Connecticut Electricity – State Outlaws Variable Price Contracts for Residential Electricity

Connecticut electricity supply for residential customers will finally be safer to contract. The Connecticut Senate passed a bill this week to ban variable electric contracts for residential customers.

SB 573 as amended provides that, “On and after October 1, 2015, no electric supplier shall (A) enter into a contract to charge a residential customer a variable rate for electric generation services; or (B) automatically renew or cause to be automatically renewed a contract with a residential customer and, pursuant to such contract, charge such customer a variable rate for electric generation services.”

As noted by the language further below, the bill does contemplate that Connecticut electric suppliers will be permitted to change a month-to-month rate to customers at the end of a fixed term contract, but subject to notice requirements and likely limits on the amount of rate increases during such month to month service, as to be determined by PURA.

Existing variable rate contracts would be permitted to continue through their existing term, but could not be automatically renewed beyond October 1.

The bill defines “residential customer” to mean a customer who contracts with a Connecticut electric supplier for generation services at residential premises for domestic purposes only.

The bill would require that before October 1, 2015, the Public Utilities Regulatory Authority shall initiate a proceeding to develop recommendations and guidance regarding, “(1) what type of generation services rate structure is best suited for residential customers who allow a fixed contract with an electric supplier to expire and begin paying a month-to-month rate for generation services from such supplier; and (2) what rate increase is just and reasonable if a generation services rate increase is necessary after the expiration of a fixed contract and such customer begins paying a month-to-month rate.”

The authority shall report the findings of such proceeding to the joint standing committee of the General Assembly having cognizance of matters relating to energy, on or before January 1, 2016.

Senate leadership described the bill as passed yesterday. Technically, the bill was placed on the consent calendar, where passage is assured. SB 573 will await action in the House

Energy Auction Debate Leads to Customer Losses

State lawmakers are in the process of deciding whether or not the retail electricity accounts of Connecticut Light & Power and United Illuminating will be auctioned off to private marketing companies. This is an attempt to raise cash for the state, even though it will cost the 665,000 CL&P customers. Starting on July 1st, these 665,000 customers were expecting reduced rates of about 5-8%. Now, this price cut is not going to happen. This is because the power companies could not guarantee energy traders that they would still have their large customer base for the remaining half of the year. Without this guarantee, they were unable to lock in lower rates. Now these rates will remain unchanged and nobody will be able to take advantage of the lower market prices. The states power procurement manager Jeff Gaudiosi said “even with the specter of this auction being there, we lost all of our buying power for 2013 and into 2014.”

From the perspective of the government, this auction could raise around $80-$100 million, a nice boost to the state budget which is why Governor Dannel P. Malloy is pushing for it. If the auction could bring lower rates to customers, it should be done, if not, it would be a very unsuccessful attempt. If the state were to take this money from the auction, it would basically be a large tax. Private marketing firms are willing to pay significantly more per account, and it is only logical that the paying customers should see some of this money on their end. To put it in perspective, in the year 2000 the market was moved from the power companies to private marketing firms. These marketers have been trying to sell at rates they claim are better than average. 47% of customers have taken that route.

Those individuals who don’t switch will stay with CL&P or UI and will be paying based on a state approved buying strategy. Now the standard offer is 7.615 cents per kilowatt hour at CL&P. Regardless, customers will be paying a monthly bill to either company at the same regulated distribution rate.

According to Malloy, customers would be segmented into blocks of 100,000 and auctioned off as groups. The proposal states that anyone could opt out of the auction and continue paying standard rates. Marketers would not be allowed to charge for switching, and they would have to offer a 5% discount below the standard rate for the first 12 months. As good as this sounds, that 5% is based on the current price, where customers would have seen that as a minimum of savings because of market conditions. This is just an estimate as we cannot know for sure.

 

United Illuminating new Default Last Resort Service Pricing

United Illuminating has filed Last Resort Service Rates for default service customers for the period July through September 2013.

The Last Resort Service Generation Services Charge (GSC) rates for the three-month period beginning July 1, 2013 are as follows, in cents per kWh:

Rates GST & LPT*, Above 500 kW
July (all hours):  8.1150
August (all hours):    7.6940
September (all hours):   6.9270

United Illuminating Announced new GST Time of Day Rate for 2013

United Illuminating (UI), which services Southern Connecticut, published its General Service Time of Day Rate for 2013.

January – December On-Peak Off-Peak

Standard Service Generation 9.6389¢/kWhr 6.6389¢/kWhr

United Illuminating in Connecticut Posts Competitive Supplier Numbers

United Illuminating has posted electric migration statistics as of May 31, 2012.

The growth in the number of customers on competitive supply from the end of April to the end of May was 900 accounts, down from the growth of 1,100 accounts from the end of March to the end of April.

As of the report date, 22,458 business standard service customers, or 58% of customers served, were supplied by a competitive electricity supplier.  The remaining 16,055 customers, or 42% of the customer class count, were still on the UI supply, paying the higher electricity supply rate.  On an annual kWH basis, 79.5% of the business load is with a competitive supplier.

 

 

 

United Illuminating (UI) of Connecticut Files New Default Service Rates

United Illuminating has filed new Last Resort Service rates for the three-month period beginning July 1.

The Last Resort Service rates, applicable to Rates GST & LPT, will be as follows, in cents per kWh

July: $0.056706

August: $0.056496

September: $0.057896

These prices are expected to rise dramatically in October, since gas prices have been rising and the futures market points to prices over a penny higher in October.

Obtain more information on locking in a fixed rate.

 

United Illuminating posts statistics on customer supplier sign-ups

United Illuminating has posted electric migration statistics as of February 29, 2012.

The growth in migration from the end of January to end of February was 740 accounts, versus growth of 862 accounts during January.

Residential migration growth during February, versus the January total, was 691 accounts, up from the January growth of 599 accounts.

Notable in the February statistics is that Xoom Energy has begun serving its first Connecticut electric accounts..

The stats, along with a comparison to January data as compiled by Matters, can be found here (includes individual customer counts and change for each supplier).

UI’s statistics as filed can be found here.

Understanding Load Factor

What is Load Factor?

Load factor is an expression of how much energy was used in a time period, versus how much energy would have been used, if the power had been left on during a period of peak demand.  It is a useful indicator for
describing the consumption characteristics of electricity over a period of time. Customers whose facilities are metered for demand can readily determine the load factor for any given month. Facilities billed at highest peak demand during the billing period should avoid periods of increased demand whenever possible.

How to Calculate Load Factor

The load factor percentage is derived by dividing the total kilowatt-hours (kWh) consumed in a designated period by the product of the maximum demand in kilowatts (kW) and the number of hours in the period. In the example below, the monthly kWh consumption is 36,000 and the peak demand is 100 kW. There were 30 days in the billing period.

Load Factor = 36,000kWh/(100kW x 30 days x 24 hours/day

Load Factor = 36,000 kWh/72,000kWh

Load Factor = 50%

This load factor indicates the monthly energy consumption of 36,000 kWh used by the customer was 50% of the total energy available (72,000 kWh) for use at the 100 kW level.

Why is Load Factor Important?

Electricity Distribution Companies must meet the customers’ peak demand at all times. The demand rate structure automatically rewards customers for improving their load factor. Since load factor is an expression of how much energy was actually used compared to the peak demand, customers can use the same amount of electricity from one month to the next and still cause their average cost per kilowatt-hour to drop as much as 40% simply by reducing the peak demand. For instance, a 25% load factor in the summer would yield an average cost per kWh of 13.2 cents, while an 80% load factor would yield an average cost per kWh of 7.9 cents. Remember, this is comparing two months in which the customer used the same amount of electricity (kWh) with different peak demands.

How to Improve Load Factor

Lowering the facility’s peak demand is the primary step to improving load factor and will reduce the amount paid monthly for electricity.

To determine the potential for improving load factor, analyze billing records to identify the seasons during which the peak demand is the greatest. In general, the greatest demand for electricity occurs on hot days in the summer. While this implies that a large electric load is dedicated to space cooling, it is not necessarily true for every facility. It is always best to observe operations at the facility to determine what equipment may be causing the peak demand. Once the contributing equipment loads have been identified, determine what can be done to sequence or schedule events or processes in order to minimize the simultaneous operation of high wattage equipment.

With a variable index price, what is my price???

The market price charge equals the weighted average of the Real Time Locational Marginal Prices (“LMP”) for the zone you are located in for each calendar month. LMPs are hourly wholesale prices in dollars per megawatt-hour (MWh). Wholesale prices are converted to retail prices by adding distribution losses of 4.48% and dividing by 1000 to convert to dollars per kilowatt-hour (kWh).  To this number you add the “adder” that the electicity supplier charges.

If you are interested in source data for market price charges, you can access New England wholesale LMP data on the ISO-NE websiteVisit our resources page for links to the Independent System Operator (ISO) for your particular location:

At the destination page:

  • In Step 1, select “Load Zone.”
  • In Step 2, select your Load Zone.
  • In Step 3, select the start and end dates you wish to receive .
  • Click “Download CSV” (comma separated values) and save the file locally. You can open the file with any text editor or spreadsheet program, such as Microsoft Excel.

In the data file, the LMP data can be found in the eighth column, which is labeled “Real Time LMP.” The twelfth column, labeled “Real Time Status“, indicates the Status of the real time pricing (“preliminary” or “final”). The monthly price will be calculated and posted after the end of each month, when all LMP data for the prior are final.  This is the number that will be used as the monthly LMP price.

Please note that a single query is limited to 45 days worth of data and that hourly pricing data is only available for the past 12 months.

Why you should have Better Cost Control manage your energy procurement

It is our desire to be the #1 electricity and natural gas consulting company in the Northeast. If not in terms of volume, then in terms of professionalism, integrity and best business practices. We are well on our way!

Many of our clients have attempted to negotiate electricity contracts themselves with the list of electric power companies they find online. After spending weeks trying to compare confusing offers and listening to the biased sales pitch of individual electric or gas companies, they have decided to outsource utility negotiations to us. These are our best references.

The greatest challenge in this business is choosing the right Supplier. There are over 60 electricity suppliers and over thirty gas suppliers, choosing the right one for your business is a daunting and time consuming task.

The owner and president of our company has 9 years of energy procurement experience. His main job is to evaluate the Suppliers and determine who the top 10 Suppliers in the industry are. We have them competitively bid on your business.

We have made a significant investment in developing and training a highly skilled staff specializing in electricity and gas deregulation.

As of July, 2011 we have 350,000,000 kWh under our management. We service all sizes of business clients, and take great pride in giving the same level of service to all sizes of clients, from the Fortune 500 client to the “mom and pop” restaurants.

We are in the business of energy procurement for the long-term. Our core values are Integrity and Professionalism. These are things that we have seen a shortage of in our field.

80% of our clients sign an Exclusivity Agreement that states that we are to completely handle all negotiations and correspondence for and behalf of our client. This is a testimony to our professionalism and energy procurement expertise. It is also the best way for a client to be assured of getting the best service.

Our pricing desk utilizes a variety of web based automation tools. This enables a quick Request for Quotation process, timely negotiations, preparation of Bid Comparison and Savings analysis.

Our desire is to completely manage your Energy Procurement, with as little effort from our Client is possible. At the same time, our energy consultants bring significant business to our Suppliers with the least amount of effort on their part. We make a concerted effort to be “easy” to do business with.  This helps you, the customer, to get the best possible prices on your energy.

Reliability Maintained Through the Heat Wave

ISO New England (ISO-NE) started taking emergency actions Friday under its Operating Procedure No 4 — titled “Action during a capacity deficiency”  — as a result of the high power demand triggered by the heat wave late last week.  That move and the associated warnings that went out triggered a slew of calls from reporters, the ISO’s press office told us. National news outlets carried the story Friday including at least one interview with an ISO press officer on a nationally syndicated radio show.

The first level of emergency response in the ISO’s rules is mostly notification requirements that offer no extra power or demand relief — except the step to “begin to allow the depletion of 30-minute reserve.” That one can deliver about 600 MW, said an appendix to OP4.

The next level can deliver about 550 MW, said the appendix, by dispatching “real-time demand resources in the amount and location required.” At 1:30 PM, the ISO implemented Action Three under OP4, requesting voluntary load curtailment of market participant facilities and office complexes.

PJM breaks record

PJM Thursday broke its August 2006 peak record by delivering 158,450 MW and started releasing alerts for Friday at 7:13 AM that day with a heavy load voltage schedule warning.  That was followed by 54 entries on
PJM’s emergency message webpage ending at 10:55 PM Friday, mostly “post contingency local load relief” warnings.  The purpose of those is to give advanced notice to a transmission owner of the potential for manual load dump
in their area only, explained the PJM website.

Other messages included “non-market post contingency local load relief” warnings, the same message but for non-market facilities.

PJM issued at 11:00 AM an emergency mandatory load management with short lead time for Baltimore Gas & Electric.  “Load reduction is expected to be fully implemented within one hour,” of the alert time, said the PJM website, “and should remain off for six hours unless released earlier by PJM.

Others of the 54 entries included NERC-mandated alerts and letting generation owners boost generation above the normal economic limit — for BG&E, Duquesne Light and Public Service Electric & Gas (PSE&G).

Alerts started back up just after midnight on Saturday with a hot weather alert for the entire RTO, warning the temperature was expected to hit 103°F later that day.  A “heavy load voltage schedule warning was issued
at 7:30 AM and by noon a 60 MW load relief warning was posted for an area of AEP.

The Maryland PSC reminded customers that utilities in the state are not allowed to disconnect service for non-payment during a heat wave.

BG&E, PPL respond

Customers of BG&E were told Friday that members of the firm’s PeakRewards emergency load management program that they were being phased down to the level they had agreed to — 50%, 75% or 100% demand reduction — although they all were cycled to 50% during a transition period, said the firm.

What did they get for that? Participating customers receive bill credits of up to $200 in the first year of participation and up to $100 for each subsequent year, regardless of whether the program is activated.

The program cut peak demand by about 500 MW, said BG&E.

Early figures showed the demand at PPL Electric Utilities (PPL) at 2 PM Friday reached 7,622 MW — breaking the firm’s all-time summer peak of 7,554 MW set Aug 1, 2006 and the all-time winter peak of 7,577 MW set on Feb 5, 2007.  The
firm kept the power on and cited attention to maintenance and inspection, the increasing investments in the grid plus system planning for that.  It plans to spend over $450 million in capital investments this year, mainly to upgrade and expand the grid and address aging infrastructure, the IOU said.

“Investing in reliability means we’re prepared for the hottest days of summer and the frigid cold of winter,” said Gregory Dudkin, senior VP of operations.

The mark set Friday was the sixth day this year peak demand topped 7,000 MW and four of those six days occurred last week.  The others two were June 6 (7,049 MW) and Jan 24 (7,365 MW).

Over the past 10 years, PPL’s average summer peak was 6,949 MW, so Friday’s peak was about 10% higher than the firm’s summer average.

PSE&G has outages

About 6,600 PSE&G customers were without power due to the weather, the New Jersey IOU reported late Saturday morning.  The unofficial peak during this heat wave for the firm was 10,883 MW, set Friday at
about 3:00 PM — shy of the all-time peak of 11,108 MW set in August 2006, said PSE&G.  The utility has additional crews on hand to respond to service interruptions as they occur.  PJM, the regional grid operator, has had adequate power supplies to meet the increased demand.

The utility asked customers to use power wisely and conserve when possible to help the environment and save money.  “Turn off everything you’re not using, including TVs and computers,” said the firm.  The message listed many other actions customers could take including turning air conditioners warmer, using ceiling fans among lots of others.

New York calls DR

Con Edison (ConEd) said Friday it broke its all-time record, reaching 13,189 MW at 4 PM that day, “eclipsing” the all-time record of 13,141 MW set Aug 2, 2006.

DR programs were credited with cutting peak demand by about 500 MW when 3.2 million customers “heeded calls to conserve power.” The utility “saluted” them “and credited them with a key assist in keeping the power flowing reliably.”

The IOU did experience scattered power outages and as of 7 PM Friday the firm had restored power to over 16,500 of the 24,000 customers affected since Thursday.

New York ISO (NYISO) reported Thursday’s peak at 33,454 MW between 4-5 PM, 485 MW below the all-time peak of 33,939 MW set in August 2006.  The peak Thursday was 2 MW above the 2010 peak of 33,452 MW set July 6.

NYISO activated DR programs in the “downstate” region to help manage load between 1-6 PM where over 800 MW of DR is enrolled in the Lower Hudson Valley, New York City and Long Island.
DR was called statewide Friday where over 2,000 MW is available, said the ISO.

“While New York’s power system performed well and sufficient resources were available to meet the higher demand, it’s important for all electricity consumers to heed the conservation advice of their local utility,” NYISO CEO Stephen Whitley said.

Meanwhile, New York PSC Chairman Garry Brown Friday asked New Yorkers to conserve energy to help take stress off the power.  “It is critically important for consumers to reduce their energy use at this time.  Equally important is for our state’s residents to stay cool and stay hydrated as hot and humid weather continues to stay with us.  We must all work together to reduce unnecessary electricity usage during this heat wave.”

Wind keeps blowing

Cape Wind took the constrained power situation as an opportunity to point out its offshore wind power project could help supply clean power in such an event.  The wind farm “planned for Nantucket Sound would have been
running at its full capacity of 420 MW yesterday and today Cape Wind would be running above average in power production,” said the firm Friday, citing wind data gathered both days.

“People sometimes think about the ‘dog days’ of summer and wonder if wind turbines will help,” Communications Director Mark Rodgers said in a prepared statement.  The “data shows us that offshore in Nantucket Sound, those
hot summer afternoons tend to be quite windy.”

In average conditions, Cape Wind will meet about 75% of the electricity demand of Cape Cod and the islands of Martha’s Vineyard and Nantucket, it added.

Comparison of New England and PJM Power Generation Sources

People often wonder why electricity is more expensive in the Northeast versus in the PJM area.  PJM covers PA, NJ, DE, MD, WV, VA, OH and parts of IN and MI.  In a word, it comes down to the cost of the fuel powering their generators.  The PJM uses coal for 40% of their fuel versus NEPOOL uses coal for only 12.8% of their fuel, coal being the least expensive.

Here is the comparison:

Power Sources New England Power Pool System Mix

  • Coal 12.81%
  • Natural Gas 37.59%
  • Oil (Diesel, Jet, Oil) 5.58%
  • Nuclear 30.46%
  • Renewable Sources 5.24%
  • Other, Misc. 8.31%
    Total 100.00%

Power Sources PJM System Mix

  • Coal 40%
  • Natural Gas 29%
  • Oil (Diesel, Jet, Oil) 6%
  • Nuclear 19%
  • Renewable Sources 6%
    Total 100.00%