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Natural Gas Collapses – “This is Panic Selling”

Panic is usually not a “good” thing. But, panic can be used to highlight extremes.

Last winter (2013); “Polar Vortex” came into most people’s vocabulary. Bitter cold extended over most of the continental United States. The result: a panic to higher spot price for natural gas. Recall supply and demand. The panic occurred due to “bottlenecks” in supplying natural gas and electricity.

This winter (2014) began yesterday (December 21, 2014) and the panic has resulted in natural gas prices dropping about 35% since end of Nov 2014. The reason: it’s not as cold as expected and the forecast is about Normal or average winter cold. So traders sold their position in natural gas (the NYMEX futures).

Volatility of natural gas is nothing new. So, if you are an end-user, what should you do? Look ahead…

1.      If you didn’t already, think about locking in your Feb and Mar 2015 price. Recall the old adage; Hogs get slaughter, pigs live on.

2.      Do not lock in a long term (beyond 6 months). Summer prices have not moved as much as this winters.

3.      Talk with your supplier about what this means for your 2015 budget.

Do not think like a trader and try to buy at the bottom; the reasons are many and the benefits are few (compared to the downside). Instead, look at what this means to your budget and plan accordingly.

Realgy is a full-service energy provider and would appreciate an opportunity to speak with you about your energy needs.

http://www.cnbc.com/id/102289402

 

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COMED and Ameren Raise Rates

Ameren and COMED have raised their delivery service costs. The following increases will take effect in January 2015:

Ameren up 17.4%

COMED up 11%

MidAmerican announced last month an increase of nearly 11%.

Realgy Energy is a wholesale energy provider that allows you to purchase your energy without the utility markup. The result; we save our customers money.

Additional information on our service is available at;

For COMED: http://realgyenergyservices.com/service-plans-53/

For Ameren: http://realgyenergyservices.com/service-plans-57/

For MidAmerican: http://realgyenergyservices.com/service-plans-58/

We serve residential and commercial customers.

The following is a link to the news announcement

http://www.thenewstribune.com/2014/12/12/3537665/ameren-comed-get-ok-to-raise-rates.html

 

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How to Get a Good Deal from an Energy Marketer

I am often asked how to get a “good deal” in choosing an energy supplier?

In the past, my answer typically began with an explanation of how “deregulation” or “customer choice” developed (which gets me glassy-eyed looks), which was followed by general advice such as: determine the quality of supplier; review the terms and conditions and then the pricing.

However, as we are having renewals with our customers reoccurring for the 4th, 5th and 6th time, I think what these customers have told me is more relevant….

In addition, during our 12+ years we seen many, many processes from consultants, aggregators or in request for proposals, I have consolidated these experiences into what I believe is a list of best practices;

1. Assemble a copy of all your bills (either electric or gas) including the following (this will help you eliminate or question what a marketer sends you in step 2).

a. Identify the energy cost on the bill(s).
b. Identify the delivery cost on the bill(s).
c. Add up the total energy used (either kwh for electric or Therms for natural gas) for 1-12 months, pairing each month with the energy cost (the delivery cost will not change).

2. Contact marketers and ask them for a proposal for service.

a. A list is available at: http://realgyenergyservices.com/customer-services/web-links/ under each utility.
b. Eliminate the ones who do not reply.
c. For ones who reply, ask for a comparison for at least the last 12 months of how their proposal price compared to the utility cost. Again, eliminate those who do not respond.
d. Look at how the marketer’s pricing and the utility pricing are presented.
IN MANY CASES marketers may be above a utility in some months; they should be able to explain why.
AVOID those that are above the utility for 12 months in a row.
AVOID those marketers whose comparison does not accurately show the utility cost.

3. With the marketers who responded and sent you their pricing comparison, ask for their terms and conditions (contract or Agreement). Read their agreements paying special attention to the following;

a. Pricing; is it defined, how long does it last, and what happens when it ends?
b. Quantity; if you’re buying a fixed price make sure it says how much gas you’re buying at the fixed price and what happens if you use more or less than that amount. If you’re buying a variable rate, it should state it’s for all your usage or “open” quality.
c. Renewal; when do you have to give notice to terminate, what happens if you don’t?
d. Additional Services: is storage included, what about changing plans (from variable to fixed), taxes, service fee, online access, answered customer service (vs. automated attendants), etc. Some additional service is worth the price, some are not.

While not an official step, there are good reasons to eliminate a marketer from consideration (in other words, absolutely avoid), such reasons include;

 a. No trade references or BBB accreditation.
b. An initial rate (fixed or variable) that lasts only 1-6 months and renews which is followed by a different (perhaps) vaguely defined price. These are known as “teaser” rates and will inevitably cost you more than the utility.
c. Language that doesn’t make sense is not clear in its intent or clearly favors the marketer.
d. A renewal date scheduled during the winter or summer. Make sure you can terminate your agreement for natural gas or electricity in April or May. This will give you the best period to switch or renew during a “low” energy usage period when pricing is more stable and you will not be under pressure to continue the agreement.

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Natural gas prices have changed 25% in 4 weeks!

Does the words “Polar Vortex” strike fear into you?

Polar Vortex 2014

If so, this CNBC article, Wild ride for natural gas signals volatile winter ahead, describes record production of natural gas and the forecast of colder weather similar to last winter.

So, the winter forecast is cold and there is abundant natural gas…..the question is at what price.

To avoid the uncertainty of winter gas prices Realgy offers:

Storage service’ “Winter gas at Summer prices” and PriceWatchTM (fixed price)

Please contact our Customer Service department for additional information at 877-300-6747 x1000

 

Read the whole CNBC article “Wild ride for natural gas signals volatile winter ahead

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Tell Ameren to open up their natural gas service to Customer Choice

So Ameren wants you to believe that you are paying a “low” “stable” price for your natural gas. Well, if you compare their cost to the entire United States, they may have a point.

However, if you compare to your neighbor or local supplier you are paying more. That is; if your neighbor or business is with Realgy Energy Services.

Ameren is trying to retain its regulated monopoly position in natural gas by putting out these press releases saying; “we are AVERAGE!”.

So compare what happened in Illinois when electricity was opened to customer choice: the State of Illinois has saved $37 billion with Energy Choice; that’s compared to what you would have paid by staying with the utility (like Ameren, COMED, Peoples, etc).

Specifically Realgy Energy Services customers over the last 36 months have saved over 14.7% compared to Ameren; that is over $889.00.

 

 

Let them know you want the same choice for natural gas as you have for electricity. ICC contact info: Torsten Clausen, Director tclausen@icc.illinois.gov

So as Ameren promotes being average in the USA, you can look to be better and tell Ameren to open up their natural gas service to Customer Choice.

happy_halloween_haunted_orange

 

Read the full Ameren Media Release, “Ameren Illinois Customers will see natural gas prices lower than national average for a second year

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