Natural gas prices have changed 25% in 4 weeks!
Does the words “Polar Vortex” strike fear into you?
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”
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.
Read the full Ameren Media Release, “Ameren Illinois Customers will see natural gas prices lower than national average for a second year“
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”
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”
“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”
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;
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”
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
MI Cost Recovery is coming April 2014
MI natural gas utilities have requested approval to pass-thru the costs of procuring natural gas during this winter. This winter’s extraordinary weather is creating as you can imagine an extraordinary cost increase.
The above link is to the regulatory filings detailing how MI utilities want to recover winter costs by increasing their ceiling rates starting April 2014 which would last 12 months as follows;
Consumers: $5.575
SEMCO: $5.31
MGU: $5.22
Consumers is making an extraordinary request to recover: $90,000,000 in winter related costs.
In Dec 2013 they filed their normal rate case of $704,024,000 which was revised to $793,346,000 or about $90,000,000 due to winter related costs.
Consumers would increase their ceiling price from $4.3962 to $5.5750 (about $1.20 / MCF just for winter). This was intended to start April 2014.
The MPSC (MI public service commission) is recommending approval the MI AG (attorney general) opposes it. If these costs are delayed in getting passed-thru then the carrying cost (interest) on $90 million will cause a larger increase later on!
The other MI gas utilities have filed extraordinary cost increases as well, which include;
SEMCO would increase their ceiling price from $4.73 to $5.31
MGU would increase their ceiling price from $4.77 to $5.22
The only gas utility that did not submit an extraordinary cost increase to start April 2014 was:
MICHCON has not submitted an extraordinary rate increase at this time (perhaps waiting for the ruling on the AG appeal). At present their ceiling will be $4.47.
Realgy has passed along all costs from this winter in the month the costs were incurred. While our cost were above each of utilities, with the release of winter are costs, they are falling sharply and Realgy will be below the utilities starting in May 2014 and continuing for the foreseeable future.
In summary:
MI utility gas prices are going up due to NYMEX price increases starting April 2014.
All but MichCon has requested to recover the costs associated with winter. This increase is being delayed from an appeal by the AG.
The impact of the delay will cause the eventual cost pass-thru to be higher due to the interest charges on the extraordinary costs from this winter.