Recent Events

The New York Public Service Commission (PSC) action:

The New York PSC has ordered that ESCOs servicing mass market electric and natural gas customers on month-to-month variable rate products must return these customers to default service or “enroll” the customers onto a compliant product under the PSC’s “full stop” of the retail market.

Mass market customers are defined in the order as including residential and small non-residential customers. Small non-residential customers are defined as either a non-demand metered electric customer or a non-residential gas customer with annual gas consumption that does not exceed 750 dekatherms per year or the equivalent.

ESCOs shall only enroll new mass market customers or renew existing mass market customers in gas or electric service if at least one of the following two conditions is met: (1) enrollment where the contract guarantees that the customer will pay no more than were the customer a full-service customer of the utility; or (2) enrollment based on a contract for an electricity product derived from at least 30% renewable sources.”

Energy marketer’s response:

The Commission’s actions today were partly in response to the marketing practices of a few ESCOs. Consumer protection is a key objective for all market participants, including RESA members. The Commission has promulgated myriad rules governing market conduct that can be effectively used to address abusive marketing practices. Rather than exercise its existing authority to penalize rule violations, the Commission instead is seeking to shut down retail competition for all ESCOs, including the majority of suppliers who diligently follow the rules. This action is akin to shutting down the highway in order to stop a few drivers from speeding.

The effect:
The New York PSC has essentially defined what results a business’s product must deliver. Energy marketers must deliver electric/natural gas that beats the utility on price or provide renewable power (something the PSC wants).

So what’s changed?
1. This is not a market place that will allow for customer choice balanced with consumer protection.
2. The PSC has defined the parameters that must be met, therefore defined what can be offered to customers.
3. This may protect consumers from paying above the utility rates (which Realgy fully supports), however, it is a very heavy regulatory action.

Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual energy savings. Service Plans include Guaranteed SavingsTM, ManagedPriceTM, ManagedGreenTM and Index, Fixed pricing.
Additional Information:

http://www.energychoicematters.com/stories/20160224a.html

If your electric bill is too high, you might want to call City Hall and opt OUT of their aggregation offer.

Municipal aggregation in Illinois allowed municipalities to enter into deals with energy marketers to serve as their residents power supplier replacing COMED or other competitive energy marketers. The concept was that municipal aggregation would lower costs; the reality was that municipalities saw it as a way of increasing tax payments. See previous article: http://realgyenergyservices.com/chicago-electric-bills-rise-18-june/

The result: under municipal aggregation residents have paid about 8% more than they would have under COMED!

That is: you paid more than the local Utility, however, the municipalities earned more in fees.

During the same time; Realgy customers paid about 5% LESS THAN COMED.

Competition works in energy like everything else. However, you must pick an energy supplier directly and not one that serves the municipality in collecting fees.

Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual energy savings. Service Plans include Guaranteed Savings^TM, ManagedPrice^TM, ManagedGreen^TM and Index, Fixed pricing.

Additional Information:

http://www.chicagobusiness.com/article/20160220/ISSUE01/302209991/chicago-area-communities-still-shopping-for-power-despite-lack-of

We all know the electric system isn’t rocket science….but explaining how our electric system operates sounds well….confusing.

Enter the US Supreme Court, yep that one.

The court entered a ruling in which they had to understand and rule on the economic and structure of our electric system (from utilities, power marketers, wholesale market, demand response, etc.)

Here is a quick review of their explanation/finds:

1. ….understand demand response, you first need to grasp a key detail: You and I generally pay the same price for every kilowatt hour of electricity that we use at home, but that’s an artificial arrangement that protects us from shifts in electricity’s true price on wholesale markets. This price varies greatly based on the demand for it, and that demand fluctuates constantly — even if we tend to be individually insulated from these market shifts by our utility company, its regulators, and so on.
2. wholesale electricity markets….suppose that at 9 a.m. on August 15 four plants serving Washington, D. C. can each produce some amount of electricity for, respectively, $10/unit, $20/unit, $30/unit, and $40/unit. And suppose that LSEs’ [load serving entities, aka utility companies] demand at that time and place is met after the operator accepts the three cheapest bids. The first three generators would then all receive $30/unit. That amount is (think back to Econ 101) the marginal cost—i.e., the added cost of meeting another unit of demand—which is the price an efficient market would produce. FERC calls that cost (in jargon that will soon become oddly familiar) the locational marginal price, or LMP.
   1. What happens during extreme days when power demands surges (think days of “polar vortex” and 100F/95% humidity). To keep providing power to their customers, utilities and energy marketers must ask their market operator for more electricity. To meet that spike in demand, the operator will have to accept more expensive bids from suppliers. The operator, that is, will have to agree to the $40 bid that it spurned before—and maybe, beyond that, to bids of $50 or $60 or $70. In such periods, operators often must call on extremely inefficient generators whose high costs of production cause them to sit idle most of the time….As that happens, LMP—the price paid by all LSEs to all suppliers—climbs ever higher. And meanwhile, the increased flow of electricity through the grid threatens to overload transmission lines…..
3. “real time pricing” — electricity rate schemes in which individuals will pay more (or — and here’s the big opportunity — considerably less) depending on how they behave during periods of peak demand.
4. “time demand pricing” – electricity rate schemes in which individuals will pay different amounts during different times of the day more (say; 8am-8pm is morning vs. 8pm-8am night)
5. …how demand response can effect LMP….. what would happen if wholesale market operators could induce consumers to refrain from using electricity during peak periods? Whenever doing that costs less than adding more power, an operator could bring electricity supply and demand into balance at a lower price. And simultaneously, the operator could ease pressure on the grid, thus protecting against system failures. That is the idea behind the practice at issue here: Wholesale demand response, as it is called, pays consumers for commitments to curtail their use of power, so as to curb wholesale rates and prevent grid breakdowns.

So the court waded through and came to an understanding that this is all legal and the system it being operated fairly. It sound complicated but it’s supply and demand economics with price incentives to reduce consumption when it gets too expensive to generate or deliver.

Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual energy savings. Service Plans include Guaranteed Savings^TM, ManagedPrice^TM, ManagedGreen^TM and Index, Fixed pricing.

Additional Information:

https://www.washingtonpost.com/news/energy-environment/wp/2016/01/26/the-supreme-court-just-gave-a-great-explanation-of-our-baffling-electricity-system/