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.
Polar Vortex created record demand for natural gas
Written by Michael Vrtis, President of Realgy Energy Services in response to the USA Today article “Arctic blasts create record demand for natural gas”
The laws of supply and demand actually work; cold weather broke a 20-year record, energy consumption skyrocketed, and the prices went up.
Lake Michigan in Chicago, Illinois
How high?
The wholesale costs for January 2014 for deliveries into the Chicago market:
- Natural gas went from about $4.40 to nearly $18.00
- Electricity settled at over $0.750, where it is normally around $.035
Supply went up as the weather caused record energy demand and prices subsequently followed. No one went cold as supply kept up to demand; however, without advanced planning, you paid a lot more.
Realgy’s experience goes back to when we set the previous low temperature record. We were prepared for this eventuality, so our customers will pay far less with the use of Realgy’s ManagedPriceTM, storage, and PriceWatchTM.
Any good news?
Groundhogs Day on February 2, 2014 started with a shadow, so we should see 6 more weeks…but we are halfway through winter!
Check out the article in USA Today: “Arctic blasts create record demand for natural gas”
You’ll never hear us whine about the weather
Written by Michael Vrtis, President of Realgy Energy Services in response to the Chicago Tribune article “Feel free to whine over one of the worst Chicago winters in decades”
Raised as a Chicagoan, I recall blizzards that closed schools for weeks requiring trains to haul the snow out of the city! Of course my kids then look at me and ask about what covered wagons were like.
We were the Windy City and when the “hawk” was out, you had to bundle up. We were proud of being the city that worked hard and then worked harder when it was below zero.
The last few winters certainly have allowed us to think global warming was eliminating such winters. However, this winter will be the first winter in at least 10 years that will finish with average temperatures below normal for each month of winter (Nov, Dec, Jan, Feb, and Mar). During winter, especially winters such as this year, it’s important to be prepared for storms at your home, car, and place of business.
Realgy’s experience goes back to the last time winter weather was this extreme. That is why we have all three services in place; 1) a low ManagedPriceTM or NYMEX+ rate that is consistently below the utilities price, 2) storage gas service that makes possible winter gas use at summer gas prices, and 3) our PriceWatchTM service where our traders recommend fixed prices prior to the season (for 6 of the last 7 years this recommendation has been below the average seasonal price).
Realgy prepares for such storms every season. Our preparation is demonstrated by our consistently lower prices that you can rely on.
And, you’ll never hear us whine about the weather.
Check out the article in The Chicago Tribune: “Feel free to whine over one of the worst Chicago winters in decades”
In Response to “Synthetic natural gas from excess electricity”
Written by Michael Vrtis President of Realgy Energy Services in response to the Science Daily article Synthetic natural gas from excess electricity
The old adage; where there’s a will, there’s a way!
One of the complaints about solar, wind and most renewable energies is that they cannot be efficiently stored.
So, with that problem in mind, the scientists get to work.
Zeolites bind the water produced during methanation of hydrogen, thereby increasing the methane yield from the new process. Image courtesy of Empa
Of course, what is capable in a laboratory isn’t always immediately transferable to the “real world”. But give it time.
Realgy invest in technologies that produce energy today that is cost effective and with the lowest emissions possible. The future holds much promise that we will be able to continue to do that in many ways.
Check out The Science Daily article: Synthetic natural gas from excess electricity
In Response to “New Campaign Encourages Michigan Residents to Cut Down on Wasted Energy”
Written by Michael Vrtis, President of Realgy Energy Services in response to the Market Wired article “New Campaign Encourages Michigan Residents to Cut Down on Wasted Energy”
Public service reminders, are normally quite humble. Successful campaigns (forest fire awareness and anti-smoking) began as simple public service notices. Smokey the Bear in now part of our national consciousness and no one likes to be around smokers.
So it could be with energy. The new Michigan campaign seems so simple; energy is a cost than can be mitigated with insulation; use less to heat as leaks are found and eliminated and with more informed purchase plans.
It only takes math to figure it out; spend $100 and save $25 on energy the pay back on the $100 is 4 months.
Realgy offers lower cost ways to buy energy than the utility offers; it only takes math to figure out the savings; talk about NO DRAMA!
Stay warm and do so with math.
Check out the article in Market Wired: “New Campaign Encourages Michigan Residents to Cut Down on Wasted Energy”
In Response to “The global oil industry: Supermajordammerung”
Written by Michael Vrtis President of Realgy Energy Services in response to the Economist article The global oil industry: Supermajordammerung
The energy industry includes some of the largest companies and business entities in the world. Energy is by far the largest traded entity in the world (probably next to money!).
Realgy Energy Services represents a small piece in that picture but we witness the changes in the industry. In reading the following article the comparison between what goes on at the largest part of the energy industry is also apparent below.
Consider the following:
The major oil companies purposely outsourced technical expertise to service companies.
Countries with oil and gas resources had new found leverage against the majors; the ability to hire technical services were met with ready available financial resources (internal or external). The result; the majors were pushed out of some of the most developable oil fields in the world.
So the majors have to look elsewhere to keep their business operating. Which means they explore and develop in ever more remote locations (deep water gulf).
Analogous is States wanting to reduce the cost of energy for their residences/business (think of them as the countries). The utilities are the majors. So when regulators/States sought leverage over the utilities to lower costs; the creation of customer choice programs enabled the technical ability that existed in the marketplace (energy traders and schedulers) to directly serve consumers at a scale that allowed the energy marketers’ businesses to grow and flourish.
In both cases the consumer of energy has benefited from lower cost energy.
Check out The Economist article: The global oil industry: Supermajordammerung
Greenhouse gas emissions are decreasing thanks to Natural Gas
According to the EPA Press Release on October 23rd, greenhouse gas emissions are decreasing due to an increased use of natural gas in power generating plants. Utilities have shifted from using coal to using clean burning natural gas, a major factor in causing a decrease in carbon emissions.
The EPA collects annual greenhouse gas information from over 8,000 facilities including power plants, gas and oil production and refining plants and landfills. The EPA’s Greenhouse Gas Reporting Program, which started in 2010, collects facility-level greenhouse gas data from major industrial sources across the US.
Greenhouse gas emissions from power plants have decreased 10 percent in two years. This decrease is largely due to electricity generation switching from coal to natural gas, as well as a slight decrease in electricity production.
Sources:
United Sates Environmental Protection Agency, EPA Releases Greenhouse Gas Emissions Data from Large Facilities
The Washington Free Beacon, Feds: Natural Gas Production Decreasing Greenhouse Emissions
U.S Energy Information Administration, U.S. Energy-Related Carbon Dioxide Emissions, 2012
In Response to “10 US natural gas export projects you should watch”
Written by Michael Vrtis President of Realgy Energy Services in response to the CNBC article 10 US natural gas export projects you should watch
This article is recognition of the “game changing” affect that natural gas fracking has had on the US.
As recently as 5 years ago; the talk was about importing natural gas. A slew of LNG terminals were proposed to import liquefied natural gas (LNG).
Today, not 1 of those proposed LNG import terminals is on the table or under permit. Rather there are over 15 LNG terminals being proposed or under siting consideration ALL to export LNG.
Quite a turn of events that technology has brought to the US and the world.
Check out the CNBC article: “10 US natural gas export projects you should watch“
Realgy Proposes $2.6 Million in Savings for Indianapolis Public Schools
PRESS RELEASE October 16, 2013 | By: Realgy, LLC
INDIANAPOLIS, Indiana, October 16, 2013 – Indianapolis Public Schools (IPS) has issued a request for proposals for natural gas to serve its 90 schools. Realgy Energy Service, a wholesaler or third party supplier in the Citizens Gas Energy Select program responded with a proposal that would have saved the school district over $2,588,000 for the last 3 years.
“We are thrilled to be able to offer IPS nearly 3 million dollars in savings,” said Michael Vrtis, President of Realgy Energy Service. “We submitted our proposal and even if we are not selected, the savings IPS can expect to receive from purchasing their natural gas directly from a supplier, without any Citizens Gas markup, will provide significant cost reductions.”
The Energy Select program was initiated by Citizens Gas to “reduce the energy cost of Citizens Gas customers.” This was in keeping with their charter which states; “We maintain the lowest possible rates with sound financial management.”
The Citizens Gas Energy Choice program is not well known but it provides all municipal, commercial, and industrial customers a choice between purchasing their natural gas from Citizens Gas or directly from a registered third party supplier of natural gas such as Realgy Energy Services.
In April 2009, Realgy Energy Services received approval as a third party supplier in Citizens Gas. Unlike other suppliers, Realgy Energy Services extends customer choice to commercial and small businesses.
“The benefits from receiving your gas service with Realgy Energy Services as your wholesale supplier instead of Citizens Gas has been demonstrated every month over the last 3 years,” said Michael Vrtis, President of Realgy Energy Services. “From November 2010 through to October 2013, Realgy Energy Services has delivered nearly 16.79% savings compared to purchasing from Citizens Gas. For the average commercial customer that is an annual savings of $7,120.86.”
The bidding for natural gas service was opened October 16, 2013 with service expected to begin January 1, 2014. Additional information on the bid and the bid results can be obtained by contacting the IPS Purchasing Agent at 120 E. Walnut Street, Rm. 117 Indianapolis, Indiana 46204.
Realgy Energy Services is an energy marketer serving retail customers in Indiana, Illinois, and Michigan. They began serving Indiana customers in April 2003; since that time they have a perfect record (certified A+) with the Better Business Bureau; http://ct.bbb.org and no complaints before the IURC http://www.in.gov/iurc or OUCC http://www.in.gov/oucc/
Contacts:
Michael Vrtis
President
Realgy Energy Services
860-233-2270
www.realgyenergyservices.com
Nicole Werner
Media Contact
Realgy Energy Services
860-233-2270
www.realgyenergyservices.com
In Response to “Analysis: Arctic chill exposes weakness of U.S. natural gas system”
Written by Michael Vrtis President of Realgy Energy Services in response to the Reuters article Analysis: Arctic chill exposes weakness of U.S. natural gas system
As Berkshire Hathaway CEO Warren Buffet said about the financial crisis; “You don’t know who’s naked until the tide goes out.”
Same goes for any extreme event; with this current arctic blast the need for heat has exposed how market forces and planning work in the natural gas market.
Nobody did without gas, but some had to pay more. The alternative is to build pipelines and storage to provide for gas to accommodate such very extreme weather (last time was over 20 years ago) and incur the cost of that infrastructure in higher transportation and delivery rates.
Realgy provides fixed pricing and our ManagedPriceTM and PriceWatchTM services to shield our customers from the sudden price risk of such events.
Supply and demand worked and the price is already moderating with the temperatures and everyone stayed warm that had gas; doesn’t sound like a very weak system to me; but certainly improvements are warranted in places.
Stay warm
Check out The Reuters article: Analysis: Arctic chill exposes weakness of U.S. natural gas system