Live Update

June 11, 2015

Good Afternoon…..

This is George Hutchinson….

Bringing you a live energy update

From our HBS studios

Located in a remote area of…

New Jersey

This Thursday afternoon

June 11th

The year 2015

Before we get into the current market conditions

Let’s take a minute to look

At some of the factors

That has led up to this point

It has been a crazy couple of months

Many people say…..

The energy market

Has developed a mind of it’s own

After starting out with a mild winter

We got hit with colder than normal temperatures

During the months of

February and March

This helped to push energy prices up

The gas nymex

Came close to hitting $3.00

It also had an adverse effect on Basis pricing

January 2016 basis

Was running over $7.00 a dekatherm

As cooler than expected spring temperatures hit

In April and May

We started seeing prices

Drop

Making the market

More attractive

You could hear the chatter starting ……

Maybe the summer was not going to be

That hot after all

Prices continued to drop

The door was opening

Was the bottom going to fall out

Record storage levels

Were being recorded

Then….

Sometime during

The end of last week…..

The weather gods

Started talking about

Temperatures going into the

High 80s…..

Possibly the low 90s this week

Immediately

The market corrected itself

Ohhhhh

Maybe it is going to get hot after all

Prices started to rise

Nymex jumps 10 points

Next day

Nymex jumps another 10 points

The market is up again

As I bring you this update

As I often say….

Timing is everything

But the old adage

Still rings true…..

What a difference a day makes

Stay tuned for further updates

As reported in NJ Spotlight
 
Tom Johnson | February 19, 2014

Customers not locked into fixed-rate contracts see bills rise, despite promises of cheaper power

Systrum

When Mark Gottlieb signed up to buy electricity from a supplier other than his utility, his promised savings on bills ranged from 5 percent to 15 percent. Instead, bills rose 34 percent over the past 12 months, including a whopping 214 percent increase in his most recent bill, he said.

That last monthly bill came in at $460.95, about $146.86 more than he would have paid if the Little Ferry resident had stayed with Public Service Electric & Gas, rather than switching to Systrum Energy, a relatively new supplier based in Fairview in Bergen County, according to Gottlieb.

“When you make a claim, you have to make good,’’ said Gottlieb, who says he knows something about the issue as a marketing professional.

He and thousands of other customers fell victim to a spike in winter prices, an event that strained the reliability of the regional power grid at a time when typically it is not under stress. It also resulted in steeply higher bills for customers who had switched to energy suppliers but failed to lock in a price for the electricity to power their homes and businesses.

For some energy suppliers, the extreme weather turned out to be equally unfortunate — especially for those who needed to go out in the market and buy the power to supply their customers. Systrum is a case in point.

“When this polar vortex (the weather event blamed for the brutally cold weather) came in, it just killed everything,’’ said Alex Tullo, one of the owners of Systrum, which has been offering customers the option to switch electricity suppliers for nearly four years.

In a span of about eight days in late January, prices rose by up to 10 times to 20 times than in a normal day, Tullo said. “Something like this happened up the chain, it had nothing to do with us,’’ he said.

Tullo pinned part of the blame on energy speculators who took advantage of the weather to drive prices even higher. “This is not something we did.’’

In any event, the supplier passed on those increased costs to its 5,000 customers, the bulk of which have now returned to their incumbent utility, according to Tullo.

Even with the big spike some customers, such as Robert Rashkes of West Orange, said they have seen savings in their electric bills over the past 11 months although that might be eroded when their next bill comes in.

Still, Rashkes, a retiree living on a fixed income, said his last monthly bill jumped $62 over what he would have paid if he had stayed with PSE&G. “Hopefully, they will be able to give me some adjustment,’’ he said.

In the wake of the cold wave, the operators of the regional power grid lifted a cap on what power suppliers could charge for the electricity they produce as a means of ensuring enough plants would run to keep the lights on. It came on the heels of a surge in natural gas prices, in part caused by an inability of some power generators to get the fuel to run their plants.

The problems that some of the so-called third-party suppliers are experiencing underscore the difficulties the state has encountered in creating more competition to lower high energy bills since it decided to break up electric and gas monopolies in 1999. For many, that goal has not been realized, particularly in the residential sector.

Fortunately for most residential customers, the price spikes will not boost their bills. Roughly 85 percent of them are locked into long-term fixed prices offered by the state’s four electric utilities as a means of stabilizing costs for their customers. Bigger commercial customers may have more problems if they are not locked into fixed-price contracts.

Systrum apparently is not the only so-called third-party energy supplier experiencing problems, according to state officials.

“We have seen an increased amount of calls (from customers) of Systrum and other TPS (third-party suppliers) who chose variable-rate contracts, which are subject to market conditions,’’ said Earl Pierce, a spokesman for the New Jersey Board of Public Utilities. The agency gives licenses to those suppliers, but does not have regulatory authority over the prices they charge their customers.

The huge spikes renewed concerns among consumer advocates who pressed for more oversight of New Jersey’s deregulated energy market. Ev Liebman, associate state director for New Jersey AARP, noted it is one of the reasons her organization backed a recent bill (A-3422) signed into law by Gov. Chris Christie to prohibit alternative energy suppliers from making false and misleading claims and making them responsible if consumers lose money as a result.

“Some of these companies may go out of business,’’ Liebman said. “We don’t want consumers holding the bag.  To see some bills triple overnight is bad.’’

Director of the Division of Rate Counsel Stefanie Brand argued recent decisions by PJM Interconnection, the nation’s largest regional power grid, and the Federal Energy Regulatory Commission to lift caps during these winter emergencies is a cause for concern.

“I think this is going to have an impact on prices overall,’’ she said.

The Retail Energy Supply Association, the trade organization representing third-party suppliers, cautioned the recent spike in energy prices is having an impact, particularly on customers without fixed-price contracts. Systrum is not a member of the organization, according to Bryan Lee, a spokesman for the organization.

“RESA urges customers to review and understand if their energy contract is significantly based on variable pricing, as this may leave them exposed to high prices during unusual periods such as we have witnessed this winter,’’ according to Jay Kooper, New Jersey chairman of the organization in an email delivered to NJ Spotlight.

The unexpected turn of events left some wondering whether some energy suppliers can survive, given their liabilities.

Asked about it, Tullo, whose business is family owned, replied, “We’ll see — one day at a time.’’

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.

Best Time

February 14, 2011

When is the best time to buy energy in the deregulated market?

I have heard statements from clients saying, “Let’s wait to July or August and then we’ll look at it.”

This seems to be a common misconception. When buying a commodity, we are dealing with a fluid market.

Prices are constantly changing.

During the last 4 years, we have seen the Nymex go from a high of $13.105 in July 2008 to a low of $2.843 in September of 2009.

What is the Nymex?

The current price of natural gas out of the ground in the Gulf of Mexico to the shores of Louisiana.

When quoting fixed natural gas prices we must add the basis cost, which is the cost of transporting natural gas from the shores of Louisiana to the gate of the local provider (PSEG, SJ Gas, PGW, Peco  etc).

The Nymex is normally used as a gauge to determine where the natural gas and electric markets are at any given point of the day.

Nymex is up, means that gas and electric prices will be increasing

Conversely,

Nymex is down, means that gas and electric prices will be dropping.

This is not necessarily a proportional shift but it is a good indicator.

I went back over those 4 years and looked to see when the Nymex was at its’ highest and lowest points.

Year        Average Cost        Lowest   Month   Highest   Month

2007       $6.376 dth            $5.43      Sept        $7.558    April

2008       $8.437 dth            $6.469   Nov        $13.105   July

2009       $3.475 dth            $2.843     Sept      $6.136     Jan

2010       $3.908 dth            $3.292     Nov       $5.814     Jan

Our goal at HBS is to properly monitor the market swings and to communicate with our clients when the opportunities present the best value.

Dealing with a utility is not like dealing with other contracts in business.

You do not have to wait for the contract to expire.

There is no guarantee that the best opportunity will be available.

As of this writing the Nymex is at $3.93 and it is only mid-February.

Could the market go lower?

Yes..

But there is more of an upside risk!

Prices could easily go higher.

 

How much lower will the market go?

The floor is not determined until it passes

And then it may be too late.

When dealing with a commodity….

Timing is everything!

I often say that a client who buys deregulated utilities is like a person who shops at Syms.

“An educated consumer is our best customer.”

HBS strives to educate our clients and keep them informed,

Providing…

Smart Solutions for Smart Business

If you would like to know more about deregulated utilities and your business call 856-857-1230 or email george@hbsadvantage.com