Should You Aggregate Your Electricity Supply? Part II: Customer Experiences

When Texas deregulated its electricity market in January 2002, APPI Energy combined hundreds of Texas Automobile Dealers Association members in several aggregations that purchased hundreds of millions of kWh. Since that time, APPI Energy has created and managed many more successful aggregations, providing supply solutions for first-time buyers and renewal customers in Texas, Illinois, Maryland, and Pennsylvania. Contact us at 800-520-6685.

Tim Thil, Superintendent of Pearl City Schools in Illinois, says, “APPI Energy presented aggregated pricing to two other school districts and me, and made the transition to our chosen competitive supplier seamless. After our supplier contract started, my consultant helped me add a meter, further reducing my supply costs.”

Maureen H. Beilman, CFO of The Dime Bank in Pennsylvania, says, “Evaluating all of our options—from aggregated pricing to fixed-pricing from many reliable, competitive suppliers—APPI Energy makes customized recommendations in the best interest of each of our locations. We appreciate their thorough market analysis and cost-reducing solutions.”

Victor Schmidt, Corporate Secretary at Kraemer Textiles, Inc., in Pennsylvania, says, “Helping me reduce electricity costs across the board, APPI Energy presented me with competitive pricing for my larger accounts and aggregation opportunities for my smaller accounts. I recently locked in a 36-month contract, per their recommendation that electricity prices were historically low. I trust them to continue to notify me of future opportunities.”

Mark Eighner, Business Manager for Hoopeston Area Community Unit School District 11 in Illinois, advises, “We were participating in a consortium program and locked into an electricity supply contract with unclear terms and conditions. APPI Energy evaluated our existing contract and recommended a course of action for negotiating the lowest price and best contact terms and conditions for our next supply contract. The end result—better pricing, budget certainty, and a contract that is clearly understood.”

Should you aggregate your electricity supply?

When you’re considering competitive pricing for the supply portion of your electricity bill, is it advantageous to aggregate with other consumers into one group?

Competitive Suppliers

To ensure you obtain the lowest price, you should request price discovery from many competitive suppliers. History shows that buying electricity as an aggregated group does not necessarily yield a lower price for all customers. The reality is that some participants subsidize others in aggregations. Each consumer has a different usage profile, credit status, and payment history, all of which suppliers scrutinize.

Price & Contract Components

Be sure that the aggregation’s price is lower than your electric utility’s price to compare. Beware of cost components that are “passed through” to aggregation participants, and beware of costs that can fluctuate monthly based on external events that you cannot control. If you discontinue participation in an aggregation, or if you terminate a supply contract before it expires, you'll likely be required to pay an early termination fee to the supplier, and possibly an exit fee to the aggregation.

Are all of the participants comfortable with the term? If you prefer a short-term supply contract, such as 12 months, will you be comfortable if your aggregation selects a 48-month contract?

Each aggregation has a fiduciary that is responsible for requesting price discovery and negotiating the supply contract. Are you confident that your aggregation’s fiduciary is qualified to vet competitive suppliers, monitor electricity tariffs, and track energy markets? Participants must accept the aggregation’s “one-size-fits-all” solution.

Energy Consulting

An experienced energy advisor can effectively advocate for the participants’ best interests. Consider working with an independent energy consultant that can identify a good time to buy and determine an advantageous term for your supply contract. Contact APPI Energy for a complimentary analysis of any aggregation opportunity you're evaluating. Contact 800-520-6685 or info@appienergy.com. 

PA Attorney General warns PPL & Duquesne Light customers

The Pennsylvania Attorney General has been getting complaints that salespeople are fraudulently claiming to be from PPL or Duquesne Light, and are offering products that could increase the customer’s rate. Click here for more information.

To learn more about how you can protect your business from fraudulent salespeople, click here.

What’s the difference between commercial & residential electric rates?

Most electric utility companies make quarterly adjustments to their electric supply rates for customers. You’ve probably noticed that your electric bill is higher and lower during certain times of the year. While the amount of electricity you consume affects the bottom line of your bill, so does the supply price you pay per kilowatt hour (kWh).

Electric utilities set different supply rates for commercial and residential customers. At the same time that the rate you pay for your home decreases, the rate you pay for your business may increase. For instance, Pennsylvania’s PPL Electric Utilities is touting a 4.1% cut to its tariff rate, from 7.5 cents/kWh to 7.2 cents/kWh. However, this rate decrease is for residential customers only. PPL will charge commercial customers a tariff rate of nearly 11 cents/kWh from March 1 – May 31, 2013, reflecting a 6% increase.

Locking into a contract with a competitive supplier at a fixed price lower than your local utility’s tariff rate eliminates the risk of volatile price increases. Business owners can contact APPI Energy’s unbiased team of advisors to compare prices from many reliable suppliers and choose a contract that best fits your needs.

Trend report 2013, Part III: Electric Vehicles & Energy Efficient Buildings

In the final segment of our three-part blog series, we take a look at how electric vehicles and energy efficient buildings are making headlines in 2013. (See a complete overview now.)

Vehicles

Since 2009, 30 new plants have opened across the U.S. to manufacture electric vehicles and advanced batteries. Today, 18,000 electric vehicle charging stations are available across the U.S.

Energy efficient buildings

The DOE’s Better Buildings Challenge aims to improve energy efficiency in commercial properties by 20% by 2020. Sixty private companies and educational and governmental entities have agreed to perform energy efficient retrofits to 1.6 billion square feet of existing properties. Under the U.S. Department of Agriculture’s Rural Energy for America Program, 13,000 rural small businesses have installed renewable energy systems. More than 7,500 factories and buildings were ENERGY STAR certified in 2011, achieving strategic energy management that reduces costs and protects the environment.

Looking ahead

Engineering innovations, information technology, and systems improvements like smart grid capabilities will play major roles in shaping the energy industry in the coming decades. Legislation, regulatory policy, and private sector activities addressing environmental concerns will also play vital roles. Truly, the energy industry is dynamic and is an ever-changing opportunity for innovation, new employment, and economic growth.

See Resources.

Super Bowl Power Outage: What Happened?

A 34-minute power outage was the most tweeted topic of Super Bowl 2013, generating 231,000 tweets per minute. At the beginning of the second half, lights on one half of the Superdome’s roof suddenly went dark. Escalators, concourse lighting, the scoreboard, credit card machines, and Internet connections in the press box lost power. Backup generators prevented the field from going totally dark.

"A piece of equipment that is designed to monitor electrical load sensed an abnormality in the system," said Superdome operator SMG and Entergy New Orleans, which delivers power to the stadium. "The sensing equipment opened a breaker, causing power to be partially cut to the Superdome in order to isolate the issue.” Entergy New Orleans’ distribution and transmission feeders were never interrupted. The rest of New Orleans didn’t lose power.

The 38-year-old Superdome has undergone $336 million in renovations since Hurricane Katrina destroyed its roof in 2005.

Resources

http://www.cnn.com/2013/02/04/us/us-super-bowl-outage/?hpt=hp_c1

http://www.cbsnews.com/8301-400_162-57567385/super-bowl-power-outage-what-went-wrong/

Trend report 2013, Part II: Renewable Energy & Infrastructure

In the upcoming week, we’ll continue posting our three-part blog series regarding specific segments of the energy industry that will make headlines in 2013. (See a complete overview now.) Today’s blog focuses on renewable energy and infrastructure.   

Renewable energy

The U.S. Department of Energy supports 40 clean energy projects—including the world’s largest wind farm— that provide 60,000 jobs and generate enough renewable energy to power 3 million homes. Obama’s FY 2013 Budget includes $5 billion in tax credits that could create tens of thousands of new construction and manufacturing jobs related to renewable energy. In 2012, a major utility in Texas agreed to purchase power from the first coal-fired power plant in the U.S. to use carbon-capture technology. Meanwhile, the first nuclear energy plants in 30 years is being constructed in the U.S. Four commercial-scale biorefineries are under construction.

Infrastructure

Our aged electricity infrastructure needs ongoing improvement. Trillions of dollars must be invested nationally in the next few decades to upgrade the current infrastructure to a modernized, fully interactive, self-healing Smart Grid. Just a few of many needed upgrades include reclosers, capacitor banks, voltage regulators, automated switches, smart meters, substation transformer monitors, distribution management system platforms, volt/VAR optimization applications, and fault location, isolation, and service restoration applications. Opportunities abound for engineers, manufacturers, and innovators to create new products and services.

Looking ahead

Engineering innovations, information technology, and systems improvements like carbon-capture technology and smart grid capabilities will play major roles in shaping the energy industry in the coming decades. Truly, the energy industry is dynamic and creates ever-changing opportunities for innovation, new employment, and economic growth.

See Resources