EnergyWindow, Inc.: MarketElert(TM)

11/21/2008

EnergyWindow MarketElert ^TM - April 2004
www.energywindow.com

April Elerts

Maryland - The Maryland Public Service Commission has announced the successful conclusion of the bidding process to secure Standard Offer Service (SOS) for Maryland investor owned utility electric customers. Commercial energy charges will rise more than 30% in some cases. Conectiv has posted their new SOS rates. Pepco and BG&E will post their SOS prices by April 30, 2004. Allegheny Power will post theirs by July 1, 2004. See Maryland Standard Offer Order.

Virginia - Dominion Virginia Power made two filings on April 2, intended to encourage competitive suppliers and end-users to participate in the Virginia market. The filings propose that:

the wires charge reduction in the pilot programs be increased to 100%

bids in the Competitive Bid pilot be open for a specific period

the 60 day enrollment period for Commercial & Industrial Pilot lottery winners be linked to switch rates

pilot lottery winners be notified of the new rules and eligibility to shop for a competitive supplier when the revisions are approved and again when switching rates trigger the start of the 60 day period.

See Dominion Pilot Revisions Release for more.

New Jersey - All BGS tariffs were approved by the Board of Public Utilities, as presented. More at www.bgs-auction.com.

A Basis For Gas Savings - Despite High Markets

With prices so high, gas bills are getting a lot more attention. But what strategy can you adopt when gas prices are high and the trend unclear? In most gas markets, the default rate customers pay for the commodity is variable and based on wholesale prices. This commodity rate is referred to by such terms as "gas cost adjustment," "gas recovery cost," or "gas sales price." These prices are usually determined monthly or, in some cases, quarterly and are calculated using a combination of wholesale market prices and a formula approved by the public service commission. Current and historical prices can be found on the public service commission or distribution company web sites.

Comparison of
NYMEX Henry Hub,
CGOH CGRR,
Indexed Price, and
Fixed Price

One simple procurement strategy is to take out a contract where the price you pay monthly is equal to a wholesale price index (the NYMEX Henry Hub, or NYMEX HH, for example) monthly settlement price plus a fixed basis value. Assuming the price you would otherwise be charged by your Local Distribution Company (LDC) is also reasonably correlated to the same index, you may be able to save month-to-month, as long as your supplier provides you gas at an indexed price with a lower basis.

Often suppliers are willing to grant you an option to "trigger" a fixed price for an extended period of time (or to allow a one-time conversion to a fixed price) as part of the bargain. This lets you enjoy lower variable prices for a time and then switch to a fixed price for a longer period of time (or the remainder of the contract in the case of a conversion) when futures prices decline significantly. Once the contract is in place, executing a trigger or conversion is very simple and fast, using a simple notification process.

With prices high and with, hopefully, some potential for decline, executing a contract now might yield some modest savings while allowing quick action, should futures prices drop later this spring or summer. Click here to see an illustrative case study and graph.

Quick Buyers' Tip
In addition to keeping informed about regulatory and market changes, you should also stay abreast of changes among suppliers. Management, marketing and pricing strategies change frequently in the retail energy world, and there are players entering and exiting markets routinely. It pays to talk to suppliers and break out of your comfort circle to be sure you're getting the best deal available.