to look at the opportunity.

 

Read more: http://www.philly.com/philly/business/20111111_Most_in_Pa__avoid_shopping_for_electricity_supplier.html#ixzz1ddcYbDS5

Posted on Tue, Oct. 11, 2011

By Andrew Maykuth

Inquirer Staff Writer

Peco Energy Co. electric customers may be feeling a little deregulatory
whiplash.

Since market rates went into effect this year for the Philadelphia utility’s
1.6 million customers, the price for residential electric power has gone up 12
percent. The biggest quarterly increase took effect Oct. 1 and will be reflected
in bills that go out later this month.

But take heart, customers. Without fanfare, Peco last week posted its
projected prices for Jan. 1, 2012, and it estimates residential rates will fall
dramatically, back to the point where they started in 2011.

“This is good news,” said Catherine Engel Menendez, Peco’s spokeswoman.

The quarterly adjustments are a feature of electric deregulation that went
into effect this year for Peco customers.

The major factors behind the rise and fall of rates are seasonal fluctuations
in wholesale power prices that were invisible to customers under the old
fixed-rate system. The variations became noticeable after rate caps came off and
Peco’s rates were adjusted every three months.

The price fluctuations are exaggerated in the current quarter – up 7 percent
– because Peco is allowed to recover money it did not collect earlier this year
when wholesale prices were higher than expected. The state requires utilities to
reconcile under- or over-collections in the next quarter.

Peco’s quarterly price swings add a wrinkle to the process of shopping for an
alternative electric supplier.

Under Pennsylvania’s Electric Choice Act, customers are free to shop for
power suppliers, whose charges make up about two-thirds of the monthly bill.
(Peco still collects a distribution fee from all customers for using its wires,
regardless of who generates the electricity.)

Since rate caps were lifted, about 370,000 Peco customers have switched to
alternative suppliers. Some suppliers are currently ramping up marketing
campaigns to capture Peco customers, pointing out that their rates are
substantially less than Peco’s Oct. 1 rate of 11.14 cents per kilowatt-hour.

For instance, Constellation Energy Group Inc., a Maryland supplier, is
currently offering a 12-month fixed price of 9.98 cents per kilowatt-hour, which
it advertises is about 10 percent less than Peco’s price.

But customers who opt for Constellation’s fixed-rate contract could find they
will be paying slightly more than Peco customers after Jan. 1, when
Peco’s rate is projected to drop to 9.91 cents per kilowatt-hour.

Peco’s impending price decrease will create new challenges for suppliers as
they set their prices for next year, said Jossi Fritz-Mauer, codirector of the
Energy Cooperative of Pennsylvania, whose current rate is greater than Peco’s
projected price in January.

“The Energy Cooperative is still in the process of finalizing our prices for
2012, but this certainly presents a new dynamic for Peco customers looking to
shop,” said Fritz-Mauer.

Jennifer Kocher, the spokeswoman for the Pennsylvania Public Utility
Commission, said that customers were becoming increasingly sophisticated as the
markets mature and that more were switching in response to price changes.

She said the PUC advises customers contemplating a switch to compare prices
at the commission’s website.

“We would hope that anybody who is shopping would do their due diligence,”
she said.

Irwin “Sonny” Popowsky, Pennsylvania’s consumer advocate, said the price
fluctuations underscored the risks and rewards of locking into fixed-rate
contracts when market rates are high or low.

“Some suppliers are able to beat Peco’s rate, but perhaps not as much as they
did a year ago,” he said.

Indeed, Peco customers who locked in last December with suppliers offering
12-month fixed-rate deals of 8.89 cents per kilowatt-hour are currently paying
20 percent less than customers who stayed with the utility. For a customer using
500 kilowatt-hours a month, the monthly savings amount to about $11.20.

Not every Peco customer benefits by switching to an alternative supplier.

Alternative suppliers are still unable to beat the utility’s discounted rates
for about 160,000 residential heating customers and 80,000 customers with
electric water heaters, said Engel Menendez.

But those below-market rates are scheduled to be eliminated at the end of
2012, and the utility expects suppliers to begin courting those customers at the
end of next year.

Read more: http://www.philly.com/philly/business/20111011_Peco_predicts_a_drop_in_electric-power_price.html#ixzz1aUmhf6Ky

Watch
sports videos you won’t find anywhere else

As printed in philly.com

 

LindaPeterson  of West Chester was eager to switch from Peco Energy Co. at the end of last year.
She signed up for an alternative electricity supplier offering avariable rate that would fluctuate depending upon market conditions.

AsPeterson  discovered, variable rates sure can vary.

For a few months this year, Peterson’s rate was very attractive, indeed. But it went up
58 percent from May to June. At 15.63 cents per kilowatt hour – that’s just the
generation charge – her last bill was about $23 more than it would have been had
she stayed with Peco.

“I knew there would be some variation, but that’s just a huge, huge increase,” said
Peterson, who is semi-retired.

A representative from her supplier, Palmco Power PA L.L.C., did not return a phone call about
Peterson’s bill. But its customer-service department, in an unsigned e-mail,
blamed an “unusual” wholesale price spike for the increase.

“Thankfully,however, shortly after the wholesale price increase, wholesale prices dropped,and our
price billed to our customers dropped accordingly,” it said.

In Pennsylvania’s buyer-beware world of deregulated utilities, Peterson can’t do much but switch to
another supplier. Her agreement, like most with variablerates, does not carry an
early cancellation fee.

According to the state Public Utility Commission, a supplier can bill a variable-rate customer
at whatever price it believes the market will bear, even if the customer
originally thought he or she was getting a discount.

A company also can offer different rates to different customers. The variable rate that is
on a customer’s bill does not have to be the same as the initial price posted on
the PUC’s website, http://PAPowerSwitch.com.

“A supplier could have one rate for PowerSwitch . . . while offering a different rate
door-to-door . . . yet a different rate for enrolling by mail,”Denise McCracken,
the PUC’s spokeswoman, said in an e-mail. “They could offer me one rate . . . my
neighbor a different rate (as long as they are not discriminatingon the basis of
race, gender, etc. of course).”

In Pennsylvania and New Jersey, where dozens of electrical suppliers are competing, customers
accustomed to a lifetime of regulated utility prices now face a dizzying array of
choices – fixed rates, variable rates, and”green” rates from renewable-power
generators. Next year, Peco customers will begin seeing rates that vary hourly,
according to the market.

More than 20 percent of Peco customers have switched since Jan. 1. But despite promises of
savings, most residential customers seem unwilling to leave the protective comfort of the regulated utility.

On Monday, the Retail Energy Supply Association launched a campaign to educate customers
about the benefits of switching, but it faces headwinds generated bycustomers such as Peterson, who share their experiences.

“My neighbors are very scared about switching,” said Peterson, a clinical social worker with a
small private practice.

Peterson was an early adopter of electricity choice. She had switched suppliers in the late
1990s, when limited deregulation was introduced into the Peco market. Competitive
suppliers eventually pulled out because they could no longer beat the utility’s
capped rates. But when Peco’s rate limits were lifted at the endof 2010,
competitive suppliers returned en masse.

Peterson signed up with Palmco, the marketing arm of a Brooklyn fuel-oil dealer, which posted a
price on the PUC’s website. She liked the company’s low-key marketing,compared
with the blustery direct-mail appeals she received from bigger suppliers.

“The fact that they weren’t doing a lot of heavy marketing, I guess I trusted them
a little,” she said. “I didn’t expect them to escalate the price like that.”

According to a review of Peterson’s bills, Palmco’s rate was very generous during the first
few months. It charged her an introductory rate of 5.78 cents perkilowatt hour,
clearly a below-market 42 percent off Peco’s rate. But by May,Palmco’s rate had
increased to 9.91 cents – just about the same rate Peco was charging.

And then in June came the whopping 58 percent increase – to 15.63 cents per kilowatt hour.
Peterson averages about 475 kilowatt hours a month.

The owner of Palmco, Robert Palmese, did not return a phone call. But his
company’scustomer-service department offered this response:

“Our family has been in the energy business since 1938, 73 years. We know from experience
that it is always in the best interest of our customers to keep prices for energy
as low as possible.”

In an interview in October, Palmese offered reassurance to customers who might consider
his company.

“We have very casual marketing,” he said. “We’d like our customers tolike us. Just try
us, you may like us.

“You are always free to leave.”

 

Our Perspective

HBS is a independent deregulated energy management consultant. We have been providing deregulated energy solutions to our clients since 2000. We have heard stories like the one experienced above, countless times.

While the energy market prices are at their low point, it would be smart to lock into a fixed price contract for natural gas or electric for a minimum of 1 year but also be willing to look at the 2 year option. Fixed priced contracts normally provide a 10% to 15% savings under what Peco ic currently charging.

Do not be fooled by the variable rate options.

It is a good marketing ploy….

no contract…

month to month float….

But you will only pay more in the long run.

 

To learn more about deregulated opportunities for yopur business email

george@hbsadvantage.com

Visit us on the web www.hutchinsonbusinesssolutions.com

By Andrew Maykuth

INQUIRER STAFF WRITER

Peco Energy Co.’s electrical prices for commercial customers will increase between 9.4 percent and 12.6 percent on July 1, the Philadelphia utility announced Tuesday.

Peco’s commodity charge, which accounts for about two-thirds of a typical customer’s bill, will increase sharply to reflect the higher price of procuring power during the summer months, said Cathy Engel Menendez, the utility’s spokeswoman.

The increase won’t affect the 37 percent of Peco’s 60,359 small commercial customers who have switched electrical suppliers in Pennsylvania’s deregulated energy markets. Nor will the increase affect most larger commercial and industrial customers, the vast majority of which switched suppliers after Peco’s market rates went into effect this year.

Shop owners, office managers and manufacturers that had been sitting on the fence about shopping for electrical suppliers might take a second look at alternatives in the face of the impending increase.

For small commercial customers, Peco’s price to compare will increase from 9.43 cents per kilowatt hour to 10.32 cents on July 1, a 9.4 percent increase.

For medium commercial customers, whose demand is between 100 kilowatts and 500 kilowatts, the rate will increase from 9.30 cents per kWh to 10.47 cents, a 12.6 percent.

Peco had already announced that its charges will be increasing by 4.3 percent on July 1 for residential customers. Peco’s residential price-to-compare will increase from 9.99 cents to 10.42 cents. For consumption above 500 kilowatt hours, the price increases to 11.69 cents per kWh.

Peco says that the commodity prices are based on procurement contracts with suppliers, and that the utility passes the cost along to customers without markup.

The wholesale cost of power has always fluctuated seasonally, but it is only this year that Peco’s charges are adjusted quarterly to reflect the market conditions. Electricity tends to be more expensive in the summer, when demand is higher.

The adjustments don’t affect Peco’s distribution charge, which is assessed on each customer regardless of who supplies the electrical power. The distribution charge reflects Peco’s cost for maintaining the wires and customer service system, and is regulated by the Public Utility Commission.

While most alternative suppliers quote their residential rates in public through the PUC, only a few post their commercial rates, which are often quoted individually and depend upon a customer’s usage patterns.

The Energy Cooperative Association of Philadelphia is one supplier that does post its small-commercial rates, which may now be more attractive in light of Peco’s impending increase.

The Energy Coop charges 9.42 cents per kilowatt hour for small commercial customers, virtually identical to Peco’s current rate. But when Peco’s rate goes up to 10.32 cents in July, the nonprofit’s price will be 8.7 percent less than the utility’s. The cooperative also charges commercial customers a $30 membership fee.

Jossi Fritz-Mauer, co-director of the cooperative, said customers need to initiate the switch now in order to take advantage of the savings this summer.

“Businesses and residents won’t see those huge bills for their summer usage until it’s too late,” said Fritz-Mauer.

“If they wait for big bills to shock them into switching, they’ll miss out on a lot of savings,” he said.

Note:  Hutchinson Business Solutions has been providing commercial deregulation savings solutions to their clients for over 10 years. There are great opportunity for savings.

Call 856-857-1230 or email george@hbsadvantage.com to learn more about your opportunity to save.

Online Auctions

March 31, 2011

The deregulated energy market is causing a big buzz in this area. In the spring of 2010, NJ opened up deregulated opportunities to the residential market.

In January 2011, PA opened up the Peco territory to deregulation after a 5 year moratorium.

As the result, the market has been flooded with companies and individuals trying to capitalize on these opportunities.

Online Auction opportunities are now available. All you have to do is type buying deregulated energy online into your Google page and you will have multiple selections.

Also many companies have been promoting a Multi-level marketing approach to set up a grass roots effort in hopes of gaining penetration in the market.

.

As more consumers have grown more comfortable with on line purchasing, it seemed natural that this avenue would be an effective marketing option.

The only problem we see is that when buying energy in the deregulated market, you are dealing with a commodity. This puts a whole new spin on the opportunity.

This week, we would like to take a look at on line auctions.

Below is a plus-minus list we have developed to help you make an objective decision about purchasing energy on line versus using an independent broker.

On Line Auctions:

Plus

  • Feel like you are getting a good deal by participating in an ecommerce transaction
  • Potentially lower price by doing the ecommerce transaction 
  • Potentially easier transaction since there is limited contact with 3rd party energy suppliers
  • Electricity is a commodity and customer’s management feels this is best process for doing transaction

 

Minus

  • Can be more challenging to negotiate terms & conditions  
  • Potentially less leverage with suppliers since there is no personal interaction
  • Difficult determining what factors are included in the price.
    •  Is it fully loaded? (contains 7% loss transmission and sales tax)
    •  Is it a fixed rate or variable rate?
  • How do you know when is the best time to buy
  • Online auctioneers are brokers approaching the same providers we would be using.
  • Many on line auction companies do not have any information on their website regarding the management of the company

 

Dealing with an Independent Broker (Hutchinson Business Solutions)

 

Plus   

  • We represent all the major 3rd party providers selling energy in deregulated sates
  • We offer personal service, individually marketing your account to these providers
  • We monitor market fluctuations and discuss timing with our clients
  • We offer fixed price solutions (Other options available for large volume users)
  • We make sure all prices received are fully loaded and are an apples to apples comparison to your local utility’s price to compare
  • Due to our business relationships, we bring leverage to the deal
  • We assist with customer’s legal team in negotiating the business terms of the contract as they may apply
  • We provide options, defining the best terms and conditions and service the account throughout the term of the contract, addressing issues as they arise
  • We have been advising customer risk management strategies in the deregulated markets for over 10 years.
  • Opportunity to outsource many of the tasks involved with the energy procurement process while retaining the control and final decisions on any potential transaction

 

Minus

  • The energy market is in a growth mode, many new faces and the information is sketchy.
  • You must be sure to deal with a reputable company who will represent your best interest
  • Many of the new companies are offering variable rates

 

At first glance you may think this overview is biased.

Yes, we are an independent broker. We take pride in the value we have brought to our clients in the deregulated market.

We have just seen too much abuse. The deregulated energy market is an unknown.

We take time to explain how the market works with each client. We want you to understand this concept and feel comfortable with your purchase.

Each account is unique. There is no one size fits all solution.

There are great opportunities for savings in the business market.

Know the facts!!!!

Look to ask the right questions.

Let HBS be your eyes and ears….

While you continue to do what you do best….

Run your day to day business.

To learn more about deregulated energy opportunitiews for your business email george@hbsadvantage.com

Visit us on the web www.hutchinsonbusinesssolutions.com

Note: With the current deregulated market opportunities now being presented to many business that qualify, the market has been inundated with new sales personnel. I found this article provides on objective overview of questions you should ask and details you should know before making a decision.

There are many companies offering variable electric rates. I would not recommend this solution at this time.

With natural gas prices being the lowest they have been in the last 3 or 4 years, there are great opportunities to lock into a fixed price electric contract for a 1 or 2 year period.

By Carl Shaw

With the deregulation of energy in many parts of the US, competition is now allowed between energy companies to provide electricity at discounted rates directly to their customers. These Energy Service Provider Companies (ESCOs) are licensed by individual states and are required to adhere to the applicable regulatory guidelines set by the Public Service Commissions (PSC) or Public Utility Commission (PUC).  Customers (end-users) also have the opportunity to work with electricity brokers or consultants who can compare different offers and provide additional services to help manage your monthly energy spending and costs.

If you are a business spending a minimum of $3000 a month  on your electric or natural gas bill, you may qualify to choose your electric or natural gas supplier in deregulated markets, which could create savings opportunities. Companies that can control or manage their electric consumption to use more electricity in the off-peak hours will find the greatest opportunity for savings. In deregulated markets, you now have a choice and can choose lower energy rates without any risk or local service change.

Your local energy service providers buy natural gas and electricity on the open market at wholesale prices based on the current market conditions and then bill their customers at increased rates to include margins and/or service fees.

Independent Deregulated brokers can put your company in a competitive position by leveraging extensive buying power to help you develop energy supply procurement programs. They can conduct an unbiased rate and tariff analyses that may result in substantial savings to you. 

Due to the current economic conditions and the complications deregulation has caused there are many new energy advisory companies popping up, so be sure to know all the facts before making any decision.

When choosing a qualified utility tariff analysis & rate optimization firm to represent you, you should be aware of a few things:

First, be sure that the price you are quoted from your local provider includes all charges. Should you be talking to a consultant or broker, make sure the price is “fully loaded” meaning, does it include the 7% loss allowance (to deliver 100,000 kWh of electric, the providers must actually send 107,000 kWh, for there is a 7% loss in transmission)? Also does it include the local sales tax?

In PA, you must also ask if the price includes GRT (gross receipt tax) and RMR (reliabilty must run). RMR is a pass thru charge from the provider that allows them to meet peak demand periods when they must use additional resources to meet this demand. This is normally found during the summer months.

All these important components should be included in the quote from your deregulated provider to make an accurate comparison. These components are included in your price to compare from your local provider.  Often, companies will provide a low end quote without including sales tax and a load allowance. Be sure you are comparing apples to apples. Often when these figures are included, their real quote is much higher.

Does the company providing your quote have an Energy Information Management System in place, to make sure that you are getting the best available rate?

Are they shopping your account to more than 1 provider. Each provider has a sweet spot (a market they are most competitive in). An independent broker who knows the market will be able to identify these providers and work to get the best price.

Information is power. Knowing what questions to ask will save you time and money.

There are opportunities to save from 10% to 25% in the deregulated electric market depending on your usage patterns.

When making a final decision, know that you are dealing with a commodity and timing is everything. Market fluctuations may happen on a daily basis.

 
Posted on Sun, Jan. 16, 2011

By Andrew Maykuth

Inquirer Staff Writer

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Our Perspective:

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

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

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

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

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

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

Read more: http://www.philly.com/inquirer/business/20110116_New_Jersey_consumers_perplexed_by_elecric-power_options.html?viewAll=y#ixzz1BFl4JZXL
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Finally

November 23, 2010

It’s been a long wait.

It has been well publicized, that in January 2011, PECO will lift the rate caps on electric prices and will be entering the deregulated market.

Just what does this mean for PECO customers?

As part of deregulation, local providers will no longer own their own power plants to generate electric. Their job is to deliver electricity to the end user, the client.

They are able to sell the supply, which they buy through an auction process, to anyone who chooses to stay with the local provider at a default price, which could be higher.

PECO is actually encouraging larger users to shop their rates with 3rd party providers. 

If your business is currently spending a minimum of $5000 a month on electricity, Hutchinson Business Solutions will now be able to help you buy your electric supply from a 3rd party supplier.

The new rates PECO will be proposing as of Jan 2011 will be tiered for certain rate classes. For certain customers the first tier is for the first 80 hours of usage per month, and is the highest rate. This can range from $0.16 cent per kwh to $0.17 cents per kwh.

The prices will be scaled down as your usages progress. The more electric you use, the more the price goes down.

PECO is only publishing these rates for 90 days. That means that as of April 1st, new prices will appear based on such potential factors as:

                                                  – How PECO needs to true-up their costs

                                                  – Current market values at that time.

 Another factor being added into the PECO price to compare is RMR (Reliability Must Run). This is a pass thru cost from the local provider for system reliability.

This means having the ability to generate electric when it is needed. Although this cost has not been defined, it could be in the $0.001 mil to $0.003 mil ranges (3 mil ie:3 tenths of a penny).

The bottom line, should you choose to stay with PECO, you could be paying higher default rates as of Jan 2011.

Each account is unique, based on their demand and usage patterns. For smaller to midsize accounts; we could see electric supply prices in the $.010 cents per kwh to $.13 cent range as a default price from PECO.

We have been working with clients in the PECO territory this year and have found significant opportunities in the deregulated electric market.

HBS clients are finding savings ranging from 10% to 20% by purchasing electric thru deregulated 3rd party providers.

Hutchinson Business Solutions (HBS) has been providing independent, deregulated energy solutions for over 10 years.

There is no upfront fee.

Our strategic partnerships allow us to represent all the major providers currently selling energy in deregulated states.

Should you like to know more about this topic, email george@hbsadvantage.com

or call 856-857-1230 

Visit s 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.