U.S. and World Already Affected by Climate Change
Two recent articles seem to indicate an important trend; first, the Supreme Court rules that coal pollution can be regulated and second, the White House publishes a report on the negative environmental effects that fossil fuel combustion is having on our nation and the world.
Only global leaders have the clout to tackle this issue effectively. Everyone desires the jobs associated with fossil fuel production as well as the comfort provided by fossil fuel usage; however, governments are now beginning to understand that the costs to the environment, people’s lives, and the planet are being traded off for these comforts.
As in any widespread change, the adjustment process will start small; consumers will be urged to conserve where possible and attempt to use less. Everyday consumers should make their wishes known and the leaders will listen and follow if they know what is good for them.
Realgy invests in renewable energy (over 100KW of installed solar energy) and provides natural gas, the cleanest burning fossil fuel.
Read the full NY Times article, “Climate Change Study Finds U.S Is Already Widely Affected”
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”
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”
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
In Indianapolis: Cold Weather Driving Higher Gas Usage and Higher Bills
Citizens Energy is passing through the costs for winter as they get added.
Realgy can account for gas costs by the end of each month and has passed through this winter’s costs already.
Citizens Energy like most utilities will accrue the costs associated with this winter and then pass through the total costs over time.
In the past 5 years; Realgy’s INDEX+ service was higher than Citizens Energy in just 2 months; January 2014 and February 2014. Once Citizen Energy passes through their costs due to winter; Realgy’s higher cost for those two months will disappear. Just like the snow.
Think Spring.
Read the whole Citizens article, Cold Weather Driving Higher Gas Usage and Higher Bills
Michigan Sets Expedited Review of Polar Vortex-Driven Hike
As anticipated the costs associated with this winter’s weather is starting to be tabulated and will be passed through to customers who receive their gas service from Consumers.
DTE, SEMCO and MGU are all following suit. The same reason will be cited;
“Significant, unanticipated increases in the market price for natural gas as a result of the Polar Vortex phenomena, extended periods of colder-than-normal weather occurring in Michigan and elsewhere in the United States and associated significant increases in demand for natural gas and natural gas send-out.”
Realgy has already passed through the costs required by us to deliver the extra gas demanded by each utility. We will return to our low costs which historically are below each of the utilities. At the same time, the utilities will begin passing through these costs and the cost will stay in place until it’s all collected.
Read the whole Energy Choice Matters Article, Michigan Sets Expedited Review of Polar Vortex-Driven Hike in Consumers
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.