Energy Broker vs. Energy Advisor

By AJ Brockman

In the video above, we shared with you the three main differences between an energy broker and an energy advisor.

Regardless of who you choose to work with, your advisor or broker should perform specific functions to ensure you’re getting the information and assistance you’re looking for. Below are 5 questions you can use to evaluate your current energy professional.

Does your current advisor or broker…

1) …perform bill audits?

A good energy advisor or broker should perform complimentary bill audits, especially when you sign with a new supplier or switch products. They should check that your invoice are formatted correctly and contain your contracted per-unit rate and product.

If any of these are incorrect, will your current energy professional work with the supplier to fix it?

2) …send you newsletters or post blogs?

The energy industry is constantly evolving. It’s important you stay informed on energy news and changes in law that could impact your facility.

Does your energy professional send you market updates in a monthly newsletter or blog?

3) …serve all C&I customers?

If you have facilities in multiple cities or states, it’s in your best interest to work with someone who can service your entire portfolio.

Can your current advisor or broker serve all utility rate classes in all deregulated states based on state requirements?

4) …monitor the market?

The energy market changes day by day and hour by hour. An experienced advisor or broker realizes this and actively monitors the market, notifying you when it’s the best time for you to lock in a rate.

When did you last receive a market update?

5) …proactively contact you about renewing?

This goes hand-in-hand with monitoring the market. Waiting to look at renewal rates a couple of months before your contract expires doesn’t give you much time to:

  • review your energy strategy,
  • time your purchase, or
  • get multiple pricing offers.

Has your current advisor or broker contacted you about renewing your contract — especially if it expires in the next 6-9 months?

Evaluate your energy professional.

There’s a lot more you should expect from an energy broker or advisor than just giving you a low rate. Does your current energy “guy” meet these criteria and your needs? Use this checklist and see for yourself.

The (Not-So-Distant) Future of Energy

By Michael Zaura

One question I’ve been asked over the past few weeks is: “What future energy trends are you seeing, and how will they impact my business?”

As an energy advisor, I don’t take this question lightly. Keeping up with energy news and understanding how emerging technology will affect the energy market is important for current and future planning.

Recent energy news stories can give you a sense of where the industry is headed. 3 items you’ll want to keep an eye on are:

  1. Renewable energy generation,
  2. Energy storage technology, and
  3. The US-China trade negotiations.

Renewable energy generation is hitting new highs.

Renewable energy sources are rapidly increasing their foothold in our electricity supply. Just a few months ago, renewables surpassed coal as the top electricity generation source. In 2018, renewables accounted for about 17% of US electricity generation. This number is expected to grow as more solar panels and wind turbines come online.

Renewable energy options are more available and economical than ever before. Users are buying more “green energy” as opposed to traditional “brown energy.” Customers of all sizes — including businesses like Starbucks — are taking advantage of this opportunity in the market. Utilities across the country are offering new incentives for solar projects for both residential and C&I consumers.

Just 5 years ago, renewables were considered too costly and weren’t generating enough supply to make an impact. Overtaking coal this quickly shows us that renewables will be a big part of energy discussions and strategies going forward.

Energy storage is becoming more prominent.

As renewable generation increases, where is the excess generated power going?

The answer: batteries.

Energy storage is important. It’s also important that the stored energy can be dispersed when it’s needed. Think about a facility’s solar panels. Those panels are generating electrical energy while the sun’s out. When the sun goes down, the facility can use its stored energy to keep the lights on instead of going to the grid. However, if the battery can only hold an hour’s worth of power or can’t release the power efficiently, it won’t be very effective.

While the technology is good right now, the research being poured into it will only make the products better by increasing their capacity and flexibility. The “next big battery breakthrough” is coming. And as the companies developing these batteries continue to advance this technology, our energy future is only looking brighter! (get it?)

International events are impacting energy.

One topic the media has incessantly covered is the US-China trade negotiations. As the current world leader in natural gas and oil production, the US has some leverage in these talks. China is the #1 importer of liquefied natural gas (LNG), and the US is one of the world’s top 3 LNG exporters. Energy minds think this is great for trade, but it could also drive electricity and natural gas away from historically low rates.

Our clients usually ask us to look into our “crystal ball” and give our opinion where the energy market is going. No one know when these trade talks will conclude or how they might shake out. Acting now on historically low energy rates has yielded great savings for our clients over the past few years. How long this pricing environment will last is anyone’s guess, but the outcome of the trade talks is something we’re all watching very closely.

Keep these energy topics on your radar.

So, which one of these trends will have the greatest impact on your business? Chances are, it may be all of them, whether directly or indirectly.

  • Depending on your organization’s sustainability goals, buying green energy through RECs or even investing in hard assets for your facility may be a consideration down the road.
  • Having a reliable battery as an on-site source of energy in the future could keep your facility up and running during a blackout.
  • Lastly, whatever the outcome of the trade negotiations, it makes sense to review your current energy purchasing strategy now while the markets continue to produce historically low pricing.

The chances of rates declining much further are far less than them increasing at a faster pace. Feel free to give me a call or comment below if you’d like to share your thoughts on the future of energy.

 

About the Author

Michael is a Senior Strategic Energy Advisor in the Chicagoland area. He specializes in manufacturing, hospitality, transportation, and renewable/green energy. Michael helps his clients craft energy strategies specific to their current and future situations. He is passionate about renewable/green energy and its growth, continuously learning through reading and sharing publications. He enjoys spending his spare time with his wife, daughter, and triplet boys.

Michael can be reached at (630) 225-4556 or via email at mzaura@naniaenergy.com.

New Maryland Renewables Law

By Mike Eckenroth

On May 22, 2019, Maryland Governor Hogan allowed Senate Bill 516 — Clean Energy Jobs Act to become law. This new law increases Tier 1 Renewable Portfolio Standards (RPS) compliance to 50% by 2030.

In other words: it mandates that 50% of Maryland’s energy comes from renewable sources by 2030, which is an increase from the previous goal of 25% by 2020.

How does this impact you?

For all electricity consumers in Maryland, this translates to an increase in costs to fund the renewable goal. The chart and graph below show the incrementally increasing RPS requirements and the estimated impact on electricity rates by year. By 2028, a facility who uses 2,000 MWh will be paying over $10,000 more per year in electricity costs.

Maryland RPS Increases

Maryland Renewable Energy Requirement

 

This cost increase IS avoidable!

You are eligible to lock the existing RPS rate and avoid this cost increase.  Those who sign an electricity supply agreement before October 2019 with a participating supplier will be “grandfathered” under the current and lower RPS costs for the duration of the agreement.

Take action today.

It’s not often that you have the chance to completely avoid a new regulatory fee in the energy industry. Please reach out to me to take advantage of this opportunity and learn how it will benefit your business.

About the Author

Mike is a Senior Strategic Energy Advisor based out of Baltimore, Maryland, with a strong engineering and purchasing background. His specialties include energy efficiency and strategic commodity procurement. Growing up in the shadow of Three Mile Island nuclear power plant, Mike has an intimate stake in a grid with safe, reliable, and cost-effective energy generation — which he leverages into an energy strategy that provides security for his clients.

You can reach Mike via email at meckenroth@naniaenergy.com or phone at 443-833-8224.

The Best Energy ABCs in Illinois

By John Nania

Each year at Nania Energy Advisors, hundreds of Illinois businesses contact us about their electricity and natural gas needs. Because so many trust our advice, they often ask: “Who are the best ABCs (Agents, Brokers, and Consultants) in the business around here?”

Below is a list of companies that have solid reputations for helping businesses with electric and natural gas purchases. A couple of caveats:

  1. The ABCs on this list can assist with both electricity and natural gas purchases — not all ABCs do. Most just focus on electric, and only a handful really understand or transact for natural gas.
  2. There are many qualities that a good ABC needs to have. This is by no means an exhaustive list, but at a minimum each company on this list embodies these qualities:
    1. Great supplier relations
    2. Quality customer service
    3. Experienced professionals providing accurate and timely advice
    4. Good reputation

If an easy energy buying process is important to you, you have good options to choose from. Here is the list of the best ABCs in Illinois.

Best Electric ABCs

Large Electricity Purchases (> 10 million kWh/yr): Transparent Energy

Transparent Energy has built a reverse auction platform that is second-to-none in the nation. A reverse auction is like eBay in reverse — all suppliers are bidding blindly against each other in a live event to achieve the lowest possible price.

Transparent provides clients with the absolutely lowest cost purchase by creating competition from every supplier in the Illinois market. They’re masters at ensuring you have an apples-to-apples bid comparison. The auction platform is great for public institutions in particular because of its recorded, completely transparent process.

Midsize Electricity Purchases (2-10 million kWh/yr): Satori Energy

Dave and his team at Satori have a solid group of seasoned, well-trained analysts and great relationships with suppliers both in Illinois and nationally. Headquartered in Chicago, Satori started their firm at the beginning of the deregulated electric market in the early 2000’s. They’re often a gateway for new suppliers who will aggressively price their products to get started in a new market. They also have their own proprietary reverse auction platform.

Small Electricity Purchases (< 2 million kWh/yr): Lower Electric

Ira and Bill have a boutique shop in Northbrook that caters to small and midsize clients — quite often those with multiple locations. They provide a personalized touch and are skilled at tailoring innovative solutions to meet individual client needs.

Best Natural Gas ABC: Midwest Energy

For medium to very large natural gas users, the best ABC is hands-down Midwest Energy. Mark, Nick, and Greg have the greatest understanding of the market, supplier, and solutions to satisfy clients’ needs. Their skills come from being one of the first players in energy when natural gas first became deregulated in the early 1990’s.

A Note for Small Natural Gas Users

As a general rule, smaller clients (< 75,000 therms/yr) are typically best served by their local utility, not a third-party supplier. The only exception is if there are multiple locations needing service. If you fall into this category, I would suggest Lower Electric or Midwest Energy.

 

There are almost 300 registered ABCs to choose from in Illinois. They are served by over 30 electric suppliers and about 6 gas suppliers. To see the full list of electric suppliers in the state, click here.

(There is no license per se required to sell gas in the state, so a similar list for gas suppliers in Illinois is not available.)

When it comes down to it, choosing the right ABC is really about choosing the right energy partner. The relationship matters a lot more than you might think! Over the course of many years, you’ll have a need to engage with them several times for:

  • Strategy
  • Pricing
  • Budgets
  • Service with existing suppliers
  • Utility issues
  • Billing

Don’t be shy about asking how they get paid. Almost all are paid exclusively by their suppliers. If the ABC bills you directly for any of their services, ask them if they are also paid by the supplier. If they are, run — don’t walk — away. Good ABCs do not charge directly for their services, nor should they double-dip getting paid by the supplier and you.

I hope you’ve found this helpful and hope you find the perfect ABC for your facility.

If you’d like to learn more about what sets us apart as an energy advising company, visit our What We Do page.

 

About the Author

John has been an energy professional for 27 years. He is the CEO & Founder of Nania Energy Advisors, providing energy services to over 10,000 facilities in the Illinois and Mid-Atlantic markets. He has an MBA and is a frequest speaker at energy industry conferences.

John can be reached via email at jnania@naniaenergy.com.

The Basics of Buying Electricity

By Becky Thompson

As an energy decision maker, you likely get multiple calls a day from brokers and suppliers promising big savings on your energy bills. But before you jump into an energy supply contract, you should have a firm understanding of what you’re signing up for and your options for buying electricity.

Let’s take a step back to talk about how electricity is delivered to your facility. Then we’ll discuss which electric components you can control. Finally, we’ll talk about how factors such as risk tolerance and budget stability can help you determine which product is best for your business model.

The Path from Generation to Delivery

How generated electricity gets delivered to your facility

Supply

“Supply” is the electric energy you use to charge your phone and turn on your lights. A generator uses raw materials (such as coal) to produce the electrical current that is delivered to your facility.

Transmission

“Transmission” costs include:

  • Capacity
  • Transmission
  • Ancillaries, and
  • Losses.

These non-supply components of your bill move the electric energy from the generator to your facility via power lines. These costs are typically fixed rates regulated by the Federal Energy Regulatory Commission (FERC) and your local utility.

Delivery

“Delivery” charges, which include taxes and other distribution charges, are state regulated and passed through from your local utility.

Which Electric Components Can You Manage?

Components of Electric Cost

Energy

Electrical energy (supply) makes up about 50% of your fixable costs. In a deregulated energy market, this is where you have the most control and can have the greatest impact with the proper strategy.

Capacity and Transmission

Capacity and transmission are known as “demand charges.”

  • Capacity is the cost associated with reserving generation space on the grid.
  • Transmission is the cost of transporting the electrical energy from the generation point to the utility.

These charges are determined based on the peak load contribution (PLC) of each of your utility account numbers. Demand charges total almost 40% of your energy cost, so knowing how you can influence your PLCs can help reduce your costs.

Ancillaries and Losses

Ancillaries and losses make up the remaining 10% of your electricity charges.

  • Ancillaries are the administrative costs of supporting transmission services.
  • Losses are the costs for energy lost during transmission.

You can lower your costs for capacity, transmission, ancillaries, and losses with a proper demand-side management strategy.

Although FERC regulates these four components, the rates for these pieces vary based on the supplier you choose and how they allocate hedging risks. Fixing any or all of them as part of your supply rate affects your budget certainty.

A Note on Delivery Charges

Delivery (utility) charges are the same regardless of your energy supplier and cannot be fixed.

Which Components Should You Lock?

If you’re looking for budget certainty, a fixed “all-in” product that locks both supply and non-supply components is the way to go. A pass-through product is better if you’re working on an efficiency project or want to actively reduce your demand charges. Components not locked are passed through at monthly market rates.

Work with an Energy Advisor.

Knowing which components you can influence can help you choose the product that best matches your needs. A broker can bring you multiple prices, but it’s all in vain if it’s for the wrong product and strategy.

An energy advisor takes a holistic approach to your energy — guiding you through the energy purchasing process and giving you peace of mind that you have a strategy that’s right for your facility. Give me a call to discuss if your current energy product is right for you.

 

About the Author

Becky is a Senior Strategic Energy Advisor specializing in the public sector,  including schools and municipalities. She has been in the energy industry for over five years, working from the ground up as an account manager and then as an electric pricing team lead. Her background knowledge of the inner workings of an energy company helps identify actionable strategies for making her clients’ energy both easy and cost-effective. In her free time, Becky enjoys any activity that requires being outside and making her son belly laugh.

Becky can be reached via email at bthompson@naniaenergy.com or phone at (630) 225-4561.

California Direct Access Lottery

By Michael DeCaluwe

About 1 week ago, California regulators finalized procedures to further open California’s electric grid to consumer choice.

California originally opened its electricity market in the 1990s and was on the path to full deregulation. However, the 2001 energy crisis in the state forced them to put a hold on electric choice. Companies that were already taking supply from a 3rd-party provider were allowed to keep doing so through a program called Direct Access, but the state barred any new companies from participating.

California Senate Bill 237

California SB 237, passed in September 2018, opened an additional 4,000 gigawatt-hours (GWh) for electric choice beyond the 24,000 GWh that are already with a 3rd-party supplier. Final rules and procedures for companies to participate were passed by state regulators recently.

Why is this important?

This legislation marks the first meaningful opening of California’s electricity market in almost 20 years. California energy costs are the 7th highest in the country. Customers in California who have chosen 3rd-party supply are experiencing 10-50% savings in their energy costs, and this new legislation will allow for more companies to take advantage of these savings.

What is the Direct Access Lottery?

The 3 major California utilities will hold a lottery to decide which additional companies can participate in Direct Access. For companies that haven’t previously applied for the lottery, applications are due this week on Friday, June 14, 2019, by 5:00PM PST.

Nania Energy can help you with the application process. Here’s how:

  • Send us a recent California electricity bill from any one of the 3 major California power utilities:
    1. PG&E
    2. Southern California Edison
    3. San Diego Gas & Electricity
  • We’ll send you the necessary forms to complete to submit your lottery application.
  • Fill out the application and return it to us ASAP — we’ll handle the enrollment in the lottery on your behalf.

Final lottery selections will be made in August 2019 with service stating in January 2021.

If you have any questions on the new legislation or the lottery, please call us at (630) 225-4550 or email us at info@naniaenergy.com.

About the Author

Michael has served as the VP of Commercial & Industrial Sales at Nania Energy Advisors since 2007. He believes that listening to and understanding clients’ energy needs are vital to becoming a thought leader in the industry and forming a mutually beneficial business relationship. In his spare time, Michael enjoys being a dad, staying active, and playing basketball.

Michael can be reached via email at mdecaluwe@naniaenergy.com or via phone at (630) 225-4552.

5 Common Natural Gas Questions — Answered

By Mike Eckenroth

When you look at natural gas bids, it can be a struggle to accurately compare pricing between suppliers. There’s no standard offering for natural gas pricing.

Which can lead to a lot of questions. The 5 most common natural gas questions we’re asked are:

  1. What’s the difference between Citygate and Burner Tip?
  2. Which delivery option is better: Citygate or Burner Tip?
  3. What is swing percentage?
  4. What’s different about 100% swing?
  5. Which swing percentage is best?

Below, we’ve answered these questions in a way that will boost your natural gas knowledge and give you the confidence to make a better buying decision for your company.

What’s the Difference Between Citygate and Burner Tip?

“Citygate” is the physical location where natural gas is delivered to a local distribution company (such as Nicor or BGE) via pipelines. “Burner Tip” refers to the point at which the gas is used as fuel.

When it comes to your natural gas rate, the difference between the two lies in how a supplier charges for gas that is lost during transport.

This about it like this:

Imagine you pour exactly 1 gallon of water through a hose. When you measure the amount of water you get on the other side, it will never measure out to exactly 1 gallon. It’ll be close, but it will always be less than 1 gallon because some of the water will leak out or stick to the inside of the hose.

The same thing happens with natural gas. When gas is transported through pipelines to your facility, a small portion of it is lost during the trip due to leaks. This gas is called “lost and unaccounted for gas,” or LUAF.

A Burner Tip rate includes an additional charge to compensate for the lost gas — Citygate does not. Therefore, the supplier with the Citygate rate will charge you a fee separate from your rate to compensate for the losses.

If a supplier does not specify whether a bid is Citygate or Burner Tip, ask!

Which Delivery Point Is Better: Citygate or Burner Tip?

From a performance standpoint, one option is not better than the other. However, you need to know which delivery point a supplier is using for their bid so you can analyze the rates.

If a supplier is presenting a Citygate price, add 1-3% to the price to have an accurate comparison to a Burner Tip quote.

What Is Swing Percentage?

Swing percentage is a component of natural gas pricing that dictates how far your usage can deviate from your monthly contracted quantities without incurring incremental charges. The most common swing options are 0%, 10%, and 100%.

How does my bill differ with each option?

The price for any usage deviation depends on which swing option you choose. Prices for swing options greater than 0% include risk premiums.

Below is a table that highlights how each swing option affects the price you pay.

What Is Swing Percentage?

 

What’s Different About 100% Swing?

With a 100% swing product, suppliers charge you the same rate regardless of how much natural gas you use. If you use significantly more or less natural gas than expected, the supplier bears the burden of purchasing or selling additional quantities at the market rate.

Because of this risk, suppliers will charge you a premium for 100% swing that’s included in your rate. The premium charged is a function of the amount of variability in your month-to-month natural gas purchases.

For example: If you mostly use natural gas for heat in the winter months (like a condominium association), your premium will be higher than the premium for a customer who uses the same amount of gas every month (like a manufacturer).

A supplier’s bid for a 0% swing product could appear lower than a bid at 100% swing. That difference is at least partially due to the premium included for 100% swing.

Which Swing Percentage Is Best?

To decide the swing percentage that’s best for you, you need to know your company’s risk tolerance. If you can tolerate risk and have a very predictable usage profile, your can choose a lower swing percentage and achieve a lower overall price than someone who opts for 100% swing. However, that is not a guarantee.

Budget-conscious organizations that use natural gas for heating, such as associations and non-profit organizations, benefit from a 100% swing product. They can set their budgets beforehand and plan for the year.

Organizations with more predictable natural gas usage, like manufacturers, are typically more risk tolerant and can stand to benefit financially from taking a lower swing percentage.

Know the Ins and Outs of Supplier Bids.

Understanding Citygate, Burner Tip, and swing percentage can drastically change how you analyze supplier bids. Knowing how these components impact your rate empowers you to become a better natural gas buyer. Keep in mind that not all suppliers can provide all options.

It’s important to get an apples-to-apples comparison — you should work with an energy advisor to include any necessary adjustments that will align supplier bids and ensure an accurate comparison. An advisor can also answer your questions and help you create an energy strategy that matches your risk tolerance and meets your goals. Give me a call to discuss how you can optimize your natural gas purchase.

 

About the Author

Mike is an energy professional based out of Baltimore, Maryland, with a strong engineering and purchasing background. His specialties include energy efficiency and strategic commodity procurement. Growing up in the shadow of the Three Mile Island nuclear power plant, Mike has an intimate stake in a grid with safe, reliable, and cost-effective energy generation — which he leverages into an energy strategy that provides security for his clients.

You can reach Mike via email at meckenroth@naniaenergy.com or phone at (717) 679-3663.

The Secret to Timing Your Energy Purchase

By Sarah Rousseau

When it comes to buying energy, decision makers usually go by two rules of thumb:

  • Wait to buy until rates are at their absolute lowest, and
  • Only buy in the “off-months” (winter for power, summer for gas).

These strategies may have worked in the past, but they aren’t conducive for today’s evolved energy market.

Here’s why:

  • Current energy rates are near historic lows, and we seem to have hit a price floor. Although it’s possible for rates to dip back down, chasing that mentality can leave you unhedged and vulnerable to an upward trending market.
  • The monthly time windows no longer exist, especially as consumers switch to electric heat and natural gas continues to be used to generate electricity. In the graphs below, the lowest electric rates occurred between June and September, and the lowest gas rates were seen in January.

electric timing your energy purchase

gas timing your energy purchase

There’s no longer a “perfect” time to buy energy — so how do you know when to buy?

The secret: Always Be in a Buying Mindset.

Here’s how:

1) Know your company’s risk tolerance.

Waiting for the lowest possible rate could cause you to miss out on current savings and leave you exposed to the upside of the market. If the market turns, you’ll be forced to pay a higher rate and face buyer’s remorse or management scrutiny.

To avoid this, set price triggers for rates above and below the current market price that match your risk tolerance, then execute when one is reached. In today’s backwardated market, the trigger price could be for a 36- or 48-month term, offering your company long-term protection.

2) Understand your company’s purchasing process.

Knowing how long it takes you to get a purchasing decision approved helps you determine when to start looking at rates.

  • Can you execute a contract same day?
  • Does your board takes months to make a purchasing decision?

Being able to answer these questions allows you to facilitate your internal processes and start the buying process sooner rather than later.

3) Be proactive, not reactive.

Exploring rates less than 3 months before your contract expires doesn’t give you enough time to evaluate your energy purchasing strategy — especially if you have a long internal purchasing process.

Be aware of when your contract expires and take the early call from your advisor, even if your contract isn’t up for 12 to 24 months. They can update you on market trends and help you develop a plan that fits your needs.

Don’t Wait for the “Best” Time to Buy.

Rates are near historic lows, and seasonality  is gone. Take advantage of current opportunities in the market to protect your organization before the market turns. Call your energy advisor for a market update and discuss your buying strategy.

 

About the Author

Sarah has been in the energy industry for over 12 years. Her background is in customer care, account management, pricing, and energy solutions.

As the Director at Nania Energy Advisors, she oversees all internal core functions of the business, including marketing and client relations. Her specialty is her experience in energy pricing and understanding the evolving energy markets. She most enjoys being an advocate for clients and helping make things easier for them.

Sarah holds a Bachelors in Psychology from Illinois State University. In her spare time, she enjoys spending time with her daughter and family, practicing yoga, traveling, and watching college basketball.

Sarah can be reached at (630) 225-4553 or via email at srousseau@naniaenergy.com.

Energy and Portfolio Property Management

By Calvin Cornish

There are a lot of factors that go into managing an association’s energy:

  • Keeping track of when contracts expire
  • Obtaining bids from multiple suppliers
  • Timing your energy purchase correctly to see the most savings
  • Presenting the pricing during more than one board meeting (because they rarely decide on the first day)

Now multiply those factors by 5 or 6, and you have the energy management responsibilities of a portfolio property manager.

It can be exhausting!

Fortunately, there are solutions available that help make energy management easier for portfolio property managers. One solution is enrolling the properties they manage in an energy buying group.

What is an Energy Buying Group?

An energy buying group is a great solution for both portfolio managers and the property management company. In a buying group, all participating associations have the same energy rate, supplier, and contract end date. The buying group is managed and maintained by an energy advisor.

How can a Buying Group benefit me?

1) Lower Energy Rates

Including your properties in your company’s buying group could result in lower energy rates than what they could have obtained individually. As associations enroll in the group, the larger total usage increases the group’s wholesale purchasing power. The group can then leverage this for more competitive pricing from suppliers.

Additionally, if the group’s total usage exceeds a specific threshold, it could qualify for a reverse auction. The reverse auction process is transparent and naturally competitive, offering the group greater savings.

2) One Point of Contact

A buying group gives you one person to contact for any questions about your properties’ energy: the organizing energy advisor. Your energy advisor keeps track of the contracts for all the buying group participants and can get billing and customer service issues resolved quickly.

Consider Enrolling Your Portfolio

Keeping up with the energy contracts and decisions for multiple properties can be time-consuming and daunting. An Energy Buying Group can lower energy rates for all your properties and take the energy-decision pressure off you. Contact your energy advisor to learn more about buying groups and see if they make sense for your property management company.

 

About the Author

Calvin has served as a Senior Energy Advisor at Nania Energy Advisors since 2010. As the Director of Community Living and Real Strategic Energy Advisors Calvin CornishEstate Services, he specializes in preparing property management boards to make informed decisions on energy through proper industry education. His clients include apartment complexes, condominium associations, and senior living facilities. In his free time, Calvin enjoys music and coaching youth sports.

Calvin can be reached via email at ccornish@naniaenergy.com or phone at (630) 225-4554.

 

3 Benefits of Energy Deregulation

By Mike Eckenroth

2019 marks the 30th anniversary of energy deregulation in the United States. Natural gas suppliers were able to sell natural gas directly to consumers with the Natural Gas Wellhead Decontrol Act of 1989, and power producers could do the same with the Energy Policy Act of 1992.

Since the inception of energy deregulation, 34 states have at least one of the commodities deregulated, and thousands of customers are using the market to their advantage.

What is Deregulation?

When a state’s energy market becomes “deregulated,” its government passes new energy laws allowing end users to choose who supplies their natural gas or electricity to their local utility and what rate they would like to pay.

In a regulated energy market, consumers are required to purchase energy from the utility.

How Does Deregulation Benefit Consumers?

Customers in a deregulated energy market experience these 3 benefits:

1) Choices

In a regulated energy market, consumers can’t choose their energy supplier — they must use the utility. This makes it difficult for those customers to have influence over their energy strategies.

A deregulated market allows you to decide if you want to use a third-party energy supplier. Having a supplier gives you the power to customize your energy purchasing to meet your goals. You can experiment with different suppliers, contract terms, rates, product types, and renewable energy options to find what combination works best for your business.

You can also choose to work with an advisor that can help you decide what strategy fits your energy needs.

2) Budget Certainty

Your energy bill includes two classes of costs:

  • Supply Cost: the cost of the commodity (electricity, natural gas)
  • Utility Costs or Delivery Costs: the costs to deliver the energy from the supply source to your business (such as capacity and transmission)

The utility’s energy supply rate varies monthly, so your supply costs are different every month. This can make it difficult to have an accurate budget in a regulated energy market.

Budget certainty is more attainable in a deregulated energy market. With a stable supply rate, you can calculate your supply costs based on your estimated usage for each month. Your Utility Costs will still vary with your usage, but it will be easier overall to budget your energy costs.

3) Risk Management

Customers in regulated energy markets are at risk for rate spikes during high demand periods — winter months for gas and summer months for electricity.

In a deregulated market, you can use deregulation to your competitive advantage — especially if you’re striving for low operating costs. Locking in a fixed rate when the market is low protects you from rate spikes, saving you money that you can allocate to new projects, product lines, or other company enhancements.

 

Although deregulation provides some great benefits, there is always the possibility for a state to repeal it. Some states, such as Arkansas, have passed deregulation laws only to overturn them a short time later. And about 10 years ago, the Maryland General Assembly made an attempt to get rid of deregulation. However, lobbying by the Restaurant Association of Maryland as well as other commercial groups made sure it stayed.

As a commercial and industrial customer, it’s important that you take advantage of and support deregulation to protect your right to choose your energy provider.

Put Deregulation To Good Use.

Work with an energy advisor to mine the value of deregulation.

As a veteran in the Mid-Atlantic energy industry, I’ve helped customers identify their energy options and explore solutions that match their goals. Many of my customers are budget-conscious and focused on the bottom line, so risk management is something I help my clients integrate into their energy purchasing strategies. I’d love to see what I can do to make you successful, too.

Give me a call to discuss your energy game plan and learn how to maximize the benefits of deregulation.

 

About the Author

Mike is an energy professional based out of Baltimore, Maryland, with a strong engineering and purchasing background. His specialties include energy efficiency and strategic commodity procurement. Growing up in the shadow of Three Mile Island nuclear power plant, Mike has an intimate stake in a grid with safe, reliable, and cost-effective energy generation — which he leverages into an energy strategy that provides security for his clients.

You can reach Mike via email at meckenroth@naniaenergy.com or phone at (443) 833-8224.