The Reason Energy Utility Companies are in a Panic

Commercial businesses are often looking for ways to cut costs. One of these costs is energy procurement. Every business needs their lighting and heating, but often are looking for ways to spend as little as possible. Meanwhile, Utility companies are looking to make high profits through selling energy.

Currently utility companies are seeing a flat line in sales and many are starting to worry about commercial customers who are looking to behind-the-meter storage solutions. The only way for utility companies to increase sales levels are to raise the price or the demand charge. By business customers having solar powered batteries to run during specific times their demand charge decreases. This has many utility companies are worried about plummeting profits.

An increase in the price for each kilowatt-hour sold, which needs to be approved by regulators is not ideal for utilities. Conversely the demand charge is a measurement of the highest average 15-minute electrical flow during the billing cycle. If the customer uses a lot of power during a short period of time then these charges will be a larger part of their bill and vice versa. Currently this charge is estimated to be between 30 and 70 of commercial customers’ bills.

According to a recent white paper published by the DOE’s National Renewable Energy Laboratory and the Clean Energy Group for about 28 percent of commercial customers using solar powered batteries to cut their electricity consumption would be advantageous. This not only would decrease electric usage, but also revenue collected from demand charges.  This shift could decrease a commercial company’s bill by as much as $2,000 a month according to one study of a theoretical Big Box retailer.

With these potential decreases in profits it’s no wonder that Utilities are worried about the future of the energy market, while commercial customers are continuing to look for ways to save costs.


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MA Solar Renewable Energy Certificate (SREC) Auction

REC Solar Energy from Solar PanelsFor the second time in less than a week, Massachusetts’ auction of solar renewable energy certificates (SREC) failed to clear on Wednesday, setting the stage for a third and final round. The auction is scrapped when bidding volume is less than the number of SRECs for sale. There are 38,866 SRECs being offered.
The Department of Energy Resources runs the SREC auction as a last-resort to sell unsold SRECs in years when annual supply is greater than demand.

This is the first time that the auction is being held because in 2010 and 2011 the SREC market was under-supplied. In 2012, supply exceeded demand, prompting the DOER to run the auction. The next round is scheduled for Friday. And if that fails to clear, then the SRECs will be returned to the sellers.

The DOER included a last-resort auction as a way of providing some price support to SRECs even when supply outpaces demand. Other SREC markets – without similar mechanisms in place – have typically seen prices crash following an installation boom and stay low until demand catches up. The auction has a fixed price of $300/SREC for buyers and $285/SREC for sellers. There is a $15 administrative fee.

Compliance entities are not required to participate, but the auction has been designed to try and attract buyers. SRECs purchased through the first round have an additional two years of eligibility. They can be used by compliance entities in 2013 or 2014. In the second round, the shelf life is extended through 2015. Longer eligibility increases the attractiveness of the underlying SRECs assuming parties view the $300 price tag as a good investment, calculating that the spot market will eventually be even higher.

Now that the first two rounds have yet to clear, the DOER will conduct its third and final attempt on Friday. On top of the extended shelf life, buyers face another incentive to participate because the DOER will raise the 2014 compliance requirement by an amount equal to the auction volume – 38,866 SRECs – if it does not clear.

A single SREC represents one MWh (or 1000KWh) of electricity.

For Massachusetts customers, this subject is important since the cost of SRECs is a part of the ancillary fees charged to customers.  A fixed price electricity contract, as long as it includes all ancillary fees, will protect the customer from the rising cost of SRECs.  Read more at the website.

You can contract Green Energy even if you already have a supply contract

In an era of  climate change and energy security, leading companies of all sizes are taking responsibility for their environmental impact by investing in a sustainable future. For a long time, a credible environmental initiative competed with the bottom line.  Now the bottom line depends on it.

Even if your company has an electricity contract already in place, you can offset your carbon impact on the environment very inexpensively through the purchase of Carbon Offsets. These will completely offset the carbon impact of whatever percentage of your electricity usage that you desire.  And the cost is so very low.  For instance, let’s say that your company uses 750,000 kWH/year of electricity.  For a fixed cost of $003 per kWH, or $2250, you can offset 100% of your carbon impact.  Or you might choose to purchase an amount that will offset 50%.  The choice is yours.

For larger companies, the cost drops.  If you use 5,000,000 kWH/year, the cost is only $0.0015 or $7500. (prices based on March 14, 2012 market)  Prices drop further as your size increases.  Plus, it is a fixed one-time charge for the year.

Environmental responsibility is important.  Important for our world and important for your company’s image.

If you would like to discuss purchasing carbon offsets, please call us at 860-436-2768 for more information.



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%

Solar Energy for New Jersey Customers – No charge for Solar Panels

Better Cost Control announces a special program exclusively for New Jersey to provide Solar Energy to our residential and commercial customers.  Through our partner, Solar Panels are installed on your building under a 20-year lease.  The customer then pays for electrity at a discount of roughly 50%.  The supplier is 100% responsible for permitting, installation, operation, monitoring and maintenance of the system.

Your benefits:

Going Green makes a good public statement

No investment

50% savings on your electricity for the life of the contract, which is typically 20-years.

You own the system after the term of the contract.

Increases the value of your property.

For more information, contact Steve Garson at 860-436-2768.