New Ideas in Lighting Get Closer to Market
So for the last 100 years humans have had two types of light sources: natural daylight and incandescent light from the ubiquitous light bulb (there has been only one type).
Today we still have natural daylight and we still have the light bulb, but we now have choices about the light bulb!
The Finally Light Bulb Company Debuts First Ever Acandescent(TM) Light Bulb. Credit: Finally Light Bulb Company
Bowing to efficiency, the US Government (along with other governments) has banned the sale of the original incandescent light bulb technology.
In its place are technologies that provide light and do so much more efficiently but the light “quality” is a little different (we will all learn about the light spectrum). Some people are complaining about this change in “quality.” We will get over it in due course.
Replacing something so commonplace will, of course, be met with resistance; consider how energy choice was first received! But this innovation and the accompanying options will be exciting and beneficial.
This Times article highlights two new light bulbs! Think about that; after 100 years of only one kind of light bulb, we will now have some five different competing technologies all to do the same thing…only better.
Long live change.
Realgy Energy Service is bringing change; we recently opened up electric choice to MidAmerican Electric in Illinois. We are the first energy marketer authorized to serve this utility market.
Read the whole NY Times article “New Ideas in Lighting Get Closer to Market”
COMED parent company to pay $6,800,000,000 for East Coast utility
As the late Harry Caray, iconic baseball announcer, might say, “Holy Cow!”.
Now we see that Exelon, the corporate holding company which owns the local utilities of Baltimore Gas & Electric and COMED, seeks ownership of the utilities around Washington, D.C. and Philadelphia. This would more than double the customers they serve in COMED.
Utility acquisitions that are not in relatively close proximity to their current customers would appear to offer no benefits to either Exelon or Pepco customers.
This acquisition will be closely scrutinized and I am sure will it will be opposed by several groups.
Exelon previous proposed the acquisition of a large utility group in New Jersey from which they ultimately withdrew due to opposing parties.
I look forward to hearing the rationale of how each local utility (BG&E, COMED, Pepco, and Atlantic City Electric) justifies the way each utilities’ customers are better served by having a larger corporation in charge of it.
Read the whole Crain’s Chicago Business Article “$6.8 billion Pepco buy makes Exelon an East Coast force”
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’”
Chicago electric bills to rise up to 18% in June
Municipalization will not lower prices for consumers.
We have posted numerous articles about how municipalities are offering their residents electricity or natural gas collectively to energy marketers. The idea is that “aggregation” of the residents will provide the marketer the ability to deliver a lower price. If that were the case, no one could beat the utility because the question is who would be a bigger aggregator than a utility? The utility AGGREGATES everyone in the state. Yet, Realgy beats ComEd and Ameren consistently. So why can’t municipalities come in lower?
The difference is cost of service and overhead.
Municipalities require energy marketers to deliver savings compared to the utility, take on billing and collections, and pay the municipality a portion of the margin. The simple fact remains; the cost municipalities want to collect makes them higher than the utility.
So Chicago’s latest deal is a fixed 5.3 cents (however, the ComEd rate hasn’t been posted yet) and the terms won’t include the cost during the highest-demand periods of the year nor the cost of transporting the juice over high-voltage lines from the power plants to ComEd’s local distribution grid. These costs are variable and will add considerably to the fixed price.
The potential upside is $34 per household per year. Homeowners will be looking closely at this offer.
Energy purchasers will start to focus not just on the price but also on the terms. When they do, they will move to be more transparent.
Realgy has a history of offering its MangedPriceTM (which includes variable and fixed prices) that beat ComEd with all costs included.
Find the whole Crain’s Chicago Business article “Chicago electric bills to rise up to 18% in June under new Integrys deal”
Ask FERC to investigate winter price spike
As contained in previous post Realgy Supports a Review of the January 2014 Energy Price Spikes, Realgy is joining CUB and all public advocates in asking FERC to investigate market manipulation of energy prices during the winter of 2014.
Please Ask the FERC to investigate and complete the petition at the bottom of the page; its intention is to ask FERC to investigate as we all have a complaint in common as seen below.
As has been noted in Realgy’s blog, the extreme cold winter weather has driven demand to levels not seen in 20 years. See “Polar Vortex created record demand for natural gas” and “In Response to “Hedge funds bet on US gas shortage as cold boosts demand”. If energy traders, pipeline companies, utilities, or power plant operators manipulated supply so as to cause us to buy the higher price energy it’s against the law. These actions need to be exposed in order to recover any monies already paid.
Realgy promises to keep you informed of this effort.
Realgy does not speculate on price changes
The CNBC article “Natural Gas could rise to $8: Energy expert” is an interview with a natural gas trader. One noteworthy facet of traders’ work is that they speculate on the changing cost of natural gas so as to profit from a price increase or decrease.
This is EXACTLY opposite from what Realgy does.
Realgy tries to buy natural gas so as to deliver the lowest price to our customers. The greatest variable in doing this is the changing volume of natural gas used by our customers.
Consumption or demand for natural gas; this is an instance where the trader and the energy marketer are both dependent on the weather (along with storage). Weather is the greatest driver in how much natural gas will be used; storage allows for a buffer in allowing the gas in storage to be readily available for use.
In the CNBC article, the discussion about the weather affecting consumption (withdrawals from storage equate to higher demand) is accurate. However, the coldest winter in 20 years would create disruption in any market place. So gas prices should rise when demand soars; the law of supply and demand dictates they do.
So the question is, by how much? Should they rise 27% in a day, followed by 15%, etc.? The answer is…probably not. This is when traders’ speculation drives pricing for which ALL users pay.
Realgy works with traders but does not speculate on price changes for natural gas or electricity.
Check out the CNBC article: “Natural Gas could rise to $8: Energy expert”
The First Electric Generator of Its Kind
The Ivanpah solar power plant in the Mojave Desert officially opened Thursday February 13, 2014 after almost four years of construction, and is the first electric generator of its kind.
A field of mirrors at the Ivanpah power plant in California. Jim Wilson/The New York Times
“…focuses sunlight from 350,000 mirrors onto 2,200-ton boilers 339 feet in the air to make steam that drives turbines to produce electricity”
To imagine what this is, put yourself at the beach, you are 6 feet tall (or you’re standing on a beach chair), and you look as far as you can to the horizon; that should be about 4 miles. From this spot on the beach, 350,000 mirrors are spread over a distance farther than you can see (5 miles in all directions) and all those mirrors direct the sun’s rays onto the surface of a boiler that gets hot enough to produce steam which is used to drive a turbine to produce electricity.
That is cool!
It will take bold and imaginative ideas and, while some ideas may prove to be impractical, we will find ways to continue to create energy for the world’s consumers that can be sustained (without damaging the earth for the next 100 years).
Realgy has invested in photovoltaic (PV) solar generation where the sun light is converted into electricity within the solar panel.
Check out the NY Times article: “A Huge Solar Plant Opens, Facing Doubts About Its Future”
Why are natural gas bills so high?
Two factors are at play on your bill; the amount of energy used and its cost. The following example is based on natural gas but electricity would be similar.
| This Year | Last Year | |
| Usage in Therms | 113 | 72 |
| This winter is 13% colder than Normal. | ||
| Gas cost/Therm | $0.718 | $0.420 |
| Average gas prices have more than doubled | ||
| Billed | $81.13 | $30.24 |
| Your bill will be the higher than it has been in the last 5 years | ||
Last year was warmer than a Normal* winter; in fact it was 72% of Normal in December 2012 and January 2013.
So if in a Normal year you use 100 Therms of natural gas, last winter you used 72. This was when the price of natural gas was about $0.420/Therm.
Now consider this December 2013 and January 2014 winter that is 13% colder than Normal.
So you will use 113 Therms. This is when the price of natural gas is about $0.718/Therm.
*a Normal winter is an average of 20 winters
A POLAR VORTEX…now that’s an extreme Weather Event!
Due to the severe weather in the Chicago Area during January 2014, the price of power quadrupled. Fortunately there was no accompanying shortage and, while the cost of power increased, the grid and the generation met everyone’s demand.
The wholesale costs for January 2014 for deliveries into the Tri-State (Illinois, Indiana, and Michigan) area:
- Natural gas went from about $4.40 to nearly $18.00
- Electricity settled at over $0.75, where it is normally around $.035
Realgy will recover the costs related to this short-term power cost increase with a onetime Real-Time Settlement charge on electric bills. This charge covers only the additional costs Realgy incurred for the market power we had to purchase to cover the extreme costs associated during this period. It will appear on either your January or February bills. By contrast, the utility will eventually raise rates (usually limited to two times a year) to cover their costs during this event.
Natural gas bills will look the same but you will notice the bill is higher. While Realgy’s base rate remains low the cost related to each utilities supply management practices imposed by Utility will increase our costs. Each utility limits what we can display on the bill so we can only display on our web site or in your storage report.
The breadth of Realgy’s experience extends back to the last time such an extreme weather event happened, which was 20 years ago. That is why Realgy offers the services we do to help protect our customers. Even though the market wholesale price in Chicago for natural gas and electricity jumped two to four times, Realgy’s average customer will pay less than a 40% increase for January gas and electricity.
Realgy does three things to consistently protect our customers from normal and extreme weather events:
- Managed Plan–a consistent low price to save money compared to Utility
- Fixed Price–through PriceWatchTM, this year (like the last three years) the Realgy PriceWatchTM Fixed Price was below the average winter price
- Storage (except for Michigan)–Winter gas at Summer Prices is a great way to prepay for winter gas with the added benefit that you do so at the summer prices.
Realgy will continue to do everything possible to continue to meet our customer’s expectations to save money on energy and rely on Realgy.
If you did not receive your PriceWatchTM notice this year, now is a good time to update your contact information with Realgy. You can do this by going to realgyenergyservices.com and filling out the Customer Contact Info Update Form.