Natural Gas at Five Year High
Natural Gas prices have made a jump above $6.00 Dth or $0.60 / therm in the wholesale market; this is a 30% increase in the last couple days!
This increase looks speculative by traders but if it holds till February 26th it will set a five year high for the NYMEX first-of-month pricing and will keep bills high
The Bloomberg News article “Natural Gas Gains With Coffee as Commodities Jump; S&P 500 Rises” discusses the impact of natural gas and other commodities from the traders perspective.
Natural Gas price increased 27% on February 18, 2014
To keep track of the wholesale prices please enroll with Realgy’s NYMEX reports. It will send you NYMEX end-of-day reports daily.
Realgy is working to ensure our pricing stays as low as possible. Given we are all dealing with the coldest winter in 20 years and the highest energy prices in over 5 years.
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.
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 “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 “Nest Gives Google Its Next Big Data Play: Energy”
Written by Michael Vrtis, President of Realgy Energy Services in response to the Forbes article “Nest Gives Google Its Next Big Data Play: Energy”
As technology advances, so does everything else.
The thermostat remains a humble device to call for more heating or cooling to occur, but when connected to the Internet, it is transformed into a retail energy service.
Commercial businesses did this at the meter long ago and continue to do this. Certainly more utilities are moving toward implementing the capabilities of the Internet at the meter. However, Google has the interest and the financial capabilities to at least challenge the utility meter offering, if not win it.
This is a great addition to the ongoing implementation of technology into our every day.
Realgy offers choices that deliver savings. The consumer should understand the better the information, the better the energy choices. Realgy will continue to advocate for open access to any data collection device a customer or utility chooses to install.
Check out the article in Forbes: “Nest Gives Google Its Next Big Data Play: 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
Lake County Fairgrounds breaks ground on the installation of its first solar power project
PRESS RELEASE December 02, 2013 | By: Realgy, LLC
Lake County Fairgrounds, Grayslake, Ill., will soon be partially powered by a 160 solar panel PV system.
Realgy, LLC has announced the start of installation on a 37.5 kilowatt (kW) solar photovoltaic (PV) system for Lake County Fairgrounds. The solar PV system will be installed on the roof and will occupy approximately 53- by 54-square-feet of space. Lake County Fairgrounds, operated by Lake County Fair Association, is the home of the historic Lake County Fair and other quality year-round events.
The solar PV system is being installed by Renewable Energy Alternatives of Arlington Heights, Illinois. This is the first solar project that Renewable Energy Alternatives has completed for Lake County Fairgrounds. “We are excited to be a part of this venture,” said Kacie Peters, Director of Sales and Marketing at Renewable Energy Alternatives. “The array is in a very public space and will be seen by thousands annually. We hope that this array will inspire others to know solar is possible—and practical in Illinois.”
Realgy, LLC is an alternative energy service supplier in Illinois, and will be supplying Lake County Fairgrounds their electricity and selected them for this installation. Lake County will receive all of the solar energy produced by the panels, which will reduce their reliance on fossil generated energy produced primarily from coal in Illinois.
Once complete the Lake County solar PV system will produce over 49, 000 kilowatt hours (kWh) of energy annually and more than one million kWh over the next 25 years. That is enough energy to power about 2 average U.S. homes every year. The environmental benefits associated with the system will offset about 900 thousand pounds of carbon dioxide over the initial 25 years of operation.
“We are excited to announce the start of the Lake County Fairgrounds solar project,” said Michael Vrtis, President of Realgy. “Realgy made this investment as a part of our sustainable energy commitment and due to the support of Illinois Department of commerce Renewable Energy Program and the Illinois Solar Energy Association.”
Contacts:
Lake County Fairgrounds
1060 East Peterson Road
Grayslake, Illinois 60030
847-680-7200
www.lcfair.com
Renewable Energy Alternatives
Kacie Peters
3670 Commercial Avenue
Northbrook, Illinois
847-291-7693
www.renewableenergyalt.com
Realgy, LLC
Nicole Werner
675 Oakwood Avenue
West Hartford, CT
860-233-2270
www.realgyenergyservices.com