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.

I think we just dodged a bullet! Last week the meteorologists were having a field day tracking this massive storm that was supposed to hit the east coast. High winds, heavy rains. Normally, when we get a bye, the storm sweeps out into the ocean. This storm actually went inland, west of the I95 corridor. Sad to say, they did get substantial flooding.

Why am I talking about the weather, you may ask? Because this is my article, I can choose a topic. Seriously! … Because weather plays a very big part of monitoring natural gas commodity cost.

The current natural gas prices are still the lowest they have been in the last 4 years. September’s NY Index price (the price that providers buy gas) was $.39 cents a therm compare this to $1.41 in July 2008. Quite a difference! Why, you may ask?

First of all, natural gas storage levels continue to be at a 5 year high. Add to that, the shale natural gas that been found in western PA. They are saying this could provide natural gas to the US for the next 100 years.

It is the old supply and demand theory, until the market deems it appropriate to ignore.

For now, market activity show that this is a great time to be buying gas in the deregulated natural gas market. Remember, that since deregulation, the local providers are no longer in the supply business. Therefore they charge you a default rate, which in normally higher. They buy natural gas wholesale and bill their customers’ retail.

HBS puts our clients in a wholesale position. Our clients are finding saving from 10% upto 20+%, depending on who your local provider is.

Since 30% of the electric is generated from natural gas, it also plays an important influence to the current market electric prices. They are also at a 4-year low.

To qualify your commercial natural gas or electric bill should be a minimum of $3000 a month each. Many of our clients are finding substantial saving in the deregulated utility market.

Should you like to know more about savings in the deregulated natural gas and electric market email george@hbsadvantage.com or call 856-857-1230.

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

The deregulated utility market has presented a great opportunity for savings over the last year. For the first time in 3 to 4 years, market prices have been less than the providers’ prices, aiding in a windfall to those looking to save money on utilities.

 If you have been tracking natural gas prices, you would see that the market has dropped close to 20% since the end of June 2010.

 Natural Gas

With the steady fall of natural gas prices, HBS has been advising clients to float the market index position to take advantage of the current market prices. If you are a PSEG customer and chose to float the wholesale market over the past 12 months, you would have realized a 17% savings. Not bad!!!  South Jersey Gas clients would have saved 8%.

When speaking to our clients, we still offer an option to fix the price for a 12-month period, however it doesn’t make too much sense to fix a price that is actually higher than the price to compare that the clients have been paying over the last 12 months. Why is the price higher? Because the future market still shows that prices will go up.

Some clients may choose to fix the price for they want certainty in their cost. They do not want to be effected by market fluctuations. However if you lock the price, you are unable to change the price should the market continue to go down. By floating the market index, you can take advantage of the lower price and should the market turn and start to shoot up, you will have the option to lock in a price at a later option.

Electric

The electric market is directly affected by the natural gas market prices for 30% of electricity is generated by natural gas. So natural gas is commonly used as a market indicator. With the current fall of natural gas prices, electric prices continue to fall and have become even more competitive.

The electric market is completely different than the natural gas market. While natural gas prices change monthly with the local provider based on market conditions, the electric prices are fixed from June till May.

Every February, the state holds an auction for those selling electricity in New Jersey. The local providers buy electricity on the open market and blend the results with the electric it has purchased over the last 2 years. So the current market prices that the local providers charge are based on a blended price from purchasing electric over the last 3 years. They take these results and then present a proposal to the BPU (Board of Public Utilities), as to the summer rates (June till Sept) and winter rates (Oct to May) they wish to charge. Both the summer rates and winter rates have defined on-peak and off peak pricing.

As a result each account is charged differently based on their usage. A company with more off peak usage will actually be paying less than a company whose prime usage is during the daytime when on-peak charges are used.

Fixing your electric cost in the deregulated market offers a flat rate pricing no matter when you use it. This has offered a great savings opportunity due to the current market downturn. HBS clients are realizing saving from 10% to 20% on current flat rate pricing.

Should you like to know more about saving in the deregulated utility market, email george@hbsadvantage.com or call 856-857-1230.

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

 As reported by Pennsylvania PUC

Electric customers in Pennsylvania were among the very first in the United States to have the ability to choose the company that supplies their electricity. You may be able to choose your electric generation supplier (EGS) in areas where competitive electricity supplies are being offered. Consumers may be able to secure supply rates below the prices offered by their utility. Generation supply costs comprise the majority of the average electric bill. Consumers are encouraged to proactively engage competitive suppliers – whose price is unregulated by the Pennsylvania Public Utility Commission (PUC) – to obtain pricing information for the generation portion of their bill. Competitive offers may not be available in all areas.

The PUC has engaged consumer advocates and industry experts in efforts to mitigate any price increases in future electric generation prices. The PUC has been working to educate consumers; develop strategies to remove barriers for suppliers providing competitive electric service; approve phase-in or pre-payment plans and direct all utilities to file such programs if electric rates increase by more than 25 percent; update low-income programs that provide customer assistance; and implement default service pricing that reflects the least cost to consumers over the long term. We also are continuing to implement reasonable, cost-effective programs that consumers and companies can implement to conserve energy or use it more efficiently.

Why are there rate caps, and why are they expiring?

Under the 1997 Electricity Generation Choice and Competition Act, electric rates – which are comprised of generation, transmission, and distribution – were capped to ease the transition to competitive markets.

The 1997 law allowed residential customers to have direct access to and purchase power from independent EGSs, while still having their electricity physically delivered by electric distribution companies (EDCs) regulated by the PUC. The law also permitted the EDCs to recover “stranded costs.” Stranded costs include investments in infrastructure made before the law was passed that may have become uneconomic and unrecoverable in a competitive environment. With limited exceptions, once rate caps expire, the companies can no longer collect for stranded costs.

In exchange for the recovery of stranded costs, generation, transmission and distribution rates were capped at 1996 levels. The caps on transmission and distribution rates all have expired. After litigated proceedings before the PUC, the generation rates were extended for many of the electric companies. As determined by those proceedings, all utility rate caps will expire by Jan. 1, 2011.

 

Caps 

Company

 

 

Generation Rate Cap Status

 

 

% of PA Ratepayers

 

 

Citizens Electric Co.

 

 

Expired

 

 

0.1

 

 

Duquesne Light Co.

 

 

Expired

 

 

10.6

 

 

Pennsylvania Power Co.

 

 

Expired

 

 

2.8

 

 

Pike County Light & Power Co.

 

 

Expired

 

 

0.1

 

 

UGI Utilities Inc.

 

 

Expired

 

 

1.1

 

 

Wellsboro Electric Co.

 

 

Expired

 

 

0.1

 

 

PPL Electric Utilities Inc.

 

 

Expired

 

 

24.6

 

 

Metropolitan-Edison Co.

 

 

Dec. 31, 2010

 

 

9.5

 

 

Pennsylvania Electric Co.

 

 

Dec. 31, 2010

 

 

10.6

 

 

PECO Energy Co.

 

 

Dec. 31, 2010

 

 

27.8

 

 

West Penn Power Co.

 

 

Dec. 31, 2010

 

 

12.7

 

 

 
 

What will happen once the generation rate caps expire?

The PUC expects that customers may see an increase in their bills after the expiration of rate caps. While Pennsylvania consumers’ rates have been capped, the market prices for electricity have risen. The magnitude of those increases will depend upon market prices when the EDC acquires its power.

Do I have to pay what the EDC is charging for electric generation (default service)?

Customers do not have to pay the EDC prices. They will have the ability to choose between an EDC and competitive supply prices for the generation portion of the bill. An EGS may be able to offer a better price for the generation. Customers will be able to compare the EDC price to a competitive supplier price to find the best option.

The amount you might save depends on issues such as:

• How much you pay now for electric generation supply;

• How much electricity you use;

• How market prices change in the future;

• What products and service are included in the EGS price such as renewable energy produces or other demand side and conservation services; and

• The price offered by the suppliers serving your area.

Who can take part in Electric Choice?

Every electric customer has the option to take part in electric choice, pending the availability of competitive suppliers in the service territory. As of January 2009, the Commission licensed more than 45 EGSs. While the Commission may license an EGS, it cannot force the EGS to offer services.

Can I save money by choosing a competitive supplier?

In the territories where rate caps already have expired, an increase in the number of EGSs offering services to residential customers has occurred. In some areas, the EGSs rate is as much as 10 percent cheaper than the default service price offered by the utility. An EGS may be willing to negotiate on price or other services to entice you into switching suppliers. The Office of Consumer Advocate offers consumers a direct comparison of the utility prices versus the supplier price. You can view the “Price to Compare” at http://www.oca.state.pa.us.

Remember, regardless of who generates your electricity, you will still continue to call your EDC for emergency services and questions regarding your residential service including outages. The quality, reliability, and maintenance of your electric service should not change as it is still monitored by the Commission. However, if you have a question about your generation charges you should first call your EGS.

If I choose a new EGS, can I change my mind and choose another EGS?

Yes. However, you should carefully check the terms of the agreement with the EGS, especially for length of contract and any penalty clauses.

I participated in a pre-pay program with my utility, but would like to choose another supplier. What happens to my money?

The money that you deposited in a pre-pay plan and any interest will be applied to your account, no matter who supplies your electricity.

For further information, contact the Public Utility Commission:

Call

1-800-692-7380

For people with speech or hearing loss, dial 7-1-1 (Telecommunications Relay Service)

Write

PA Public Utility Commission

Bureau of Consumer Services

P.O. Box 3265

Harrisburg, PA 17105-3265

Visit our website

January 2010

 

 

As reported by David Fein  Post-Gazette

For nearly a decade, Pennsylvanians paid the same rate for electricity with no increase in price to account for inflation and global increases in commodity prices. No other commodity in Pennsylvania was price-fixed this way. Not natural gas or heating oil or water.

Yet for some reason, the end of electricity rate caps in Pennsylvania was predicted to be the apocalypse for businesses. But Jan. 1, 2010, came and went, and doomsday never arrived.

In fact, Pennsylvania has a good story to tell when you look back at the first quarter of electric competition in the PPL Corp. service area and look ahead to the opening of the Allegheny/West Penn market locally in 2011.

No less than 27 power providers are competing to serve residents, businesses, schools, universities, hospitals and units of local government where PPL used to have sole purview — and such competition can mean lower rates for customers. As a result, in only three months, 363,000 residential users opted for a new company to deliver their electric needs.

PPL estimates that 55 percent of large industrial users have taken advantage of the competitive marketplace and switched to other suppliers, as well. As important, this doesn’t include the businesses that have weighed their options and exercised their choice to stay with PPL.

After only one quarter in an open electricity market, it’s already clear the entrepreneurial spirit of Pennsylvania is alive and well. Businesses, universities and local governments are making smart decisions that not only help their bottom line, but that also provide stability across several industry sectors during an uncertain time in our national economy.

That level of performance reveals how Pennsylvania is well on its way to having one of the most successful competitive markets in the nation.

States from Texas to New York have opened their electric markets to retail competition but none had shown such immediate and dramatic results. Pennsylvania’s numbers will continue to grow as more businesses and other customers explore an open and competitive market — and as new marketplaces open on Jan. 1 for customers in areas serviced by Allegheny Power, Metropolitan Edison, PECO and Penelec.

While it’s early to forecast savings for Pennsylvania’s electricity customers, we can look to the experience of states like Illinois that have had competitive electricity markets for more than a decade. Over that period it is estimated that retail customers saved in excess of $1 billion. Pennsylvania has made the right decision for the long term.

Competition also has bred the development of new products and services not typically found in closed, monopoly-regulated markets. Today’s market opens the door to new possibilities for businesses to embrace environmentally friendly and cost-effective alternative energy sources such as wind or solar energy.

For example, the Harrisburg Regional Chamber and Capital Region Economic Development Corp. did something many would have thought impossible a few short years ago; it purchased wind energy certificates to power its Business Expo.

New energy companies in the PPL market also are challenging each other on new technological fronts to provide savings for their customers. Businesses no longer have to wait for monthly electric bills to set energy budgets; they can monitor their energy usage on more frequent intervals. This gives businesses the opportunity to plan ahead as to how they use energy, depending on what it costs at any given time.

Energy companies vying for business in a competitive, open marketplace foster innovation and new technology. In time, as customers become more sophisticated in exploiting the power of competition, they will demand greater innovation and specialized services from electric suppliers, and new products and services will be developed that provide greater control over energy usage and how that energy is generated.

The development of competition helps families and businesses control energy costs and allow units of government to preserve ever-shrinking resources. Such possibilities would never have developed under the old regulatory system.

Pennsylvania policy makers have developed a well-structured environment for competition to flourish — which will bring many benefits to Pennsylvanians for years to come.

Our Perspective:

The deregulated market offers great opportunities for savings for those companies that are paying more than $3000 a month for electric. HBS has clients in the PPL territory that are saving over 20%.

Granted the cost may be higher than what you have paid in the past 12 months, but when PA lifted their rate cap in Jan 2010, prices jumped.

The current PPL price to compare is arond $.105 cents per kwh. Depending on your usage patterns and cuurent market conditions, we were able to lock our clients in the $.082 to $.086 cent range.

Starting in January 2011, Peco customers will be joining the deregulated market. For commercial clients, Peco will be making 4 purchases from Sept 2009 to sept 2010. They have completed 3 of the 4 purchases and will be releasing a price to compare shortly.

For more information on saving in the deregulated utility market in PA email george@hbsadvantage.com

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