New Standard Offer Prices for National Grid in Massachusetts

The Massachusetts DPU approved new standard offer electricity supply pricing for National Grid customers for the period May 2013 to October 2013.

Fixed Basic Service Charge in ¢/kWh
May-October 2013
G-1: 6.827
Streetlights: 6.827

Fixed Basic Service Charge in ¢/kWh
May-July 2013
G-2, G-3 May: 7.208
G-2, G-3 June: 7.152
G-2, G-3 July: 7.119

Variable Basic Service Charge in ¢/kWh
May-October 2013
NEMA G-2, G-3:
May: 6.516
June: 7.448
July: 7.626

SEMA G-2, G-3
May: 6.495
June: 7.342
July: 7.583

WCMA G-2, G-3
May: 6.408
June: 7.336
July: 7.575

G-1 in all zones
May: 6.899
June: 7.347
July 7.6861
August: 7.354
September: 6.998
October: 7.030
Streetlights: 6.827

The complete DPU filing can be viewed here.

To protect your business from price fluctuations and obtain the lowest possible competitive pricing, contact Better Cost Control.

Natural Gas Prices – Rising

PEPCO rates in Washington D.C. to Increase 6% in June, 2013

Pepco, the electricity distribution company for Washington, D.C. posted its new summer rates for the period beginning June, 2013.

For General Service Non-Demand customers, the new rates will be as follows:

June – October: $0.08734 per kwh

November 2013 – May 2014: $0.08405 per kwh

At the time of this posting, commercial customers in Washington D.C. can definitely save money with a fixed price electricity contract.  To learn more, contact us.

Visit the PEPCO website.

What is a Load Profile and why is it Important?

A load profile defines how an electricity customer uses its electricity over time. It is created using measurements of a customer’s electricity use at regular intervals, typically one hour, thirty or fifteen minutes, and provides an accurate representation of a customer’s usage pattern.

Since this requires the use of expensive interval meters, for most customers utilities conduct load studies using interval metering on samples of customer groups or segments and use the results to represent the segment’s usage pattern. Unless you have an interval meter, your load profile, for electricity supply pricing purposes will be based on your Rate Code Average Load Profile and your month-by-month total usage.

A basic fact with electricity pricing is that prices are lowest at night and on weekends.  A fixed price is determined by creating a weighted average price for your electricity usage for each interval and the cost of electricity for that time period.  Since nights and weekends have the lowest cost, the more relative usage during these periods, the lower your average cost will be.

Let’s look at some examples:

Residential-Load-Profile

 

This is an average residential load profile.  You can see that the usage peaks are between the hours of 5PM and 10PM, when people come home from work, watch TV, etc.  Usage then drops off, with the lowest point at 3:00AM.  You may say, “All my lights are off at that time!”.  Remember, these numbers are averages of all residential users.  Many are night-owls.  Some work second shift jobs.

What is important to understand is that this is the average load profile that is used when pricing residential electricity.  This graph will vary with your geography, since heating and air conditioning uses electricity, with difference kWH requirements depending on our weather.

GS1-Small-Bus-Load-Profile

This is the load profile for a Small Business customer.  Note that the maximum usage is between the hours of 8:00AM and 4:00PM.  This is when electricity is most expensive, so the average cost will be higher than a residential customer, in most cases.

GS2--Business-Load-Profile

Large Commercial Users will have an average load profile like this one.  Again, note that the maximum usage is between the hours of 8:00AM and 4:00PM, which is when electricity is most expensive.

The primary difference from the small commercial user is that there is a much more significant amount of electricity used during the peak periods.  As a result, the price will likely be higher than the small commercial customer pays, since the weighted average of usage by hour, will be skewed toward the peak hours.

3-Shift-Mfgr-Load-Profile

This load profile is for a manufacturer that is operating with three shifts.

Note that their electricity usage varies very little during the entire 24-hour period.  From a supplier perspective, this is a very attractive load profile.  The high usage during the off-peak hours will help this customer obtain a much lower price, if they obtain a competitive supply contract.  If they do not get a contract, they will be short-changing themselves by not taking advantage of their preferential load profile to reduce their electricity costs.

In Summary, your company’s Load Profile has a major impact on your electricity price.  If you wonder why it is so difficult to simply call a supplier and get a price quotation the phone, this is one of the reasons.  Getting the best price for your electricity supply is more complicated than most people realize.  Just one more reason why an experienced broker can help you navigate the energy procurement process.

 

 

U.S. natural gas futures hit 17-month high as cold lingers

(Reuters) – U.S. natural gas futures rose to a 17-month high late Sunday as forecasts for colder weather and robust electricity generation boosted demand.

Front-month April natural gas futures on the New York Mercantile Exchange rose more than 2 percent to $3.965 per million BTU units in electronic trading, the highest level since October 2011, according to Reuters data.

Gas prices have risen about 25 percent over the past month as lingering winter weather across the country and bigger-than-normal draws from storage have tightened the typically well-supplied market.

New York Capital Zone Electric Rates Nearly Double in Jan and Feb 2013

Nimo Pricing

Electricity customers in the  National Grid NiMo Zone F (Capital Zone) have seen their rates skyrocket in Jan and Feb  from ~$0.06 to over $0.12 per kWh.

In the 2012 Tariff Filing Letter, the proposed action states that:

“The Public Service Commission is considering whether to approve or reject, in whole or in part, revised tariff leaves filed by Niagara Mohawk Power Corporation d/b/a National Grid (“Niagara Mohawk”) that would increase the Company’s electric and gas base delivery revenues by $130.7 million and $39.8 million, respectively, effective April 1, 2013, and make other tariff amendments and accounting changes.”

Customers in Upstate New York should understand that fixed rates are in the $0.055 to $0.065 range for 12 months.  You can completely eliminate price fluctuations by contracting your electricity supply instead of dealing with the volatility of monthly pricing.

To obtain a fixed price electricity price quotation, contact Better Cost Control.  We represent all the suppliers, so you can be assured of the lowest prices with the best contract terms.

New Jersey Electric Rates to Change

The NJ State Board of Public Utilities on Thursday approved the results of state’s annual electricity auction. It sets the wholesale electricity prices that the state’s electric utilities will pay and pass through to all New Jersey customers.

For three of the state’s four utilities, including Jersey Central Power & Light and Atlantic City Electric, there will be a  decrease in supply rates on June 1.  Rates for for PSE&G will be essentially the same.

Average JCP&L ratepayers will see a decrease of 3 percent; Atlantic City Electric customers will see a decrease of 5.35 percent and PSE&G customers will see their average rates increase by .05 percent.

The price of wholesale natural gas, which powers electric plants, is lower than in 2010. Since 2009, average energy costs for  small and medium-sized businesses have fallen about 30 percent, the BPU said.

But whether prices continue to fall in future years is unknown. “We have seen relative price stability in the last couple of years,” Hanna said. “What is going to happen in the future with natural gas prices is very difficult to predict.”  This is why fixed price contracts provide the opportunity to lock in long term fixed prices to protect from increases.

The value of both electricity auctions was about $7 billion, which represents approximately 8,700 megawatts of electric generating capacity.

Making Sense of the Present Electricity Market

Transformer-252-x-575

  • Regional issues are ruling the day, when it comes to understanding today’s electricity market– gas & power correlations remain critical, but we continue to see increased frequency of separation.  There are fundamental factors that are behind this trend:
    • Northeast basis – too much info on this to put in this blog posting, but the short-story is that the region is short gas pipeline capacity and this year’s cold temps and pipeline constraints have caused huge gas spikes to New England (several days in $20-30 range) and to a less extent New York Zone 6 (>$20).  Day-ahead power has moved with gas with some spikes near $200/MWh. This is impacting long-term prices.  Unfortunately, the pipeline constraints are unlikely to be resolved in the near-term.
    • ERCOT Resource Adequacy – this issue is also not going away as ERCOT is expected to remain below is target for reserve margins and the increased offer caps are not expected to resolve the problem.  So do not expect summer premiums to disappear and there will be ongoing discussion on solutions to the problem.  Regulatory news and summer price spikes will both impact forwards.
    • PJM Capacity –the wholesale energy prices in the market remain low, but capacity prices vary greatly within the ISO – rising for most of the West and falling for the East over the next 2 years with certain areaa having exceptional spikes (ATSI).  Note that we have updated capacity charts that clearly illustrate this trend.
    • California Cap & Trade & SONGS outage- ongoing strength in forwards as Cap & Trade has been implemented and there is still tremendous uncertainty regarding SONGS, which has been shut down for almost one year.
  • Customer message:  The overall message is straightforward, but may be difficult for customers to accept since many have had consistent year-over-year price declines since the peak of 2008.
    • Year-over-year declines in gas have stopped with 2012 likely being the bottom.
    • Rangebound gas behavior for the near-term with modestly higher prices possible for 2014.
      • It makes sense that natural gas futures are higher than a year ago, but below long-term averages.  And we expect this to continue.  So don’t count on another spring dip – it is very unlikely to see a repeat of April 2012.
    • Both upside and downside are limited by coal-to-gas, production economics, storage, etc.
    • Regional fundamentals are causing significant regional risks that must be considered.  If you only focus on natural gas, you are exposed to significant regional risks such as New England winter spikes and ERCOT summer spikes.
  • Regional issues may provide a better rationale for customers to contract their electricity now.

PJM Capacity Price Forecast

The PJM Interconnection capacity auction parameters released late on Friday show a likely increase in new gas capacity clearing, increased demand response and a weak demand outlook, all of which could lead to lower capacity prices for delivery year 2016/2017, according to market analysts.

PJM’s annual capacity auction for delivery year 2016/2017 will not take place until May, but the auction parameters PJM posted last week are already giving analysts hints on how the results could turn out.

UBS Investment Research said in a Monday report that it predicts the regional transmission organization price will clear at $124/MW-day, down from $136/MW-day last year, with the MAAC zone clearing at $157/MW-day, down from $167.50/MW-day last year.

Barclays also predicted that this year’s capacity auction results will be “somewhat lower” than last year’s auction but it pegged the prices higher than UBS did, with the RTO price expected to be between $100 and $120/MW-day and the MAAC zone clearing between $130 and $150/MW-day, according to Barclays’ Monday report. Barclays also gave a prediction for the PS North Zone, between $160 and $180/MW-day.

Before each capacity auction, PJM calculates each zone’s capacity emergency transfer limit and its capacity emergency transfer objective and publishes that information in the auction parameters. Any zone that has a CETL less than 1.15 times its CETO is modeled as a zone in the upcoming auction, and the ratio level helps predict the potential for constraints within the zone.  CETL is defines as the Capacity Emergency Transfer Objective and  CETL is defined as the Capacity Emergency Transfer Limit.   An electricity broker adviser such as Better Cost Control can benefit larger customer in taking this information into account when procuring electricity.

Both the ATSI and Cleveland zones were projected at about a 140% CETL/CETO ratio, suggesting they will not clear separately, said Julien Dumoulin-Smith, analyst for UBS, in his Monday report. Meanwhile, the PS and PS-North zones were projected at 102% and 120%, respectively, suggesting those zones will clear at a higher level than the RTO-wide price, he said.

The update cemented UBS’ view that prices will show a “modest downward trajectory” in this year’s auction, Dumoulin-Smith said. Recent changes to Environmental Protection Agency demand response rules and potentialnatural gas capacity exemptions from the Minimum Offer Price Rule could play a part in capacity prices decreasing.

“Updated MOPR prices from PJM confirm a modest jump is necessary to make new gas capacity economic, however all new capacity is likely exempted from MOPR,”Dumoulin-Smith said. “Despite potential changes to demand response bidding rules, we see the EPA recent decision to allow the use of backup diesel generators as limited DR as driving another large increase in DR.”

Barclays also cited the EPA backup diesel generator rule, saying it “did not hurt the prospects for demand response.”

PJM is looking at largely flat demand growth, year-on-year. The footprint-wide peak forecast load for 2015/2016 was 163,168 MW, compared the forecast load for 2016/2017 of about 165,425 MW, up slightly more than 1%.

Furthermore, the slight increase in the load forecast isn’t due to a true rise in demand. The East Kentucky Power Cooperative will integrate its system into PJM in June, resulting in its inclusion as the EKPC zone in the upcoming auction. The addition of the EKPC zone added a peak load contribution of 2,213 MW to the footprint-wide forecast peak load for the 2016/2017 delivery year, according to the parameters.

“The parameters supported the weak demand fundamentals for power in the Mid-Atlantic and Midwest,” Barclays’ report said.

The weak demand, demand response and energy efficiency as well as net capacity are the drivers in this year’s auction, able to cancel out the impact of a higher net cost of new entry, Barclays said.

Barclays expects to see 2,500 MW of new generation, uprates or imports entered into the auction and 1,200 MW of shutdowns or derates regionwide. UBS said it expects to see 700 MW of retirements. Barclays also predicts the auction will see 1,500 MW of new demand response and energy efficiency, compared to last year’s growth of 814 MW.

The installed reserve margin rose slightly in this year’s auction parameters, compared with last year’s auction, edging up less than 1% on the year to 15.6%. The IRM is the level of capacity reserves needed to satisfy the PJM reliability criterion of no more than one occurrence of load lost in ten years, the parameters said. The reliability requirement is used to establish the target reserve level to be procured in the annual capacity auction.

 

Jersey Central Power and Light (JCP&L) Price to Compare Information

PowerLines-630x200

When comparing whether or not to contract your electricity supply, you should always understand that the Price to Compare is for a limited period of time. For JCP&L, there is a summer rate and winter rate.  When you obtain a fixed price competitive contract, your price will not change for the entire contract period, whether that period is 12 months, 18 month, 24 or 36 months.  You are obtaining price insurance. Be sure you know whether the competitive price includes SUT or not, so you have an accurate comparison!  Also consider Green Energy or RECs.

To see the Price to Compare for 2013, click these links:

JCP&L Price to Compare, including SUT.

JCP&L Price to Compare, excluding SUT.

If you would like a commercial electricity price quotation, contact us!

Ohio PUCO accepts results of FirstEnergy auction

COLUMBUS, OHIO (Jan. 23, 2013) – The Public Utilities Commission of Ohio (PUCO) today approved the results of FirstEnergy’s sixth wholesale auction that will ultimately determine its retail generation service rates through May 2016.

During the 17-round auction, held Jan. 22, 2013, four competitive suppliers submitted winning bids for the opportunity to provide electricity to FirstEnergy customers. The auction resulted in an average clearing price of $0.05917 per kilowatt hour for the delivery period June 1, 2013 through May 31, 2016. The results will be blended with previous auctions, and four upcoming auctions to establish retail generation rates from June 1, 2013 through May 31, 2016.

CRA International served as the independent auction manager, and Boston Pacific Company, a consultant retained by the PUCO, monitored the auction process. The names of the winning bidders will remain confidential for 21 days.

Customers continue to have the opportunity to consider competitive options to meet their electricity needs, including shopping for an alternate supplier or joining a local government aggregation group. More information about how to choose a supplier is available at www.PUCO.ohio.gov. The PUCO’s Apples to Apples rate charts provide customers with a snapshot comparison of current electric supplier price options and contract terms. The PUCO updates the charts on a regular basis and verifies each supplier offer to ensure accuracy.

Increasing Use of Natural Gas May Lead to Infrastructure Issues

Natural Gas Pipeline

Inexpensive natural gas is affecting the traditionally favorable cost of coal-fired power plants. With increased shale production, estimates of recoverable domestic gas reserves have surged in recent years.

Natural gas should continue to increase its use in power plants as the EPA creates greenhouse gas regulations for new power generation that will “effectively ban new coal-fired power plants,” ScottMadden said.

“The electric industry is beginning to adjust its generation complement accordingly, as the shale gas boom makes gas-fired power compelling for new generation, at least for the moment,” the firm said.

The nuclear power industry is also facing new concerns as the Nuclear Regulatory Commission moves forward with new requirements move than a year after the Fukushima Dai-ichi meltdown in Japan.

The natural gas industry faces its own concerns, however, These concerns range from public pushback over fracking, to the need to address “aging pipes,” according to the consultant’s report.

Potential unknowns facing the natural gas industry include regulation of expanded exports of liquefied natural gas (LNG). With so many of its nuclear plants closed post-Fukushima, Japan is seen as a growing market for LNG. Meanwhile, back in the United States, there is the potential for natural gas to play a growing role in transportation fuel for motor vehicles.

Pipeline flow capacity constraints are emerging issues for the natural gas and power sectors. To meet a possible doubling of natural gas demand, an additional 24,000 miles of pipeline could be required in the new future. Gas companies will be major players in this future build-out of transportation infrastructure for power generation.