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
