July
28
2010
The advent of energy deregulation in New Jersey nearly 12 years ago allowed electricity consumers to shop for the best rates and pick their own supplier. But the choices for alternate suppliers remained limited and only a small fraction of residential customers made the switch. Eventually, some suppliers left the state.
But newer companies have been expanding their operations in New Jersey in recent weeks, attempting to gain a foothold in the relatively untapped residential supply market.
“I guess it’s an opportunity that they see because of the economy,” said Karen Alexander, president of the New Jersey Utilities Association, which represents investor-owned utilities such as Atlantic City Electric and South Jersey Gas.
Some of the companies are promoting savings of between 5 percent to 20 percent over a year’s worth of electricity bills. Gateway Energy Services, based in Montebello, N.Y., has been mailing letters to New Jersey residents this month saying that its current electricity rates “are at least 15 percent below utility pricing.”
Karen Harris, corporate communications editor for Gateway, said the company’s push into New Jersey is favorable because consumers seem to be more open to finding other ways to save money.
Before April, the company was only certified to supply natural gas in the state. After gaining approval to supply electricity from the New Jersey Board of Public Utilities, Gateway added 15,000 residential electric accounts, said Steve Varney, the company’s director of marketing.
So what has been its strategy in converting ratepayers?
“We like to use the model of: Remember when you couldn’t shop around for a phone carrier? But now you can,” Harris said. “Once we use that as a basic model of deregulation, they think, ‘Now I get it.’ Education is a top priority for us.”
Gateway operates in eight states and Washington, D.C. Its largest presence is in New York, where it has the equivalent of 350,000 residential customers, Varney said.
The number of New Jersey residents who use a third-party supplier has grown over the past two years. As of May, 6,594 residential customers in the territory of the four major electric utilities, Atlantic City Electric among them, belonged to an alternate supplier. That’s only 0.2 percent of the 3.35 million ratepayers within those utilities’ coverage area.
But it’s a huge leap from early 2009, when there were just 12 residential customers who belonged to another supplier, according to the BPU.
People who choose another supplier will still get their power delivered to their homes by their local utility, which will continue to be responsible for maintaining the power lines or restoring electricity when there are blackouts. The main difference is how a ratepayer’s bill might look: It would still show his or her local utility’s charge to deliver the electricity as well as the alternate supplier’s charge for supplying the electricity.
While Gateway does not charge a fee to join, it does require its customers to sign contracts, either a nine-, 12- or 24-month fixed-rate plan or a variable-rate plan.
A 12-month fixed-rate plan currently offers a rate of 11.38 cents per kilowatt-hour, which is below the 12.46 cents per kilowatt-hour of Atlantic City Electric’s average annual price. For consumers who use 10,000 kilowatt-hours over a year, Gateway says they could save $108.
Gateway cannot guarantee savings with a fixed-rate contract since Atlantic City Electric’s rate can change because it is based on fluctuating market prices.
“There are other times we unfortunately will be the same or above in the rate,” Harris said. “But we offer more than the utility can because you can lock in your price and it is not going to change.”
Breaking a contract with Gateway would cost $12.50 per month for every month or partial month that is outstanding.
Another licensed residential energy supplier in New Jersey, Viridian Energy, says it offers no contracts for customers. The Connecticut-based company allows people to sign up or cancel at any time. It began service in New Jersey in May, and uses a rate that may vary from month to month. Its current rate is 11 cents per kilowatt-hour.
Viridian is trying to distinguish itself as a “green” energy provider by offering power – 20 percent or more – that it says comes from renewable energy sources. The company also signs up customers through a network of independent associates who belong to Viridian’s direct selling program. The company does not actually charge consumers to sign up for its service.
“We’re not asking for a Social Security number. There’s no credit check,” said Alison Bradford, an independent associate from Estell Manor.
There are at least seven companies that are licensed as residential electricity suppliers in Atlantic City Electric’s service territory. Companies wanting to operate in New Jersey must provide audited financial information, proof that they have experience in the industry and membership with PJM, the operator of the regional power grid. Licenses must be renewed annually, BPU spokesman Doyal Siddell said in an e-mail.
In addition, the BPU verifies any claims about how much renewable energy a company might supply and also reviews the number of customer complaints with each company before a supplier’s license is renewed, Siddell said.
Greg Leap, a Linwood insurance broker, joined Viridian last month after doing some research on the company. He’s still waiting to see how much he can save with his July bill, but is so confident in the company that he became an independent associate as well.
“Everyone would like to go green, but very few people will pay more to do it,” he said. “But this way, it’s the best of both worlds.”
Contact Erik Ortiz:
609-272-7253
July
12
2010
WASHINGTON — If you were to vote for the next U.S. senator from Washington state based solely on energy and climate issues, you couldn’t complain for lack of choices.
Among the four leading candidates is an incumbent who has voted in alignment with environmental groups and a tea-party favorite who blames “environmental extremists” for the crux of the nation’s energy woes.
There’s also a veteran Republican politician who opposes capping and putting a price on greenhouse-gas emissions — a central tenet of President Obama’s energy policy. And a businessman who not only rejects that Earth is inexorably growing warmer but suspects that scientists deliberately cooked the data to push an agenda.
With Congress poised to take a final vote soon on financial regulation, climate and energy legislation remains one of the last major pieces of unfinished business before the November elections.
Sen. Patty Murray, a Democrat seeking her fourth term, shares Obama’s belief that Americans burn too much fossil fuels such as coal, oil and natural gas. She has sought both to reduce demand through conservation and to increase alternative-energy sources.
Murray has voted to require automakers to significantly boost fuel mileage in passenger cars. She supports giving tax credits to promote clean-energy technologies and personally has sought millions of dollars in earmarks for companies working to develop wind, tidal power and biofuels.
Murray’s track record in recent years has put her in full agreement with positions held by such groups as Environment America and the League of Conservation Voters, according to Project Vote Smart, a nonprofit that analyzes voting records.
The House last year passed the first bill ever to curb heat-trapping greenhouse gases. The measure included a “cap-and-trade” system that would set a limit on overall emissions of carbon dioxide and other greenhouse gases; polluters seeking to exceed their limit would have to buy emissions credits from companies that have surplus credits to sell.
Rep. Dave Reichert was one of only eight Republicans to vote for the plan, earning the enmity of many conservatives who regard cap and trade as a new tax.
The Senate is at an impasse over the energy bill, in part because most Republicans and some Democrats oppose cap-and-trade.
In an interview, Murray would not say whether she considers a price on carbon emissions an essential tool to combat climate change. She noted she is undecided about increasing the tax on gasoline as a way to help wean Americans off fossil fuels, saying consumers already pay a high price for energy.
“I will consider anything that has the goal of reducing our dependence on oil,” Murray said.
Dino Rossi, a two-time gubernatorial candidate and Murray’s chief Republican challenger, emphatically opposes cap-and-trade as a “job-killing national energy tax.”
Rossi said he’s not necessarily against setting a hard limit on carbon pollution but said the challenge is to do it without imposing additional costs to families.
“We need to strive for clean air and clean water,” Rossi said. “But I can’t say what that (pollution) limit should be.”
Rossi’s campaign said he believes Earth is warming but isn’t sure how much humans are to blame. That’s the same position he took during his 2008 campaign for governor when he said we should reduce carbon emissions rather than debate the cause of climate change. He said then that he favored incentives over government regulations, and he backed expanding highways to ease traffic congestion, which he argued would cut emissions.
In an interview last week, Rossi said all forms of alternative energy, including nuclear power, should be pursued. He also said the solutions to the nation’s energy challenge lie in the marketplace, not with the government.
When gas prices soared during the summer of 2008, Rossi noted, consumers quickly cut back on driving or switched to smaller vehicles.
Republican Clint Didier, a Pasco farmer endorsed by former vice-presidential candidate Sarah Palin, says the solution to our dependence on foreign oil is simple: Drill for it at home.
Didier believes enough oil and gas lie untapped beneath American soil and waters to meet domestic needs, if only environmentalists and regulators didn’t stand in the way.
“We need more drilling, and build more refineries,” Didier said. “We need to be able to use our resources.”
Americans used more than 7 billion barrels of oil in 2008, 60 percent of it imported, according to the U.S. Energy Information Administration.
The Interior Department’s best guess is that between 67 billion and 115 billion barrels of recoverable oil is buried within 200 miles of shorelines, with an additional 21 billion barrels beneath federal lands. At that rate, the undiscovered oil could fuel the country for two decades at the most.
Asked if he believed the United States truly could drill its way into energy self-sufficiency, Didier said, “Yes, I do. Yes, I do.”
Didier is skeptical of warnings — including most recently from the National Research Council, the nation’s leading scientific body — that global warming is real and caused mainly by burning fossil fuels. Didier referred to the recent “Climategate” controversy involving allegations that British and American scientists manipulated their research.
Five separate investigations have reaffirmed that the fundamental science behind climate change is sound. Nonetheless, Didier said, “I do not trust the basic data.”
Republican Paul Akers, a Bellingham business owner, goes even further.
Climate researchers “are not scientists. They are people with a political agenda,” Akers said, calling global warming “part of the natural cycle” of Earth heating and cooling.
Akers contends private businesses always will out-innovate bureaucrats. He points to Toyota’s Prius hybrid car as an example of free enterprise solving the energy challenge.
Akers said he believes that technological advances soon will make wind, solar and other forms of green energy a reality — and argues against government involvement, even if only to provide tax incentives.
“I think the free market is going to do a fabulous job,” Akers said.
July
11
2010
Federal housing officials are ending a promising clean energy initiative. But the Property Assessed Clean Energy program is worth fighting for. California has been among the most enthusiastic supporters of PACE, both to make homes more energy efficient and to create green jobs.
Homeowners could get low-interest loans for solar panels, new water heaters or making other improvements. Payments become liens on tax bills over an extended period. The interest rate is kept low because the loans, typically $30,000 or so, are repaid before existing mortgages.
The Federal Housing Finance Agency fears that the two federally backed home mortgage giants it oversees – Fannie Mae and Freddie Mac – would be left holding the bag if borrowers default on their home loans.
In a statement Tuesday, the agency said that the PACE programs “present significant safety and soundness concerns” to lenders and could “disrupt a fragile housing finance market.”
FHFA directed Fannie Mae and Freddie Mac to give their blessing to already-issued loans, but told the companies to impose stricter lending standards on future loans. That will effectively end the programs because if Fannie and Freddie won’t back the loans, banks won’t offer them.
This decision amounts to an expensive irony. Fannie and Freddie were big players in the housing meltdown, scarfing up worthless subprime loans far worse than the loans now in question.
The companies are beneficiaries of the biggest U.S. government bailout ever. In their understandable caution, the new overseers of Fannie and Freddie are unfortunately killing an innovative idea before it can fully flower.
The Fresno Bee
July
7
2010
The Obama administration just announced a handout of $2 billion to build solar panels. The development of this type of energy is politically sexy. Jobs are created to build and maintain the panels, which scream eco-friendly every time they appear on camera.
No one is criticizing the initiative, but it overlooks a power source boasting far greater reliability and intensity than both solar and wind power. Arguably, it produces NO carbon footprint. You could even say it creates a negative carbon footprint.
The source is recycled energy. Instead of burning a fuel to create energy, it takes energy that we are otherwise throwing away and converting that into something usable. It captures heat that otherwise disappears into thin air and turns the heat into power.
You see, with the exception of solar panels, all electricity is generated by turning a turbine in a circle. Windmills and Hydroelectric plants do that with the force of nature. Coal burning and nuclear power plants do that by boiling water and forcing the steam through the turbine.
At the ArcelorMittal steel plant, in East Chicago, Indiana, a company called Primary Energy mounted giant boilers on top of the big ovens used for the production of steel. The steam created by those boilers spins the turbine enough to save ArcelorMittal $100 Million per year on its electricity bill.
Thomas Casten, the Chairman of Recycled Energy Development says, “What they’ve done at this plant produces about twice the amount of clean energy as all of the solar collectors in the US since the dawn of the industry.”
Since the power is generated using heat that would be created anyway, you can make the argument for zero carbon footprint. In fact, since ArcelorMittal uses the power it generates, it borrows less from the grid. Less coal needs to be burned at the power plant creating an argument for a negative carbon footprint while still voraciously gobbling up megawatts.
No one is against the concept of recycled energy. In fact, using Illinois for an example: the language in the state’s renewable energy portfolio standard seems to prompt it, calling for the exploitation of wind, solar, biodiesel and “other alternative sources of environmentally friendly energy.” But big steel mills with towering smoke stacks don’t say I love nature in a photograph as well as a field of wind turbines. The politicians and policy makers never jumped on recycled energy. Mark Pruitt with the Illinois Power Agency says, “There have been a lot of advances in wind and solar. I think the recycled energy approach is something that has been passed over.”
So when you drive past a big steel mill, glass plant or silicon factory, think of how much energy is just being tossed up into the sky. Across the nation, Casten estimates it at $4-6 hundred billion. “We are the Saudi Arabia of Waste heat.” He says, “You can either use it or lose it.”
July
1
2010
Renewables like solar power and others can’t fuel America’s future. Say experts: Just do the math.
About once a month, Robert Bryce climbs onto the roof of his Austin, Texas, home, lugging a long-handled mop. The science writer and Manhattan Institute fellow isn’t cleaning gutters. He’s cleaning solar panels.
The 3,200-watts of solar photovoltaic panels provide one-third of the electricity that Bryce’s family consumes, slightly reducing his monthly power bill. But the panels aren’t without problems: The start-up costs were high, the inverter has already broken once, and the panels require regular cleaning.
Bryce quickly wondered if the panels were worth the investment, and he soon realized that the limits of solar power for his Texas home extended to the rest of the country: Solar power won’t run America anytime soon. Neither will wind power.
Yet that’s precisely the direction many suggest taking: Congress was poised in late June to begin debating an energy bill that could require utility companies to generate more electricity from wind, solar, or other renewable energy sources. When President Barack Obama seized the Gulf Coast oil spill to push for a clean energy bill, he spoke of wind power, though wind has little immediate connection with oil: Wind produces electricity, not the kind of fuel that oil provides for cars. “You can build windmills from coast to coast, and it doesn’t do anything to help our oil situation,” says Steven Hayward of the American Enterprise Institute (AEI).
But the president’s push for government-funded wind and solar energy—and away from sources like coal and oil—isn’t new. Obama’s February budget proposal for 2011 included a 48 percent increase in government subsidies for wind power—from $83 million this year to $123 million in 2011. On solar energy, the president asked for a 22 percent hike—from $247 million to $302 million.
For Bryce, the problems with wind and solar power are simple: The math doesn’t add up. The author of Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future (PublicAffairs, 2010), Bryce says wind and solar simply can’t provide large amounts of power at a reasonable cost, a critical need for rich and poor countries alike.
Instead, Bryce and others point to already-proven energy sources they believe deserve more attention: natural gas and nuclear energy.
Natural gas, particularly, is abundant and available now. It’s also easier to extract than oil and cleaner than coal. And—like nuclear power—natural gas trumps any wide-scale potential promised by wind or solar energy.
“I’m all for renewables,” Bryce says. “I wish they worked better than they do. But our energy and power systems are not determined by carbon content or political correctness. They’re determined by math and physics.”
Math and physics offer stark realities about wind and solar energy. The most obvious problem: The sources are intermittent.
As Sen. Bob Bennett, R-Utah, ranking member of the Subcommittee on Energy and Water Development, told Environment and Energy Daily: “The wind doesn’t always blow and the sun doesn’t always shine.”
To make the energy sources consistently reliable on a wide scale would require massive amounts of reliable storage—technology that doesn’t exist on a cost-effective basis. Forcing utility companies to generate more of their power using wind and solar would likely raise energy costs for U.S. consumers.
Another problem: Wind and solar require massive amounts of land to produce and transport energy. The Nature Conservancy, a U.S. environmental group, published a report last year estimating that wind power requires about 30 times as much land as nuclear energy, and four times as much land required for natural gas.
The high costs, unreliability, and land usage aren’t just a problem for prosperous nations like the United States. The dynamic is especially unrealistic for developing countries in desperate need of cheap energy for basic survival. Connecting the developing world to affordable sources of energy—including sources like coal and oil—and moving the poorest populations away from using sources like wood and dung, remains a critical way to raise the standard of living in some of the most miserable places in the world.
Cal Beisner of the evangelical Cornwall Alliance points out that energy policy in the United States isn’t isolated: “The average American does not connect the person in Sudan cooking over dung with energy policy in the U.S.”
But policies that would raise the cost of energy here also serve as a model to other nations and as a basis for international treaties on energy consumption, says Beisner: “Not only would those policies hurt Americans by raising the price of energy for all of us . . . they would also impose such policies on people who desperately need to be delivered from the dirtiest possible fuels.”
How critical is cheap energy for developing countries? Bryce points out that Africa—a continent with 14 percent of the world’s population—has developed only 3 percent of the world’s electricity. Of the 15 countries in the world with the highest death rates, 14 of them are in Africa. Of the 22 countries with the highest infant mortality rates, 21 of them are in Africa. Many factors contribute to those high death rates, but a widespread availability of cheap energy would likely make life healthier for millions.
Back in the United States, if wind and solar remain unrealistic for large-scale, cost-effective energy, natural gas has already proven itself on both counts: Natural gas provided nearly a quarter of the nation’s energy for electricity in 2009, second only to coal.
Advances in technology over the last five years have created a mini-revolution in extracting natural gas using new methods, opening up new gas supplies all over the country. Hayward of AEI says fields are so vast, it’s conceivable that the United States could become an exporter of natural gas over the next few decades. The new technology could also hold promise for developing countries still creating their power systems, if they embrace natural gas as a major source of energy that is far cleaner than coal.
Peter Huber, author of The Bottomless Well (Basic Books, 2005), sees another major use for natural gas: transportation. The United States consumes massive amounts of oil for vehicles each year, but Huber thinks natural gas could compete. He notes that some 10 million vehicles worldwide already run on natural gas. Vehicles would require more natural gas to travel the same distance, but Huber says modifications to vehicles over the coming years could accommodate the change. And since natural gas is cheaper than oil, the option could still be cost effective.
Major challenges remain: Natural gas pipelines—regulated by the federal government—would need to run to the gas stations that supply fuel, and the fuel still wouldn’t work for every vehicle. And many critics cite safety concerns against using natural gas in vehicles.
Critics also worry that more drilling for natural gas could lead to groundwater contamination for nearby neighborhoods—a concern natural gas companies will need to acknowledge and monitor.
Natural gas advocates emphasize that gas isn’t an energy silver bullet, and that any major energy transition will still take decades. But they insist the technology holds more long-term promise than wind or solar. In the meantime, they say we shouldn’t abandon one of the best fuels we have: oil. Despite the devastating BP oil spill, oil advocates point out that major spills are rare, and that relying more heavily on imports could lead to tanker spills—already much more common than well leaks.
With any major energy transition still years away, Hayward says oil is here to stay for at least decades. “The ‘problem with oil’ is that it’s such a terrific fuel, it’s hard to match its performance and cost with anything else.” Bryce agrees, and bristles when politicians complain about an abundance of fossil fuels.
“Without those fossil fuels, we would be returned to the incredible environmental destruction and nasty living conditions and incredibly hard labor of the 19th century,” he says. “We would be living in dire poverty.”
By Jamie Dean
June
28
2010
Black Hills area power consumers raised an old issue about competition this spring when writing to state regulators to complain about a possible electric rate increase.
“We customers do not have the choice to go to a cheaper supplier of electricity — we are captives!!” Doris Schenk of Spearfish wrote in a letter.
Despite public outrage over the rate increase, no one is calling seriously for deregulation in South Dakota. But the complaints are a sign that consumers feel frustrated by a lack of choice.
“Aren’t there laws against monopolies?” Jim Roling of Piedmont asked. And Lois Ward of Rapid City wrote: “Where is the protection for the captive consumer? We cannot choose to buy electricity from a different supplier unless we move into a different geographical area.”
Those who have experienced a deregulated electric power market, though, warn that such a choice is not necessarily a good thing for the consumer.
“I would say that, given the experiment with deregulation in Montana, that anybody who suggests that deregulation is a better alternative than any decision the Public Service Commission would make, would be a monumental mistake,” said Greg Jergeson, chairman of the Montana commission.
Jergeson was a Montana state legislator in 1997 when lawmakers voted to deregulate electric utilities at the request of the monopoly Montana Power, which had plans to sell its assets and get into the telecommunication business.
He said Montana at the time had among the lowest power rates in the country, and he voted against deregulation.
“None of it ever made sense to me,” he said. “People came and said, oh, ‘You go to the market and rates will go down.’ The math just simply did not compute.”
A survey eight years after deregulation by Lee Enterprises’ capitol bureau in Helena, Mont., found that residential electric rates for the 300,000 customers now served by NorthWestern Energy in Montana were paying 50 percent more than before deregulation and that the rates were the highest among a dozen utilities and co-ops in six states.
Rates rose when the company’s predecessor, Montana Power Co., sold off its power plants. NorthWestern buys power on the open market, a company official told the bureau at the time.
Under regulation, it is common for companies such as Black Hills Power to be “vertically integrated,” handling many diverse aspects of generating and distributing power including mining coal, burning it for power, transmitting and selling that power to consumers and handling customer-service calls.
Under deregulation, those services may be provided by different companies. In a common form of competition under deregulation, retail wheeling, a new supplier in the market can sell power to a customer using an established supplier’s transmission system, eliminating the need for multiple sets of power lines.
But retail wheeling and other forms of competition don’t make power service more efficient, especially in states such as South Dakota, experts say, because even with some shared infrastructure, building a power system is expensive and because the state is so sparsely populated.
“The duplication of facilities in a very capital-intensive business doesn’t necessarily lead to better choices or lower costs,” said Kyle White, vice president of corporate affairs for Black Hills Corp. “Regulation is a proxy for competition.”
Like water, sewer, roads and natural gas, power is a “natural monopoly,” said Jim Burg of Wessington Springs, a former Public Utilities commissioner who served from 1986 to 2004.
Everybody has to have it, and a power system is very expensive to build and takes a lot of overhead to run.
“If electricity isn’t a natural monopoly I don’t know what is,” Burg said.
Under the state’s regulated system, utilities must deliver power to even the smallest and most rural customers in their territories, even though there isn’t any profit there. Those customers could get left out or charged huge rates if faced with a free market.
“A free market is really about choice, consumers having choices,” state Public Utilities Commission chairman Dusty Johnson said. “There might be parts of Rapid City that might be able to get two providers to sell them power, but would that be true for Belle Fourche?”
Services such as cell phones or the Internet work with competition because the infrastructure is cheaper, technology changes quickly and different companies can offer customers a variety of services or packages to choose from.
“The problem with electricity is, you’re still delivering plain old electricity, and you can’t store it,” said Greg Rislov, advisor to the commission. “You can’t tell one electron from another.”
Customers don’t care where that electron came from, and there’s nothing trendy about power. People just want it as cheaply as possible.
Rislov said power is cheapest when companies can pay for the costs of power plants and other infrastructure over many years, by owning their own generation facilities and committing to serving a market for the long term.
If consumers have a choice and competitors enter the market, “You’ve introduced a number of companies who don’t know how many customers they’re going to have month to month and year to year,” he said. They don’t invest for the long term — for example, building cheaper plants that burn natural gas, which is more expensive for consumers. Or, they’ll buy power from other providers, who build more profit into the transaction.
The cost of the Wygen III power plant that is part of Black Hills Power’s rate-increase request would be depreciated over 50 years under the proposed settlement.
“If you’ve got to recover your money in five years instead of 50 years, you’re going to have a different business plan,” Rislov said.
There was some call in the 1990s for South Dakota to follow a national trend of deregulation, Burg said.
White said: “There’s always an interest in what’s new and trendy. The challenge is making sure it makes sense for the constituents that you serve.”
White lobbied then against the change. He recalled the argument, “Because we’re on the low end, all we can do is have our prices rise to meet the aggregate market.”
The push to deregulate in other states came from large industrial businesses that buy big volumes of power.
“In some states it probably worked OK for industrials, but by and large, the residentials have seen higher prices as a result of this restructuring,” White said.
Consumers were also eager for rate relief, Burg said. In some markets, such as Montana, utilities themselves pushed for the opportunity to restructure their businesses.
Burg said one lawmaker introduced a deregulation bill in South Dakota back when there was discussion about it. “It didn’t really go any place,” he said.
In South Dakota, which became regulated on a statewide basis in 1975, commissioners and lawmakers largely resisted the trend.
“We kept our eye on the ball,” Rislov said. “We didn’t give in to a lot of agendas that had some short-term beauties to them. We wanted our utilities to provide service in the long term at the least cost to the residential ratepayer.”
That strategy seems to be paying off with rates that are relatively low compared to the rest of the country, which is remarkable considering the higher cost per customer for transmitting power long distances, because more line is needed to serve each customer in a rural area than in an urban area.
“Frankly, I’m tickled to death our rates are as low as they are,” Rislov said. Only four states had rates lower than South Dakota’s average of $0.0715 per kilowatt hour as of February, according to the United States Energy Information Administration: Iowa, Missouri, North Dakota and Nebraska. All regulate investor-owned utilities, the private electric companies owned by shareholders.
South Dakota’s current rates would increase if Black Hills Power’s settlement is approved, but what the Rapid City utility proposes would still be less than the current national average.
Under the proposed
settlement, all-electric residential customers would pay $0.0825 per kilowatt hour, up from the current $0.0681. Regular residential customers would pay $0.1020, up from $0.0841.
“There is not a single deregulated state in the United States of America that has cheaper energy than South Dakota,” Johnson said. Today, “You don’t see states moving toward deregulation in electricity. The proof is in the pudding.”
In fact, states that tried it are reversing course.
For example, a 2007 effort in Illinois to secure market-based rates for consumers failed, in part because power sellers were too closely connected to power buyers.
“This is a system that is rigged to lead to higher bills for consumers,” said Jim Chilsen, spokesman for the Citizens Utility Board, a Chicago-based consumer advocacy group that tracks regulation and looks for ways to help power customers save money.
“What happened instead was that electric bills went through the roof. They doubled and tripled in some cases.”
Citizens protested, and state lawmakers put in place a new power pricing system and a new state agency to regulate it.
“Our experience has been, unfortunately, that deregulation or competition experiments in other states have led to higher rates,” Chilsen said.
He said healthy competition should lead to lower rates, but not all deregulated systems have established healthy competition, where customers can make informed choices about power purchases.
“The lesson is that there is a need for reasonable oversight of the electricity market,” Chilsen said.
Barbara Soderlin – Rapid City Journal staff
June
22
2010
Growing number of energy supply companies implementing TPV to prevent fraud.
SAN ANTONIO, TX, June 17, 2010 /24-7PressRelease/ — Across the U.S., a growing number of states are deregulating their energy supply industry, offering more options and services for consumers. In response, state lawmakers are putting in place consumer protection regulations to ensure buyers review and approve contract terms and conditions often using third party verification services when they switch energy companies.
Many states, including California, Connecticut, Florida, Pennsylvania, Maryland, Texas, New York, Illinois, New Jersey, Massachusetts, Ohio, Delaware, Michigan, Virginia, Kentucky, Rhode Island, as well as the District of Columbia have implemented some level of deregulation. Some of these states now recommend or require third party verification as a best practice to mitigate fraud.
“The third party verification process has evolved into a multipurpose service to improve the customer experience and now can be utilized in almost any industry,” said John M. Reistrup, Senior Vice President of Marketing at BSG, which offers VoiceLog , a leader in the call recording services industry. “As a third party, we are able to validate that customers do indeed wish to switch service, and for merchants and regulators alike, they have a record of that agreement. We confirm the transaction is authorized, that the consumer agrees to make the switch, and that they fully understand the terms of the contract. This gives customers better peace of mind and control over the process.”
While some energy supply companies operate their own internal verification processes, to consumers and regulators, this can be perceived as a conflict of interest. That’s why many companies are opting to use third party verification services such as VoiceLog which are impartial to the results of the sale.
Clients using the recently enhanced VoiceLog platform can gain immediate access to recorded calls on the state of the art system, allowing them to process quality assurance for their vendors at any time. The records also drive sales by allowing clients to track progress toward nightly targets and bonus amounts.
“Our clients tell us that with VoiceLog services they get lightning quick response time on all issues, from password changes to script changes,” said Reistrup. “We are also known for providing extremely high accuracy levels across the board.”
With the broadening market, energy suppliers’ expanded sales tactics warrant more controls.
“What we’re finding is that in some states that have been deregulated, energy suppliers have saturated the industrial and commercial markets, and are now moving to small businesses and the residential markets through door-to-door and telemarketing sales, making the third party verification process even more important,” added Reistrup. “As a result of this expanded sales channel, companies want to ensure that consumers really have authorized the switch. With more states moving toward deregulation, we expect to see an even greater demand for verification services.”
June
20
2010
For nearly a decade, Pennsylvanians paid the same rate for electricity with no increase in price to account for inflation and global increases in commodity prices. No other commodity in Pennsylvania was price-fixed this way. Not natural gas or heating oil or water.
Yet for some reason, the end of electricity rate caps in Pennsylvania was predicted to be the apocalypse for businesses. But Jan. 1, 2010, came and went, and doomsday never arrived.
In fact, Pennsylvania has a good story to tell when you look back at the first quarter of electric competition in the PPL Corp. service area and look ahead to the opening of the Allegheny/West Penn market locally in 2011.
No less than 27 power providers are competing to serve residents, businesses, schools, universities, hospitals and units of local government where PPL used to have sole purview — and such competition can mean lower rates for customers. As a result, in only three months, 363,000 residential users opted for a new company to deliver their electric needs.
PPL estimates that 55 percent of large industrial users have taken advantage of the competitive marketplace and switched to other suppliers, as well. As important, this doesn’t include the businesses that have weighed their options and exercised their choice to stay with PPL.
After only one quarter in an open electricity market, it’s already clear the entrepreneurial spirit of Pennsylvania is alive and well. Businesses, universities and local governments are making smart decisions that not only help their bottom line, but that also provide stability across several industry sectors during an uncertain time in our national economy.
That level of performance reveals how Pennsylvania is well on its way to having one of the most successful competitive markets in the nation.
States from Texas to New York have opened their electric markets to retail competition but none had shown such immediate and dramatic results. Pennsylvania’s numbers will continue to grow as more businesses and other customers explore an open and competitive market — and as new marketplaces open on Jan. 1 for customers in areas serviced by Allegheny Power, Metropolitan Edison, PECO and Penelec.
While it’s early to forecast savings for Pennsylvania’s electricity customers, we can look to the experience of states like Illinois that have had competitive electricity markets for more than a decade. Over that period it is estimated that retail customers saved in excess of $1 billion. Pennsylvania has made the right decision for the long term.
Competition also has bred the development of new products and services not typically found in closed, monopoly-regulated markets. Today’s market opens the door to new possibilities for businesses to embrace environmentally friendly and cost-effective alternative energy sources such as wind or solar energy.
For example, the Harrisburg Regional Chamber and Capital Region Economic Development Corp. did something many would have thought impossible a few short years ago; it purchased wind energy certificates to power its Business Expo.
New energy companies in the PPL market also are challenging each other on new technological fronts to provide savings for their customers. Businesses no longer have to wait for monthly electric bills to set energy budgets; they can monitor their energy usage on more frequent intervals. This gives businesses the opportunity to plan ahead as to how they use energy, depending on what it costs at any given time.
Energy companies vying for business in a competitive, open marketplace foster innovation and new technology. In time, as customers become more sophisticated in exploiting the power of competition, they will demand greater innovation and specialized services from electric suppliers, and new products and services will be developed that provide greater control over energy usage and how that energy is generated.
The development of competition helps families and businesses control energy costs and allow units of government to preserve ever-shrinking resources. Such possibilities would never have developed under the old regulatory system.
Pennsylvania policy makers have developed a well-structured environment for competition to flourish — which will bring many benefits to Pennsylvanians for years to come.
June
16
2010
Why is the model for the Texas Energy Deregulation?
started in late 1999, Texas and 22 other states had their own electric utility deregulation. Since then, Texas has learned from a typical utility regulated by the State in an electrical system that 75% is converted deregulated, so the majority of the population, both the electric service provider and a service plan to choose their dresses of life.
While only a handful of states haveproblems encountered in implementing their versions of deregulation, Texas all have is to follow as a model. Why? Texas is the number one consumer of energy in the country. Texas produces and consumes more electricity than any other state. And despite the enormous amount of energy applied to the state every day, the Texas deregulated its electricity market success.
Ten years ago, Texas faced many of the same problems the rest of the country under the current regulatedSystem. The stagnant sector, were made some improvements in the infrastructure of electricity utilities to improve their efficiency in producing, transporting, measuring, and electricity. The construction of new power was often a slow bureaucratic process, as the utility companies had to negotiate with public regulators, both to build new generation plants and as a way to pass the cost on to consumers. Developments in green energy have been underfunded and barely went beyondin the experimental stage. The sector had little incentive to improve service or replace with new technologies because they had a monopoly, you were a profit, happy that their players guaranteed.
Across the country, however, required more and more people are becoming more electricity. Already the second largest population in America, Texas is still one of the fastest growing States in 2040 and is expected to more than 50 million. Houston, Dallas and San Antonio are beingthe 10 areas populated metropolis in the country. The Austin area alone should be five times the current population over the next 30 years ball.
Texas is the second largest economy of the United States (world 15), with an annual production of over one trillion dollars. Unfortunately, Texas also emits 10% of the total U.S. “greenhouse gas”.
The growing concern about climate change and the environment has prompted state and federal mandates for governments to passDevelopment of new green energy alternatives. ERCOT estimates that peak demand for electricity in Texas at an annual rate increased from 2.5% in 1990-2006 and is equally experienced high annual growth from 60,000 to 80,000 megawatts (MW) of new generating capacity by 2030.
State regulators and industry experts quickly realized that the regulated supply, the agility to meet the needs of the 21st Century, was missing.
Why didTexas happened?
There are four reasons why the market is deregulated utilities in Texas has failed. The first is that deregulation stimulated investment in new power generation to meet demand and add reliability. Where companies once had the power of the state for permission to petition the regulatory authorities to build now, if they see potential for profit bodies. In Texas, which led to an investment of over $ 25000000000 39 000 MW of new generation and to ensure that investors do notConsumer took the risk on the sale of all electricity. Most of these investments were to reduce emissions from power stations to gas. Today, more than half the electricity comes from the Texas natural gas. Texas produces 25% of the nation and is the largest producer of natural gas, storage and distribution of natural gas through a pipeline to all regions of the country.
The investment and construction of generation capacity is also needed something that Texas as a state growing rapidly:Reliability. For example, on a hot July day, the electricity demand in ERCOT region threatens to overwhelm both generators and wires. The result would be a blackout of large parts of the state. With the construction of additional generating more electricity can be generated for the establishment of the system is inadequate. In addition, several generators are brought online, it is necessary to load generators, maintenance or upgrades.
The reason is that the next restructuring has led the growth of moreefficient technologies for less environmentally friendly energy. Over the years, regulated utilities and the development of alternative energy innovation languished, rarely passed the stage of demonstration. But rising energy costs and environmental concerns have brought new generation of heat and power, CHP and green electricity. Nationwide, there is a huge demand for green energy, customers are now more aware of greenhouse gases andClimate change. New company to sell green electricity are more than a decade ago. This is not only because it is popular, but companies also see that green energy sources are cheaper to maintain than conventional long term. Two of the greatest innovations in green electricity in Texas will wind and solar.
Currently, Texas leads the nation in wind-generated energy, with over 9,000 MW of installed wind power. More than 2,000Wind turbines operating in the mountains of West Texas alone, and the number continues to increase with decreasing costs and improving wind turbine technology development. In 2007, the first state of Texas for the cornerstone of a giga-watt wind capacity was installed in a single year to achieve. A 736 MW, the Hollow Wind Energy Center of Central Texas Horse is the world’s largest wind turbine. Recently closed status of a plan for an increase of 17,000 MW of wind Take ThatRenewable federally mandated Portfolio Standard (RPS) years ahead of schedule.
Despite the defeat in 2009, a diet plan of $ 500 million to develop solar power alone in Texas, interest in the use of Texas is still lucid. A study by the University of Texas found the same state could generate 123,000 new jobs by moving aggressively into the direction of solar power panel manufacturing and installation. Several groups are already lobbying the governor for a plane target1000 MW of solar energy by 2015 and 5,000 MW by 2025. In March 2010, Texas State Energy Conservation Office awarded the City of San Antonio $, the University of Texas at San Antonio and St. Philip’s College, about 3.7 million of grants for investment in new capacity for distributed solar energy. This is three times the amount of central solar capacity of 600 kilowatts (KW). Finally, design improvements through two Texas companies, and ExeltechEntech Solar, both of Fort Worth, will install solar panels on roofs more easily consumers’.
The third reason managed deregulation, restructuring of the electricity grid is state of Texas. The operation of the Network of Texas has changed, to maximize their efficiency and increase reliability. Neither had settled from the drawing board for years. Indeed, a hold over time is that the grid of Texas largely separately from the rest of the country andface significant challenges, power supply networks in both Texas and the rest of the country. Despite this, Electric Transmission and Distribution Utilities (TDUs) transmission, the cost could be lowered, both in terms of power to reach the market and reducing waste of energy consumers.
In 2008, Public Utilities Commission of Texas (PUCT) energy savings targets of 20% of load growth in Texas Utilities 2009. This means that if the increaseMeasured demand of 10 MW, Texas Utilities to save to 2 MW through efficiency measures. To achieve these objectives, the TDUs manage incentive programs, while retail electric provider of energy services and efficiency of program implementation. The programs are open to all customers and aim to reduce system peak demand, energy consumption or energy costs.
TDUs incentives or rebates paid to the participants of the program for installing high efficiencyDevices that produce a measurable and verifiable demand savings (see http://www.texasefficiency.com). TDUs pay incentives directly to individuals. residential participants rather than efficiency must go through a third sponsor for energy measurements installed in their homes. Residential-participants can not act as sponsors and self-efficiency measures are paid for equipment installed or go directly to her third.
The programs havebeen very successful. Between 1999 and 2006, energy efficiency programs have reduced peak demand by 000 kW and 756 saved 2,005,000 kilowatt hours (kWh) per year. Texas Utilities reported the effectiveness of the program savings of 457 megawatts 808 hours (MWh) in 2007.
Wind energy is affordable only if you put on the market. In February 2009, the PUCT projects allocated for data transmission at five billion dollars) Crezia be built around, Texas ‘Competitive Renewable Energy Zone (. L’Crezia power-line projects is one of the largest projects to improve power transmission in the history of the state. The new lines will be in service within four or five years, finally, the transmission 18 456 MW of electricity generated by wind from the West Texas town to power-hungry state.
The ultimate reason for success is that deregulation and the dismantling of monopolies and introduce competition in the market. After all, is a reliable stream and growing throughoutManagement of supply and demand. So instead of a society, power, power transmission and accounting for power in a one-size-fits-all format integrates the current wholesale and retail competition. Generation is separated from the retail sector. Because traders and their customers can choose where to buy power, enterprises are forced to produce more energy efficient because they compete with other generating plants in other counties – andsome cases in other states. Retailers must now be more efficient and prudent in their purchase and sale of power.
It is no secret that the process of liberalization of electricity in Texas has been rocky. Part of the reason is volatile fuel prices caused by international political and economic turmoil over the years. However, markets do not guarantee work, at the lowest possible price. She likes, also fails to ensure the best possible price to a customer. Of course, ifSearch for the best price, be it food or fuel, consumer information is the best friend. In a liberalized market, consumers will save on electricity bills for Texas to keep competitors informed about their energy, their amount of energy, and their energy supplier. The quickest way to reduce the electricity bill could mean about , shopping for a better offer.
For example, people living in a community of Fort Worth recently had older eyesopen when the columnist Dave Lieber found the Fort Worth Star-Telegram that many were paying as much as 14 or 15 cents per kWh. Why? Perhaps because many had only the old utility monopoly known all my life. Were for the state makes the choice and pricing in use. This was an incident in which some information can only save a lot of money.
Remember, the place to start shopping is Powertochoose.org.
The last ten years have brought more reliabilityTexas’ growing energy needs. The old system could never have kept regulated. Because of deregulation, are creating more developments and innovations to make green energy more efficiently. There are now more reliable in terms of transmission efficiency of cutting both waste and energy costs in Texas. Finally competitive generators and retailers have encouraged them to reduce costs, provide better services at lower prices for consumers.
June
15
2010
A lot of focus in North Dakota lately has been on traditional energy with the discovery of the Bakken and Three Forks formations.
But, a summit at Bismarck State College today is reminding people that our state also has a lot of renewable energy potential.
Speakers at the renewable energy summit say the country needs to invest in all forms of domestic energy, rather than depending on foreign oil.
There`s wind, biodiesel, solar, and of course, our traditional sources like oil and coal. Former NATO supreme allied commander Europe, Gen. Wesley Clark (Ret.), says we need them all here in America instead of shipping $300 billion a year overseas — for the sake of our national security.
“That`s more than the cost of the health bill, more than the cost of the way in Iraq, plus the war in Afghanistan. That`s all the research and development in the United States. That`s your kids` education,” said Clark, Growth Energy co-chairman.
Clark says our nation`s entrepreneurs have the know-how to develop renewable energy that will break the dependence on foreign oil. But, the investment can`t be done unless there`s demand for it, and he says that has to come through policy from the federal government, like tax incentives and mandates.
Clark asked, “Why can`t we have a vision that says, `We`re moving to a new, more sophisticated energy policy that strengthens America`s domestic energy production and reduces what we`re importing from abroad,`?”
Sen. Byron Dorgan, D-N.D., says Congress is working on a national energy policy that he says needs to focus on getting North Dakota`s energy to the rest of country.
“We already produce far more than we need,” explained Dorgan. “We need the conveyance. We need the pipelines to move product out of here. We`re working on that now and we need a modern transmission system that moves what we can produce here to the parts of the country that need it.”
Dorgan says this kind of policy will allow us to look back and say North Dakota played a major role in advancing the country`s energy industry through both traditional, and renewable sources.
Dorgan says he believes legislation will make it to the Senate floor for debate by the end of the summer.