New Rates for ComEd Include Increase in October; Big Savings Available by Shopping for Power
Commonwealth Edison , which serves customers in the Chicago area and surrounding areas of Illinois, has posted electric rates for the 12-month period beginning June 1, 2012, and although the summer rates are marginally lower, electric rates for the non-summer period of October 2012 through May 2013 will be higher, despite the currently low electric rates available in the market. Customers can avoid the rate hikes and maximize their savings by shopping for a low electric rate with SaveOnEnergy.com. For example, for non-residential customers, ComEd’s electric supply charge for the summer period (June through September) is only about 11% below the current rate. However, savings of 30-40% are available by shopping for a lower electric rate from a competing electric supplier . But what’s worse is that after these meager summer savings, ComEd’s electric rates are set to rise in October, with rates not just higher than the summer rates,
Increase in Texas Power Price Cap Could Bankrupt Retail Electric Providers; Find a Financially Viable Provider With SaveOnEnergy.com
The proposed increase in the wholesale electric market price cap in Texas to $4,500 per megawatt-hour, previously discussed by SaveOnEnergy.com , could lead to retail electric providers going out of business, state officials have warned, with such fears privately expressed by several retail electric providers as well. In order to ensure the state has enough power plants to serve increasing demand, the Public Utility Commission of Texas has proposed raising the wholesale energy price cap, which is currently at $3,000/MWh, to $4,500/MWh, effective August 1. The higher price cap, which is rarely hit during the year, is meant to incent the building of new generation, as current generating capacity cannot meet projected demand in the future. However, the August 1, 2012 effective date has raised concerns that it does not give retail electric providers , who buy power in the wholesale market, enough time to prepare for the higher price
Texas Electric Rates Still at Historic Lows, Now Is the Time to Shop
Even as summer approaches, retail Texas electric rates remain at historic lows, making now the best time to shop for a new energy provider with SaveOnEnergy.com. Texas electric rates always go up in the summer as air conditioner demand pushes up prices. But this summer, as previously noted by SaveOnEnergy.com, power prices in Texas are expected to be especially high and volatile because of (1): a shortage of excess generating capacity and (2) an expected 50% increase in the wholesale electric price cap to $4,500 per megawatt-hour. While these factors are already raising the “forward” wholesale prices in Texas — meaning power bought today for future delivery — current retail electric rates remain at historic lows, so customers should take advantage of the market-leading rates on SaveOnEnergy.com while they still can. For example, fixed electric rates for residential customers in Dallas and Ft. Worth , in the Oncor area, are
Customers at Entergy Texas Paying Higher Rates but Can’t Shop for Power
Although most of Texas is open to electric competition which allows customers to save money on their power bills by shopping for a low electric rate , significant parts of the state are still subject to a monopoly utility provider, where customers cannot escape the monopoly’s high rates. While a small number of customers at one of these monopolies, Entergy Texas , may soon have a limited ability to shop for their energy supply, the proposed program has fallen short of expectations that it would provide meaningful competition to customers. The high rates charged by monopoly utilities in parts of Texas not open to competition (El Paso Electric, Entergy Texas, etc.) puts businesses in those areas at a competitive disadvantage versus their competitors in parts of the state open to electric choice , where electric rates are lower. Nowhere is this more clear than at Entergy Texas, whose service area
Texas Power Prices Already Rising in Anticipation of Higher Price Cap
Wholesale electric rates in Texas are already rising in response to a draft rule from the Public Utility Commission (PUC) of Texas which would increase the price cap in the wholesale market by 50% this summer, with such costs assuredly being passed on to retail electric customers . Due to shrinking reserve margins — or the amount of “extra” generation capacity available on record-setting hot days like Texas had last summer — the PUC has moved forward with plans to raise the price cap in the wholesale electric market , which is currently $3,000 per megawatt-hour (MWh), or $3 per kilowatt-hour — or about 4000% higher than current retail electric rates . Regulators believe a higher price cap is necessary to incent new generation and assure new entrants of being able to recover the sunk costs of building a 20-30 year investment such as a power plant. The price cap
Downsides of Opt-Out Aggregations Revealed as Plans Move Forward
SaveOnEnergy.com has previously detailed the many myths and problems with municipal opt-out aggregations, under which local governments switch customers to a new electric supplier of the town’s choosing. Now that some 200 Illinois municipalities are moving forward with the opt-out aggregations, these problems are becoming evident. Most notable is that cities and towns with aggregations are trying to create a one-size-fits-all electric rate , but such rates don’t maximize the savings available to electric customers . The savings available through electric choice come from tailoring electric products to meet customers’ individual electric load and usage patterns, as SaveOnEnergy.com does through head-to-head competition. Electric choice also gives individual customers the power to choose products that appeal to them (such as premium products including green energy , or low-cost “value” products). By lumping all customers together in one aggregation, low-cost customers subsidize customers with a higher cost of service, which decreases the
Some Texas Small Businesses May Soon Get Relief from “Ratchet” Charges
Some Texas small businesses and other small volume electric customers — such as ball fields, churches, and the like — may soon get relief from the “demand ratchet” which currently subjects these customers to higher electric rates . A demand ratchet is a mechanism by which electric rates are billed based on either the peak demand by a customer in the current month, or some percentage of the peak demand for that customer during previous months. For example, with an 80 percent ratchet, if a customer were to demand 100 kW during August, that customer for the next 12 months would pay based on either actual monthly peak demand, or 80 kW (80 percent of 100), whichever is greater. If, in September, that customer had a peak demand of only 50 kW, the customer would still be charged based on 80 kW — 80 percent of the annual peak demand
Sharyland-Cap Rock Customers a Step Closer to Choosing Their Own Electric Provider
Granting customers in the Stanton, Colorado City, Brady, and Celeste areas the right to choose their electricity provider took a step forward last week as most parties to a case before the Public Utility Commission of Texas concerning the transition to retail choice at Sharyland Utilities’ former Cap Rock service areas agreed to a settlement governing the transition. The settlement still requires approval from the Public Utility Commission, but is only opposed by a single party. Parties signing the settlement include Staff of the Public Utility Commission, Sharyland Utilities, the City of Brady, several retail electric providers , and other parties. As SaveOnEnergy.com previously noted, some 44,000 customers in what used to be the service territory of Cap Rock Energy (now part of Sharyland Utilities) cannot currently choose their electric provider , a right extended to most other customers in the state, including customers in Dallas, Houston, and Corpus Christi.
Most Illinois Opt-Out Aggregations Approved; Illinois Electric Customers Must Exercise Right to Shop for Lower Rates
On the March 20 ballot, close to 300 Illinois municipalities had referenda seeking voter approval to institute “opt-out” municipal electric aggregation programs. Under these programs, customers are automatically switched away from their utility (ComEd or Ameren) for their electricity supply , and are placed with an alternative retail electric supplier chosen by the municipal government, unless the customer affirmatively opts out. SaveOnEnergy.com has previously documented the problems with opt-out municipal aggregation, including most prominently the fact that the savings from these programs are meager, and customers can get lower electric rates by shopping individually for an alternative retail electric supplier. In fact, current savings available from electric suppliers competing for customers on SaveOnEnergy.com are nearly triple the savings offered to customers by opt-out aggregations. However, most of the Illinois opt-out municipal aggregation programs on the ballot were approved, meaning customers must be ready to exercise their right to “opt out”
Texas Regulators Poised to Raise Electric Price Cap to $7,500, Or More
Commissioners on the Public Utility Commission of Texas (PUC) have made clear that the current wholesale electric price cap of $3,000 per megawatt-hour (MWh) will be increased, with the only remaining questions being how high, and how soon. Last week at a PUC open meeting, all three commissioners expressed support for raising the price cap, with two of the commissioners suggesting that the cap should be raised to as high as $7,500/MWh. One proposal would raise the price cap in time for this summer, effective July 1, 2012. As SaveOnEnergy.com has previously noted, raising the price cap is being pursued as a solution to the generating capacity shortage facing the Texas electric grid , where supply is expected to barely meet demand this summer. Why is raising the price cap seen as necessary? Investors capable of developing new power plants in Texas are hesitant to build because any new capacity