Michigan Cost Recovery is approved
Michigan Cost Recovery is approved; June billing is approved up to $5.8092 /Mcf
In a contested case, Consumers Energy Company (Consumers) has been approved to recover the costs associated with this winter’s extreme cold including the effect of the polar vortex.
Starting in June 2014, Consumers, will be allowed to recover their winter costs, which exceed $185,000,000.
The cost recovery was contested because Michigan utilities are, under normal conditions, required to submit their costs only once a year each December to cover their costs for the coming year. However, the winter costs accelerated sharply in January, February, and March 2014. Instead of sitting on these costs and paying interest, Consumers requested the Michigan Public Utility Commission (MPSC) to approve the recovery of these costs due to the extraordinary amount that would have to be carried for 12 months. Consumers, like all Michigan utilities, borrows money and repays it, thereby paying interest until the loan is repaid.
With this decision settled, it is expected that the other Michigan utilities will submit their winter costs and begin recovering them rather than waiting until next year and thereby increasing the cost to be recovered.
The Commission decision in whole is below;
As in banking, too big to fail means failure for utilities.
The largest public bankruptcy, the largest private equity buyout funny how those two usually don’t go together.
This is perhaps a tale of how “fracking” and perhaps how a viewpoint that natural gas would continue to increase above the rate of inflation; both were shortsighted.
Read the whole New York Times article, Big Texas Utility Files for Bankruptcy
Justices Back Rule Limiting Coal Pollution
The use of coal in electric generation is an issue where, on a national level, we should determine the optimum balance for the nation’s mix of energy used, air quality, and cost.
In producing electricity, coal plants emit carbon dioxide and other gases/particles that flow along the prevailing winds. These winds blow predominantly from West to East. Consequently, coal generation in the Mid-West accumulates higher concentrations of those emissions on the East Coast. This results in lower air quality and restrictions on what East Coast states can emit because their air is then already considered unhealthy.
The ruling by the Supreme Court will cause EPA to issue rulings that, when implemented, will try to rebalance coal usage (which is still our most abundant fuel) with air quality and cost.
One result will be greater reliance on natural gas for power generation. Generally the emissions are less and costs are less, but depending on a single source of energy (be it coal, wind, natural gas or nuclear power) puts the nation at greater risk of a single event causing widespread interruption.
Take this winter as an example; between January and March 2014 the phrase “winter vortex” was coined to describe a FIRST of its KIND EVENT for the tri-states of Illinois, Michigan, and Indiana. Such severe cold weather caused a simultaneous spike not only in natural gas (and propane) but also in electric costs because 30-60% of peak electricity is generated from natural gas. A move to retire existing coal-fired power plants and replace them with natural gas will further concentrate the impact that severe weather conditions or a natural gas pipeline disruption could have on consumers.
That balance will have to be agreed upon and with it will come a variety of different outcomes.
Please let us know what issues you think should be taken into consideration to achieve a workable balance.
Read the entire New York Times article, “Justices Back Rule Limiting Coal Pollution”
COMPETITION WORKS; to the tune of $37 Billion
The State of Illinois is celebrating, not the ending of winter but the savings from energy deregulation.
Illinois consumers, including residential, commercial and industrials, saved a total of $37,000,000,000 as a result of opening electrical supply to competition.
Realgy Energy Service has been an alternative energy supplier in Ameren and COMED and our customer know the benefits of buying directly from Realgy.
I like the last line; “Competition works.” I guess if it didn’t we would all work for the Government, right comrade!
Read the whole Compete Coalition article, “With $37B in consumer Savings, Illinois Results Deemed ‘Triumph of Market-Based Public policy’”
Realgy’s Winter Settlement Guarantee
In order to demonstrate how committed Realgy is to providing savings; even during a Winter Vortex we are offering Realgy’s Winter Settlement Guarantee.
During this winter’s months starting January 2014, Realgy’s costs were above utility as it reconciled its settlement charges during each month of service. The utilities don’t reconcile their costs monthly. They accrue these costs and then seek to recover them.
So, the utility prices are increasing just as Realgy’s price is decreasing. Historically Realgy’s ManagedPriceTM service offers a lower price compared to the utility’s rate; this was distorted during the winter when Realgy passed through our settlement costs and the utilities did not. Now that the utilities will collect these costs, Realgy will again show significant savings compared to the utility rate.
This Guarantee puts into action Realgy’s tagline:
Invested in ServiceTM
The following is an explanation of how our Winter Settlement Guarantee will work; Winter Settlement Guarantee Terms Conditions
NIPSCO: Winter Temperatures Bring Higher than Projected Natural Gas Bills
NIPSCO is adding up the costs from the Winter Vortex and forecasting higher costs ahead.
Unlike Realgy, who reconciles our accounts each month, NIPSCO will accrue these costs and recover or charge for them later. This accrual method prevents price increase from occurring all at once as it spreads the increase over months.
Realgy’s service in NIPSCO has 10 years of providing consistent monthly savings, except for January and February 2014 we have been below NIPSCO every month but 2 in the last 4 years (48 months). Once NIPSCO passes through their costs our higher price will be like the winter snow; gone and your savings will come like the greening of Spring!
Happy Spring.
Read the whole NW Indiana Life article, January Temperatures Bring Higher than Projected Natural Gas Bills