US predicts lower heating bills this winter
US as a whole may have lower heating bills, however, in the article details the Midwest; Illinois, Indiana and Michigan are forecasted to have a colder than average winter.
Frosty is coming to Town!
Find the full abc news article, “US Predicts Lower Heating Bills This Winter”
Duke Energy proposes plan to modernize electric grid
Duke Energy’s proposal for maintaining/updating their electric grid in their franchise service area of Indiana is a great example of a regulated utility’s typically large improvement process.
First step; maintain the current system without improvement for as long as practical. This is usually cost effective in keeping rates low but comes with the cost of more frequent outages and high system maintenance costs.
Second step; offer to upgrade an outdated (in this case a century old) technology. After nearly 100 years without significant changes, you would think there would be benefits in replacing old technology. The highlighted benefits would be expected; however, note the absence of any measurable benefits.
Third step; get paid. Regardless of what benefits actually occur, Duke will be guaranteed 80% recovery of their costs (not estimates, but what they actually spend). The remaining 20% will be included in a new filing that is subject to regulatory review. The regulators could disallow recovery of this 20% if they found Duke did not spend the money prudently or that the intended benefits did not materialize.
Bottom-line, this will most likely be approved. The rates will increase and service should be improved. Correlating cost vs. benefits is always a challenge.
Indiana is an outlier in the area, as they do not have customer choice for their electric service as neighboring states do. One would hope that with consideration of a modern electric grid, a modern energy choice program would precede it. And, with a modem energy choice program, there is no rate increase.
Realgy offers electric choice in Illinois where the average savings is over 8%.
Read the full Intelligent Utility article “Duke Energy Indiana proposes plan to modernize its statewide electric grid.”
Exelon, politics and Illinois’ low-carbon future
This article offers excellent insight into how policy (politics) influences energy and energy costs.
Government is the only entity that can impose priorities on energy. That is, without environmental laws, energy production would be governed by cost and perhaps by convenience.
So when the Government (state or federal) imposes or doesn’t impose a tax or subsidizes an energy utility, it’s important.
Illinois has a history of supporting coal with tax advantages which historically has provided jobs and low energy costs; however, both have declined and could decline further due to carbon emissions and nuclear power.
Illinois has halted its support of renewable energy (created from wind, solar or water) with tax advantages. When they have supported renewables, it has favored larger utility scale renewables over smaller installations.
This article shows how two large corporations are presenting their case for economic assistance from the State of Illinois. Which one do you think deserves assistance?
In the interest of full disclosure, let me say that Realgy has built and operates four solar photovoltaic power plants in Illinois. Realgy received State and Federal tax subsidiaries and would not have done so without them.
Read the full Renewablesbiz article, “Exelon, politics and Illinois’ low-carbon future”
Citizens Energy Group being investigated for Energy Bill practices
Citizens Energy Group in seeking to simplify service for their customers seems to have aggravated an already problematic issue—billing. After aggregating the gas, water, and wastewater in their monthly bill, the number of complaints and the complications in resolving those complaints has sky-rocketed.
How would you react if 20% of your customers hung up because of long wait times when they called in to resolve a billing issue?
The Indiana Utility Regulatory Commission (IURC) has opened an investigation into Citizens Energy billing practices. If you have experienced billing issues, please contact the IURC (information provided below) to have it addressed.
Realgy Energy is a registered energy marketer in the Citizens Energy Select program. Through this program, Realgy offers commercial and industrial customers direct wholesale prices without any utility cost added; the result has been savings. To find out how much you can save through Citizens Energy Select, please call or visit; Service Plans for Citizens Gas
Indiana Utility Regulatory Commission Contact Info
Reference: Docket #44462; Citizens Energy billing inquiry
Read the full Fox 59 article, “Regulators to investigate Citizens Energy’s management, billing practices”
MidAmerican Energy seeks rate increase in Illinois
Twenty-two years without a raise—think about it. That would be very hard. However, utilities do not operate at a fixed cost; they operate as a regulated monopoly (like the game) and receive a fixed rate of return. That is, utilities get to spend what is necessary to provide service and seek approval for those costs. Utilities like MidAmerican earn a regulated rate of return (in business that’s called margin) on everything they spend (subject to approval).
So, although MidAmerican-Illinois (MEC) has not increased energy costs during this time, they have spent $289 million on improvements to the electric grid and their generators. If this were all spent as required to provide service, then MEC which earns about 9% rate of return, would earn about $26 million a year in profit.
So after 22 years, an increase of 21% for residential and 13% for business might not seem like a lot, but remember MEC has no competition and earns profit on spending money to provide service.
Can you avoid the rate increase? The short answer is yes.
Illinois customers of MidAmerican Energy can now participate in the Illinois Electric Choice Program. The idea is simple; provide customers the right to buy their electricity directly from suppliers without any additional cost from the local utility. The result has been savings for Illinois consumers—an estimated $37 billion dollars due to electric competition.
Realgy Energy Service is the first energy marketer registered with MidAmerican Energy-Illinois enrolling customers in the Illinois Electric Choice Program. Additional information is available at Service Plans for MidAmerican.
Peoples Gas parent to be acquired in $9.1 billion deal
Trending: Utilities are consolidating and getting bigger.
Peoples and North Shore, already part of a utility holding company headquartered in Chicago, are being bought by a Wisconsin-based utility holding company.
NICOR is owned by a utility holding company with its headquarters in Atlanta.
The acquisition of Peoples is following a trend of consolidation of regional utilities. The leading argument for consolidation is that redundant “overhead” costs can be consolidated. What consolidation usually means is that the local utility is no longer local. Remember that Peoples, NICOR, and ComEd are not competitive companies eking out an unknown profit. They have a monopoly (much like the game!) where they get to recover their set profit margin on expenses incurred in providing their essential service. That is to say, the more they spend on providing their service, the more profit they make which is why regulators approve their costs.
So consolidation means what? Typically, regionalized services by utilities means a loss of stable local jobs accompanied by higher costs. Remember it’s not a competitive industry. They get a regulated return for delivering energy. That’s why reducing costs does not translate to lower energy costs (note; if they spend less, they make less profit). Consolidating accounting, customer service, and management typically results in longer wait times, longer outage times, and higher returns to corporate shareholders.
The good news is that you do have competition for your energy services. Realgy Energy Services offer electric and natural gas service that is consistently below the utility. We compete for your business, by saving you money. And we do enjoy competing with bigger utilities!
Read the full Chicago Sun-Times article: “Wisconsin Energy buying Peoples Gas parent Integrys for $9.1 billion”.