Save Money on Energy and Telecom with Better Cost Control Independent Electricity, Gas and Telecom Experts

Information from the PA PUC tells us what percentage of users have contracted their electricity supply:

Percentage of Commercial Customers Served By An Alternative Electricity Supplier:

Duquesne Light: 33.3%

MedEd: 19.2%

PECO: 39.4%

Penelec: 26.5%

Penn Power: 27.2%

PPL: 51.1%

UGI: 5.1%

West Penn Power: 21.3%

Percentage of Commercial KWH Electricity Load  Served By An Alternative Electricity Supplier:

Duquesne Light: 66.5%

MedEd: 51%

PECO: 57.1%

Penelec: 59%

Penn Power: 27.2%

PPL: 92.8%

UGI: 5.1%

West Penn Power: 21.3%

http://www.oca.state.pa.us/Industry/Electric/elecstats/Stats1011.pdf

In Massachusetts, the present National Grid standard offer rates are:

G1 and Street Lights: 8.045¢/kWh thru April 30, 2012

G2: For the period thru January 31, 2012:

SEMA: 8.74¢

NEMA: 8.234¢

WCMA: 8.307¢

From February 1 thru April 30, 2012: 

SEMA: 6.87¢

NEMA: 6.917¢

WCMA: 6.899¢

If your company is located in the AEP Ohio services area, you need to completely understand what you are contracting in order to avoid the surprise of added RPM fees that might add as much as 15% to 20% onto what you thought was a good contract price.

In the AEP Ohio service area, customers who want to contract electricity with a competitive supplier must  secure a place in the Queue for an RPM (Reliability Pricing Model) set aside allotment.  There are only slots for 21% of commercial users to sign up with a competitive supplier.  If you don’t get through the Queue for 2011, then you can try for 2012.

In order to get into the RPM Set Aside Queue, you must first have a contract in place with a Qualified Electricity Supplier. Certain sized customers must wait 90-days to enroll with a competitive supplier.  If upon completion of the 90-day notice period, the customer has not enrolled with a Qualified Electricity Supplier, then the customer must continue to take service under the AEP’s standard service schedules for a period of not less that twelve (12) consecutive months. 

If you, as a customer, have signed a contract with a Qualified Electricity Supplier, but you have not made it through the Queue, you will be forced to pay a monthly RPM fee on your AEP bill that, as of this writing, amounts to $0.010625/kWH.  Based on today’s prices, this effectively increases your cost of electricity supply as much as 20%!!!!

How can you avoid this problem?

1. Sign your contract to start in 90 days.
2. Make sure that your contract has the following language in it:

The Parties acknowledge that the Pricing contained in this Pricing Attachment is based on the Supplier’s costs and the assumption that Customer will either be allocated a RPM Set Aside (similar to that described in any Stipulation or Order resulting from PUCO Case Number 11-0346-EL-SSO, et al) for the electric load covered by this agreement, or that capacity pricing associated with Customer’s electric load will otherwise be set by the PJM RPM.  Within the 30 days after Supplier receives notice that the Customer was not allocated a RPM Set Aside for the electric load covered by this agreement or that capacity pricing for Customer’s electric load will not be determined by the PJM RPM, both Parties shall have a one time right to terminate this agreement without cost or penalty by providing prompt notice to the other Party and the Customer hereby pre-authorizes Supplier to exercise its rights to terminate in accordance with this provision.

If the above language is not in your contract and you are not allocated in the RPM Set Aside, which is a very real possibility, expect your total effective electricity supply price to be 20% more than you planned on.

When you purchase electricity and natural gas, working with an experienced broker like Better Cost Control will help your company get the best prices, contract terms AND help you avoid the contract “gotchas” that are so easy to fall victim to.

AEP Service Territory: https://www.aepohio.com/service/choice/cres/ServiceTerritory.aspx

AEP Filing: https://www.aepohio.com/global/utilities/lib/docs/service/choice/OH/AS_FILED_AEP_v_PJM_Section_206_Complaint_04_04_11.pdf

Nstar has announced the Standard Offer price for electricity, for the period starting January 1, 2012.

Commercial:

• Jan: 9.627
• Feb: 9.247
• March: 7.470
• April: 7.235
• May: 7.129
• June: 7.032
• Average for Jan – June: 7.957

Industrial – NEMA:

• Jan: 9.009
• Feb: 8.657
• March: 6.827

Industrial – SEMA:

• Jan: 9.124
• Feb: 8.600
• March: 6.827

For Fixed Rate Standard Offer, the rates are:

• Commercial: 7.995 (Jan – June 2012)
• Industrial NEMA: 8.351 (through Sept 2012)
• Industrial SEMA: 8.207 (through Sept 2012)

On November 18, 2011, Met-Ed announced its new default service rate schedule:

The Price to Compare Default Service Charge is defined as the cents per kWh rates representing the Company’s costs for providing energy, capacity, including the cost of complying with non-solar AEPS, transmission and ancillary services for Customers who take Default Service.

The Commercial Price to Compare Default Service Rate for December 1, 2011 to February 29, 2012 is: $0.08656/kWh, which is a decrease from the previous period.

On November 18, 2011, Penelec announced its new default service rate schedule:

Rate GS Small: $0.077 per kWh
Rate GS-Medium: $0.077 per kWh
Rate GS-Large: $0.074 per kWh
Rate GP – General Service: $0.068 per kWh
Rate LP: $0.058 per kWh

The Commercial Price to Compare Default Service Rate for December 1, 2011 to February 29, 2012 is: $0.07580/kWh, which is a decrease from the previous period.

National Grid has filed its new rates with Mass Dept of Public Utilities.  This rate filing is important in evaluating the value of contracting electricity in the state of Massachusetts.  While this summer, the rates were unusually low, fixed price contracts can benefit customers again.  The following rates were filed:

NEMA: G-2 and G-3

Fixed Price 11/1/2011 to 4/30/2012: 8.234¢

Variable: Nov 2011: 6.947¢, Dec 2011: 8.292¢, Jan 2012: 9.401¢

SEMA: G2 and G-3

Fixed Price 11/1/2011 to 4/30/2012: 8.074¢

Variable: Nov 2011: 7.060¢, Dec 2011: 8.715¢, Jan 2012: 8.394¢

What is Load Factor?

Load factor is an expression of how much energy was used in a time period, versus how much energy would have been used, if the power had been left on during a period of peak demand.  It is a useful indicator for
describing the consumption characteristics of electricity over a period of time. Customers whose facilities are metered for demand can readily determine the load factor for any given month. Facilities billed at highest peak demand during the billing period should avoid periods of increased demand whenever possible.

How to Calculate Load Factor

The load factor percentage is derived by dividing the total kilowatt-hours (kWh) consumed in a designated period by the product of the maximum demand in kilowatts (kW) and the number of hours in the period. In the example below, the monthly kWh consumption is 36,000 and the peak demand is 100 kW. There were 30 days in the billing period.

Load Factor = 36,000kWh/(100kW x 30 days x 24 hours/day

Load Factor = 36,000 kWh/72,000kWh

Load Factor = 50%

This load factor indicates the monthly energy consumption of 36,000 kWh used by the customer was 50% of the total energy available (72,000 kWh) for use at the 100 kW level.

Why is Load Factor Important?

Electricity Distribution Companies must meet the customers’ peak demand at all times. The demand rate structure automatically rewards customers for improving their load factor. Since load factor is an expression of how much energy was actually used compared to the peak demand, customers can use the same amount of electricity from one month to the next and still cause their average cost per kilowatt-hour to drop as much as 40% simply by reducing the peak demand. For instance, a 25% load factor in the summer would yield an average cost per kWh of 13.2 cents, while an 80% load factor would yield an average cost per kWh of 7.9 cents. Remember, this is comparing two months in which the customer used the same amount of electricity (kWh) with different peak demands.

How to Improve Load Factor

Lowering the facility’s peak demand is the primary step to improving load factor and will reduce the amount paid monthly for electricity.

To determine the potential for improving load factor, analyze billing records to identify the seasons during which the peak demand is the greatest. In general, the greatest demand for electricity occurs on hot days in the summer. While this implies that a large electric load is dedicated to space cooling, it is not necessarily true for every facility. It is always best to observe operations at the facility to determine what equipment may be causing the peak demand. Once the contributing equipment loads have been identified, determine what can be done to sequence or schedule events or processes in order to minimize the simultaneous operation of high wattage equipment.

Many states have tax regulations that exempt certain types of businesses from tax on electricity and/or natural gas.  In some states, all manufacturers are exempt.  In others, all businesses with less than five employees are exempt.  One state even exempts cemetaries, but how much electricity do they use?

Every business should be aware of the regulations and file the appropriate forms, if they are entitled.  The links below should be helpful to many viewers:

Massachusetts

Pennsylvania

New Jersey

New York

Connecticut

Rhode Island