Michigan Gas Costs—set to increase dramatically
With Consumers Energy approval for their “extraordinary rate cost recovery” the other Michigan utilities have quickly followed. Consumers’ June cost is $5.597, compared to Realgy’s price at $5.240 or a savings of $0.357/MCF. Consumers Energy has been approved to charge this cost until April 2015.
Recent filing to the MPSC discloses the following:
DTE/MichCon:
The current price in June is $4.24/MCF. In their U-17332 filings it looks like they are requesting an increase to $5.32 effective August 1.
MGU:
The current price in June is $4.71/MCF. In their U-17331 filings it looks like they are requesting and have been approved for an increase to $5.278 effective the first cycle following the date of the order, June 6.
SEMCO:
The current price in June is $4.62/MCF. In their U-17333 filings it looks like they are requesting an increase to $5.7525 effective July 1.
The full documents are available at: www.dleg.state.mi.us/mpsc/orders/filings
Realgy Energy Services is significantly less than the utility service. Additional information is available at; www.realgyenergyservices/michigan
PJM Backs Duke’s $9.8M ‘Stranded Gas’ Claim
And now the lawsuits over winter’s Polar Vortex 2014 begin. Much like this winter (coldest in 22 years), this is a unique circumstance and would be record-setting.
The players:
PJM—the regional authority that calls on power generators to meet expected and actual electric (power) demand (PJM could represent any utility that was affected).
Duke—owns generation plants (this could be any energy marketer serving customers).
Duke Lee Energy Facility (Source: Bill Spindler, SouthPoleStation.com)
FERC—the federal government overseeing wholesale interstate markets (this of as the referee).
Like all power suppliers when the utility (in this case PJM) called for more power to meet the record demand for electricity (natural gas) the generators had to respond. Duke went out and bought natural gas to generate the electricity but didn’t get paid enough from the electricity (or reselling the natural gas) to cover its cost (plus profit). Therefore, it wants to recover the cost from PJM (think all of us).
Duke is not unique. Every utility did this to every supplier during this winter. Whether it was gas or electric, it worked the same. The utility called for more and the marketers had to respond.
The idea that we (Realgy) could go back to one of the utilities that requested more gas/electricity such as NICOR, Citizens, COMED, Consumers, etc. and say that you asked us to bring more but we didn’t get paid enough so please make up the difference—well it’s laughable. However, Duke thinks it’s not!
Realgy Energy Services is an energy marketer of natural gas and electricity in Illinois, Indiana, and Michigan. We provide direct service without a utility mark-up behind 12 utilities. To learn how much we can save you and the benefits of Customer Choice please see www.realgyenergyservices.com.
Read the whole ROT Insider article, “PJM Backs Duke’s $9.8M ‘Stranded Gas’ Claim”
Illinois continues to use legislation to pursue energy policy
Illinois has current legislation on renewal energy that sets aside a percentage of supply; that is, a percentage each year of the total energy used in Illinois must come from renewable (wind or solar) generation sources. However, the spirit of this program relies on the utilities passing through the costs of acquiring the renewable energy to their customers. Customer Choice, municipal aggregation, and the IPA itself changed how the utility acquires power for their customers (which is dwindling due to choice and municipalization). Therefore the current renewable legislation’s intent has been blunted.
This effort seems to be another bite of the same apple. Renewable energy should be supported by open and competitive process and we are heartened to see that this legislation will be overseen by the ICC. Past legislative efforts have bypassed the ICC’s oversight and expertise in favor of the utilities (real-time metering) or municipalization (allowing towns to aggregate energy purchases).
Realgy owns 120 kw of solar energy in Illinois and invests annually in the creation of new renewable solar projects.
Read the whole Crain’s Chicago Business article, “Here comes the sun: Rooftop solar panels get jump-start in Illinois”.
Chicago homeowners could get ZAPPED
Electric prices need not be confusing. The primary reason we have regulated utilities is for efficiency, no duplicate wires or pipes. Offering electric choice does not change this. Electric prices have always been controlled by rather confusing processes called tariffs (akin to IRS taxes) because it was, and is a regulated monopoly. THE REGULATORS are in charge of the process; utilities must prove they spent money according to the tariff so they can get it repaid. Customer choice does not change this relationship between regulators and the utility; it just adds a new player—the retail energy supplier.
Having energy choice need not confuse customers. The regulators need to continue balancing customer choice against their desire to have a regulated market without innovation or price volatility.
Realgy believes in open competition and easily understood explanations of energy offers. Realgy offers energy prices that show a savings compared to the utility, offers fixed pricing during seasons, and offers to beat or match any competitor’s offer.
Check out our current prices that will show you our price as compared to the utility for every market we serve.
Read the whole Chicago Business article, “Emanuel’s power pact could zap Chicago homeowners”.
Winter Vortex pricing under investigation
The winter isn’t over, at least not for the regulators. Price manipulation was charged during the winter from wholesale generators that bid to supply market power.
The claim is that the power producers withheld some generation (saying it was unavailable due to maintenance) thereby decreasing the supply during some peak demand.
Even though it was record breaking cold, the electric pricing mechanisms were deemed to have worked by the Federal Energy Regulators (FERC). However, that is at the Federal level and the claim is within the regional wholesale pricing.
It’s good to know that oversight is there, not sure if this will cause more transparency in pricing, but at least the cold weather is over.
Realgy has recovered all costs related to this winter’s unprecedented cold. Most utilities are collecting their costs over the next 6-12 months.
Read the full RTO Insider article, “Monitor Suggests Price Gouging by Generators”
“Bait And Switch” Leads to Prison Sentence
Manufacturing companies once practiced this technique of promising one product while delivering something cheaper. In this day and age, this kind of activity is a crime in any business.
This may act as a wake-up call, a “coming of age” issue for the energy industry. Previously there were few energy suppliers and most trusted their own employees to be transparent and honest. The proliferation of energy suppliers combined with the use of third parties to sell has the unfortunate effect of increasing the chances of such dishonesty and greed.
I am glad to see that it was dealt with in a severe manner because unscrupulous practices will continue if not caught and prosecuted.
Energy supply services are unique amongst most other businesses in that regulatory protection as well as consumer protection helps guard against abuses.
Read the full Retail Energy article, “SHOCK: Broker Agent’s Electricity Rate ‘Bait And Switch’ Leads to Prison Sentence”