Sticker Shock

March 7, 2013

Just when everything

Seems to be going along

Quite well

There always seems to be something

That snaps at you…

That brings you back to reality

In this case

I am speaking

About electric supply prices

Over the past year

Electric prices have been at…

Their lowest level

In the past 4 to 5 years

There were times I would have to

Double check with our providers

To verify the prices were correct

That is how low they were

Then came January 2013….

PSEG is doing an upgrade of their

Network Integration Transmission System

To the grid

This has proved to be very costly

And the Federal Energy Regulation Commission

Has agreed to allow this cost

To be a pass thru cost

To anyone buying electric in PSEG territory

It is known as the NITS

And

This has added anywhere from

3 to 5 mils onto the supply cost

3 mils ( 3/10ths of a penny) or

5 mils ( a ½ a penny)

Doesn’t sound like much

But multiply it by your annual Kwh

Add it adds up very quickly

On top of this…

As the demand for electricity increases

The companies generating the electricity

Are asked to generate enough electricity

To ensure there is enough electricity

In reserve…

To maintain

Reliability on the power grid

The generating companies said

No problem

But it is going to cost you more

As a result…

To maintain the capacity needed

For reliability

The capacity payments jumped 65%

From the prior year

This cost also

Has been tacked onto

The electric supply cost

We have seen this add an additional

5 mils….

Even up to a penny

To the supply cost

These additional costs

Effects all commercial and industrial users

Whether they buy electric from the local providers

PSEG or AC Electric

Or

They are buying electric from a

3rd Party deregulated provider

The deregulated electric market

Is still offering a better opportunity

For savings

Over the Local provider supply cost

But there is sticker shock

We find the clients saying….

Yeah……

But our cost has been……

For the last year or two

I guess it was too good to be true

Don’t let the events described scare you

We keep using more electricity

Thus the demand for electricity increases

There are still real opportunities

For savings

It is just that the bar has risen for everyone

We are finding the best savings opportunities

In the longer term electric renewals

This softens the 65% capacity increase

For capacity cost return

To their prior level of cost

As of Jun 2014

To learn more….

Feel free to contact us