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Green Energy 101: How to Go Green in 2020

By Michael Zaura

January 13, 2020 — The end of a decade and the start of the next is the perfect time to reflect on the past and plan for the future.

Green (renewable) energy has already made a significant impact on the energy industry, and it’s going to play a huge part going forward. The U.S. Energy Information Administration (EIA) predicts that renewable sources will generate almost half of the world’s electricity by 2050.

Green Energy 101

Source: U.S. Energy Information Administration, International Energy Outlook 2019

Have you been thinking about green energy for your facility? In this post, we’ll:

  • cover the basics of green energy,
  • answer some FAQs, and
  • explore a couple ways you can incorporate renewables into your energy strategy.

What are sources of renewable energy?

Renewable energy is energy that is not generated from fossil fuels (coal, oil, and natural gas). Sources include:

  • Sun (solar energy)
  • Wind
  • Underground heat (geothermal energy)
  • Water (hydroelectric power)
  • Biomass
  • Hydrogen and fuel cells

These sources are naturally replenished over time, which is why they’re considered renewable.

Is nuclear energy green?

Yes…and no.

Nuclear energy produces far fewer greenhouse gas emissions during electricity generation compared to coal or natural gas. It’s also more reliable in generation from an efficiency standpoint. Some suppliers even market nuclear as a “carbon-free” product. In those regards, it could be considered “green.”

However, nuclear energy contains uranium, which is not a naturally-occurring resource. Also, the radioactive waste created from the generation process is definitely not environmentally friendly.

Fore more on nuclear, check out these articles:

How to Buy Green Energy

When you’re looking to “go green,” you have two primary courses of action:

  1. Purchasing RECs
  2. Owning a renewable asset

What is a REC?

A Renewable Energy Credit (REC, or SREC for solar) is proof that 1 megawatt-hour of electricity has been generated by a renewable resource. Buying RECs ensures that renewable electricity is being generated on your behalf and delivered to the power grid.

Many clients choose this route as a more affordable alternative to owning the asset outright.

Owning a Renewable Asset

Examples of renewable assets include:

  • A solar array on a rooftop or plot of land
  • A wind turbine
  • A geothermal system in the floor of a building

Investing in a green asset for your facility requires the right amount of space, capital, and the right situation.

If you’re interested in owning a renewable asset, a Power Purchase Agreement (PPA) is one of your financing options. A PPA is a contract between a developer and an electricity consumer. These agreements typically last between 10 and 25 years.

“How do I know that the energy I’m getting to my facility is really green?”

I get this question from clients all the time. And the short answer is: unless you own the asset tied to your facility, you won’t know.

The grid contains both green energy and “brown” (non-renewable) energy. If you purchase RECs, you do ensure that green energy gets to the grid. But you won’t know for sure what part of the mix coming from the grid to your facility is truly green.

Is there green gas?

While most green energy talk revolves around power generation, green or renewable natural gas (RNG) does exist.

Green gas comes from biodegradable materials (think of a landfill) that emits a usable biogas. This biogas is purified and turned into biomethane. Biomethane can then be injected into gas pipelines for end user consumption.

One reason RNG isn’t as prevalent as renewable electricity is because most of the U.S. currently lacks the infrastructure to clean and transport the gas. Once more pipelines and refineries are developed, we will see an increased use of RNG.

Green energy can be in your future.

Is going green part of your plan in the next 30 years?

If renewable sources are going to fuel half of our electricity, more facilities will need to invest in renewable assets. Some countries, corporations, and individuals have already set sustainability goals. As new technologies surrounding green energy continue to evolve, these goals will be easier to achieve.

Cheers to a greener future!

TMT: Choosing an Energy Contract Term Length

Video Transcript

Clients are always asking me: “How long should I lock in a rate?” Is it better to lock shorter term or longer term?

In this week’s Two-Minute Tuesday, we’ll be discussing factors to take into consideration when choosing a term for your energy contract.

Common Energy Contract Term Lengths

When it comes to terms for your energy agreement, 12, 24, and 36 months are the most common options.

But they definitely aren’t the only options.

Most suppliers will readily go out 48-60 months on a fixed contract, and the top suppliers — with special approval — will go out for as far as 7-10 years for clients with really good credit.

Factors in Choosing an Energy Contract Term Length

So with all those options in mind, the major factors to take into consideration are:

  • Market Conditions
  • Internal Policies
  • Market Timing

1) Market Conditions

When we say “market conditions,” we aren’t just talking about pricing today. Market volatility and macroeconomics also play key roles over the long term.

When market prices are high, you don’t want to guarantee that you have a very high rate for a long time. That’s a good time to look shorter term.

When prices are relatively low — and notably lower than what you’ve been paying in the past — those are times that you’d want to look out longer term.

What constitutes longer term and shorter term for you may vary based on your organization’s internal policies, which is the next factor to look at.

2) Internal Policies

Some examples of how internal policies can affect the decision of how far out to lock are:

  • Specific term limits, i.e. you can’t enter into an agreement beyond a 36-month term.
  • How far out you can commit
  • Individual authorization limitations, where it wouldn’t be practical to go ahead and get additional authorization from a higher-up in the organization beyond a certain term length.

3) Market Timing

It’s important to allow ample time to monitor the market. Clients who see the best results over the longer term generally stay 9-12 months ahead of their contract termination date when making these decisions.

What does that mean for the length of the agreement? Well, any contract that expires within 12 months really doesn’t allow much time for you to go out and monitor the market and get the best results.

 

In short, when deciding how long you should lock in, take all of these factors into consideration to make the best choice for your organization. Thanks for watching this episode of Two-Minute Tuesday. If you found this helpful, please share or comment below!

 

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PJM Capacity Market Ruling

By Michael DeCaluwe

On Thursday, Dec. 19, 2019, the Federal Energy Regulatory Commission (FERC) voted 2-1 to extend PJM’s Minimum Offer Price Rule (MOPR) to any generation assets that receive state subsidies. As a result, energy consumers in PJM’s territory could see a significant rise in their electric rates.

That’s a lot of energy industry jargon, but we’re going to simplify it here and explain how this new rule could impact you.

What is Capacity?

Capacity is a charge levied by a grid operator, such as PJM. It is money collected from electricity consumers by the grid and paid to power generators to ensure that there’s enough power to meet energy needs during peak demand times.

This charge used to be a small portion of your energy costs, but over the past few years it’s grown to be 25-30% of your energy bill due to coal generators shutting down.  There’s less supply to meet demand.

PJM operates their capacity charges in a 3-year forward market. They hold an auction in which generators bid against each other to set capacity rates 3 years in advance. For example, capacity rates for 2022 were to be set in this year’s auction (2019).

Current State of PJM Capacity Market

Some generators have voiced their concern that state subsidies for some types of generation (such as renewable energy programs, state nuclear bailouts, etc.) place them at an unfair advantage when they need to compete in the capacity auction against these subsidized generators.

FERC — the regulatory body that oversees PJM and other grid operators — agreed to review PJM’s auction rules and delay the 2019 auction while these rules were reviewed.

What did they decide?

In their vote yesterday, FERC essentially banned any subsidized generator from participating in PJM’s capacity auction. This was a victory for un-subsidized generators (coal and natural gas-powered generators), but it was a severe blow to nuclear and renewable generators in PJM’s territory.

PJM Capacity Market

Source: trane.com

Estimates on increased electricity (capacity) costs to consumers range from $1.6 billion – $5.7 billion in the 11 states that PJM serves.

 

Why will capacity costs increase?

All 11 states in PJM’s territory operate some type of subsidization of energy, whether through nuclear bailouts (Illinois or New Jersey) or through state renewable standards (almost all states). If subsidized generators are barred from participating in the capacity market, future capacity markets will be determined by relative few players.

Less Supply + Same Demand = Higher Rates!

Also, without the ability to capitalize on capacity revenue, renewable energy assets become much less economical to build. This stunts the growth of renewable energy in the PJM market.

What’s Next?

There will undoubtedly be court action against this vote. Additionally, some states are pushing for a “carve-out,” in which they would operate their own capacity market independent from PJM.

In short, this FERC ruling has sent the industry into a pandemonium and has created real concern over the future of renewable energy assets in PJM.

What’s there to do as a customer? Nothing at this time until we have a clearer vision of what the final outcome will be. Just be aware that there could be major changes coming to electricity pricing in the next few years.

We’ll keep you updated as we learn more. Please feel free to contact us with any questions.

FAQ: What is Utility Consolidated Billing?

By Matt Souvannasing

December 12, 2019

Does your utility bill have a supplier name listed next to the energy charge?

Supplier on Utility Bill

Supplier on Utility Bill

If so, you likely fall into one of 3 scenarios:

  • You knowingly signed a contract with a third-party supplier and chose Utility Consolidated Billing (UCB) as your billing format (or it’s the supplier’s default format).
  • Your contract term expired, and you did not sign another contract. Based on the renewal language in your initial contract, you are still being serviced by the supplier on a month-to-month basis with the UCB billing format.
  • You may be part of a municipal aggregation program, in which your city or county has negotiated a rate with the supplier for your business (automatically set up on UCB).
    • This situation is not as likely. Depending on the rules of your local aggregation program, you might not be contractually obligated to the program and can secure your own supply option.

What is UCB?

Utility Consolidated Billing (UCB) is a billing format in which all energy charges — supply, market, delivery/utility, and taxes — are included on one bill from your local utility.

The supply charge is one of the line items listed on your invoice. When you pay your bill, the utility remits payment to the supplier for the supply (energy) portion of your bill.

UCB is common in states that don’t offer single supplier billing.

I didn’t sign a contract, and I’m not in an aggregation. What’s going on?

It’s possible that you’ve been slammed. Slamming is when someone else signed or authorized the execution of a supply agreement on your behalf without your knowledge or approval.

Slamming is more common in the residential or small commercial space. But it’s a good idea to review your bill regularly to confirm your current supply partner and contracted rate are correctly stated on your utility bill.

Who should I contact with questions?

If you’re not sure why a supplier is listed on your utility bill, one of the quickest ways to get answers is to reach out to that supplier and ask for a copy of your current contract.

If you have further questions, feel free to contact us.

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About the Author

Matt is an Energy Advisor specializing in retail and energy aggregation programs. He is passionate about helping first-time energy buyers understand the deregulated market and find the best solutions for their business. In his free time, Matt enjoys cooking and photography.

Matt can be reached at (630) 225-4557 or msouvannasing@naniaenergy.com.

Two-Minute Tuesday: Reverse Auction for Energy

December 10, 2019

Video Transcript

love buying things on eBay. It’s that thrill of the auction as those last seconds tick down and getting the product that I really wanted at a great price.

What if I told you that you can buy your gas and electricity commodity in an auction format as well? But instead of the price going higher like it does on eBay, the price goes down. It’s what we call a reverse auction. 

In this week’s Two-Minute Tuesday, we’re going to talk about what a reverse auction is for energy buying, if you’re a good fit, and what the benefits could be to your business as a result.

What is a reverse auction?

So what is a reverse auction? Just like we talked about, it’s like eBay in reverse. Instead of the price going higher for your electric or natural gas price, the price is actually going down as more bidders compete.

Take your current supplier or third party, like a Constellation or a Direct Energy. They all compete in an open platform online live for 20-30 minutes submitting multiple bids to win your business.

What are the benefits of a reverse auction?

The benefits to you are transparency in the process and a lower overall energy rate.

Am I a good fit for a reverse auction?

To find out if you’re a good fit for this, you may consider:

  • Do you need complete transparency in your purchasing or procurement process?
  • Are you a public entity where you want to see everything on a fair, open platform?
  • Or, are you a large business where energy is a large spend for you and you need the absolute lowest rate possible in the marketplace?

If so, this may be a route you want to consider.

So how about a real-life example?

We just ran a reverse auction for electricity for a large local school district a few months ago. Their overall rate at the end of the auction resulted in savings of $600,000 for their school district.

Think about how that kind of money and savings could help your operating budget. Then, reach out to your current broker or consultant and see if this is something that they offer. See what it could look like for your business and the savings you could attain as a result.

Thanks for watching our video! Leave your comments below, and check out this article on how you could benefit from a reverse auction.

Pros & Cons of a Partial Fixed Product

By Calvin Cornish, CEM

November 25, 2019 – If you’ve seen our recent Risk Management video, you know that a Fixed All-In product isn’t your only purchasing option for your electricity.

The chart below shows you the 5 components that make up your electricity supply charges.

Components of Electric Cost

Anytime you lock less than all these components, you have chosen a Partial Fixed (also called Pass-Through) product. Any component not included in your fixed rate is “passed through” to you at its actual cost each month.

Clients typically pass through capacity and transmission (yellow and light blue above) because they’re the next largest costs behind energy and are not directly related to your monthly usage.

Why would you choose a Pass-Through Product?

The pros and cons of a partial fixed product mostly center around risk and its effect on price.

Pass-Through Product: PROS

  1. Reduced risk. Including capacity and transmission as part of your fixed rate converts those flat demand charges ($/day) into usage-based charges ($/kWh). As a result, you could end up paying higher costs for your demand charges.
  2. Avoid risk premiums. If you fix your cap and trans components, suppliers include a risk premium as part of your rate to protect themselves from underpayment. These risk premiums increase your monthly cost.
  3. Take advantage of improved efficiency. If you undergo an efficiency project that improves your load profile, you could lower your capacity and transmission charges. You won’t see that decrease if you’ve fixed them as part of your rate.

Pass-Through Product: CONS

  1. Uncertainty around PLC tags. A large factor in your demand charges is your facility’s usage during the grid’s peak usage periods. There is always a risk that a couple of bad days can result in higher numbers.
  2. Demand charges could increase. By not including capacity and transmission in your rate, you run the risk of these costs actually increasing if your efficiency declines. The type of facility matters — residential and commercial buildings are less likely to see decreased efficiency than industrial manufacturers.
  3. Billing complexity. Passing through components adds line items to your bill. A single cost per kWh will always be a cleaner billing option.

Who’s a good fit for a pass-through product?

If you identify with any of the qualifiers below, you could benefit from a pass-through product:

  • Clients looking for budget accuracy and have a low risk tolerance
  • Anyone with plans to improve efficiency in the next 1-2 years
  • Clients with annual usage that varies notably and has a higher chance of decreasing than increasing
  • Anyone involved in a buying group
    • You want to limit the socialization of demand charges. Otherwise, you could end up paying for the costs of less-efficient buildings.

What should you expect when passing through components?

  • The costs for any passed-through components will vary throughout the term of your contract.
  • On you electric bill, you’ll see the published tariffed rates for your pass-through pieces.
  • You won’t have any hedging premiums on your passed-through components.

Is a partial fixed product right for you?

The list of qualifiers above is by no means exhaustive. The real answer is unique to you based on your risk level, usage profile, and the nature of your business.

If you’d like to learn more, take our Risk Tolerance Survey or contact us to be paired with an energy advisor.

 

Learn about other electricity products:

About the Author

Calvin is a Certified Energy Manager and has served as a Senior Strategic Energy Advisor at Nania Energy since 2010. He specializes in preparing property management boards to make informed decisions on energy efficiency 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 at (630) 225-4554 or ccornish@naniaenergy.com.

 

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What is a Fixed All-In Product?

Video Transcript

Hi! I’m Mike, and I’m a Senior Energy Advisor here at Nania Energy. Whether you’re new to energy buying or you’ve been buying for quite a while, you’ve probably heard of a “Fully Fixed” or “Fixed All-In” product.

In today’s video, we’re going to do a deep dive into what a fixed product is, the pros and cons of choosing a fixed product, and why it’s such a common choice among energy buyers.

What is a Fixed All-In Product?

Your energy supply charges are made up of five pieces of the pie shown here.

  • Energy by far is the biggest. These charges are at least 50% of the pie. Energy Components Chart
  • Next is Capacity. Capacity relates directly to when you use energy and how you use energy during peak times over the course of a year.
  • Next is Transmission. Transmission are the charges of the energy going across the wires from the grid to the place where the power is being used.
  • Up next is Losses. Losses is a small portion of your bill, but that’s related to the loss of energy over the wires that the utility gets to recoup charges for.
  • Lastly is Ancillaries. Ancillaries make up a small portion, just like losses. Those are miscellaneous charges — anywhere between 30 and 50 different charges — that are put into a catch-all bucket.

So, with a Fully-Fixed product, we’re locking all 5 pieces* of the pie into one rate.

*Note: Depending on the market, all or some of these components may apply. For example, in Texas capacity/reliability costs are included in the energy component rather than separately charged for.

Pros & Cons of a Fixed All-In Product

Now that you understand the components of the energy pieces that go into the pie, we’re going to talk about the pros and the cons of a Fully-Fixed Product.

Pros

  1. You have the same rate regardless of usage. Your rate won’t change based on seasonality or any major variations in your monthly usage.
  2. It makes budgeting easy and predictable. You estimate your annual usage, you times it by the rate, and you get your budget for the year. There’s no worrying about variable month-to-month charges when estimating what your budget might be.
  3. You can take advantage of the market. As we’ve seen historic lows over these last couple of years, locking in a longer term — say, 24, 36, 48, or even longer — can yield tremendous savings and protection over the long term.

Cons

  1. You have little to no flexibility. Say your facility gets more efficient and your capacity numbers improve. You’re locked in at an artificially higher rate than you would be if you were able to take advantage of those efficiency improvements in the facility.
  2. There are built-in premiums. While you have budget certainty by locking all the pieces of the energy pie, there are premiums built into each of those pieces that suppliers use to hedge their risks. So while you have premiums attached to each of those, you’re paying a little bit of a higher rate than you would with another product.
  3. Is now the right time to lock? While this could be viewed as a pro — similar to market timing — I get asked a lot “What if I lock and then the market goes down?” I usually ask in response “Would it bother you more if the price went down another 1-2 percent or if it went up 5-10 percent?” It’s about market timing and what you’re most comfortable with at that time.

Why is Fixed All-In a popular product choice?

So why is Fixed All-In such a common choice for new energy buyers?

  • It’s easy to understand. You have one fixed rate on your bill and you’re good to go.
  • There’s no guesswork. When it comes to your budget, you have the ultimate budget certainty.
  • You have an apples-to-apples comparison when you’re shopping with other suppliers.

Should you choose a Fixed All-In product?

Is a Fixed All-In product the best choice for you? Or is there another product that might fit better with your strategy and your facility?

Contact an advisor and we can have a conversation about your electricity purchasing options.

Thank you for watching!

Learn About Other Electricity Product Options:

Index Product

Pass-Through Product

Ask An Advisor: What Is Your Risk Tolerance?

 

Video Transcription

Hi! I’m Mike, and I’m a Senior Energy Advisor here at Nania Energy Advisors. One question we get asked all the time is: “How do I go about choosing the right energy product?”

In today’s video, we’re going to discuss one of the first factors to consider when choosing an energy product. And that is: Risk Tolerance.

4 Levels of Risk

When it comes to choosing an energy product, it’s not “one size fits all.” Fixed all-in isn’t always the best choice for everyone.

Each product type comes with its own level of risk. On our website, you can take a survey which will determine your organization’s energy risk tolerance. Based on those results, you’ll be classified into one of four risk tolerance levels:

  • Low
  • Mild
  • Moderate, or
  • High.

Low

So let’s talk about each level. The first is Low. If your organization has a low risk tolerance, we recommend a fixed all-in product. And here’s why:

  1. You probably have to adhere to a pretty strict budget. You want to have a pretty good idea of what your monthly energy spend is.
  2.  Having the same fixed rate makes budgeting and accounting easy from month to month, with little or no involvement from you.
  3. You can set it and go. You choose a rate, and you can rest easy knowing that there won’t be a big change in your rate despite a change in usage.

So, if you have a low risk tolerance level, look for a fixed all-in product.

Mild

The next level is Mild. For customers with a mild risk tolerance level, we recommend a managed product.

If you have a mild tolerance for risk:

  1. You can afford to go 10% over budget without major consequences.
  2. If you enroll in a managed product through a supplier, they’ll lock different portions of your usage every month until 100% of that volume is locked. They use market opportunities and logic in order to determine how much to lock and when.
  3. It’s another set it and go option. You don’t need to be involved in the process.

So, if you have a mild tolerance level for risk, consider a managed product.

Moderate

The third level is Moderate. If you have a moderate risk tolerance level, then a layered product might be a good fit for you.

Moderate risk tolerance means:

  1. You’re not a budget-driven organization.
  2. A layered product is different from a managed product by involvement level. With a managed product, the supplier makes all the purchasing decisions for you. With a layered product, you need to be actively involved in the buying process so you can decide when to lock.
  3. And, you need to actively monitor the market to decide when the best opportunities are.

So, if you have a moderate risk tolerance and the time to devote to the energy buying process, look into a layered energy product.

High

Our last risk tolerance level is High. An index product is a good option for you if you have a high risk tolerance level.

You most likely:

  1. Have little to no budget
  2. And you’re comfortable with market fluctuations. You can survive the extreme upticks of the market.
  3. Although an index product does not require you to lock, you should remain alert and be ready to act should an opportunity present itself in the market.

So, if you have a high risk tolerance, an index product might be a good fit for you.

Other Factors to Consider

Risk tolerance isn’t the only factor you need to consider when choosing an energy product. Other factors to consider are:

  • How much is your annual spend on energy?
  • Do you have any energy efficiency projects planned?
  • And how much time do you want to devote to monitoring the market?

Use this video and our survey as a guide, but please consult with an advisor or broker for a more detail conversation on choosing an energy product. Keep an eye out for a future video when we dive deeper into the 4 types of energy products.

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Pros & Cons of an Index Product

By Michael DeCaluwe

Occasionally I will get asked about what is a better energy solution — fixing energy or selecting an index product.

Answering that question involves both understanding what an index product is and knowing your specific energy needs and risk tolerance.

What is an index product?

On an index product, your energy rate fluctuates with the market and varies month to month. Your monthly electric rate is based on an hourly rate published your regional electric grid operator.

The utility’s meter takes hourly reads of the amount of power consumed,  and the hourly quantities are charged at the grid operator’s hourly rate. This is your indexed power rate.

Index power rates are typically low at night and during the spring and fall. Rates are higher during “peak” usage hours (8AM-5PM) and during summer and winter when energy demand is at its highest (for heating and cooling needs). Your electric invoice is the total of all these hourly costs for the month.

Are you a good fit for an index product?

An index product is a good choice if you can tolerate volatility or if energy makes up a small portion of your operating costs. Over time, index energy costs have historically been lower than fixed costs because there are no supplier risk premiums built in.

You could also benefit from an index product if you can shift your load to off-peak times. You could take advantage of the lower off-peak hourly rates.

Lastly, if you have a pending energy efficiency project or load management upgrade, consider choosing an index product until the project is completed. Then, you can lock the lower rate that could result from the project.

What’s the difference between being on an index product with a supplier and being with the utility?

If you’re not under contract with a third-party supplier, then you are receiving your electricity directly from the utility. Some utilities offer an hourly index supply rate.

However, there are several differences between the utility’s index product and a supplier’s:

  • A supplier’s index rate (Day-Ahead) can be less volatile than the utility’s (Real-Time) based on the types of indices they use. In some hours, this difference can be as high as 20%.
  • The utility could be socializing non-energy costs, which would increase your index rate.
  • The utility must accept all customers into its programs, while a supplier has credit thresholds.
    • In some markets, customers on utility supply may end up paying for receivables from uncollected supply costs.
  • If a company ever wanted to fix a portion of their future load, the process would be easier if they were already on an index product with a supplier.

If none of these issues are a concern, then the utility could be a good option for you.

Is there more or less risk with an index product?

Although an index product for power has historically been less expensive than a fixed product, it is not risk-free.

For example, during the polar vortex in January and February of 2014, utility index rates were as high as 4-5 times the average price of energy for these months.

Can you take the risk of having your energy costs be 30-40% over budget? Most energy buyers say they can’t take that risk, which is why they typically select a fixed product.

Also, an index product doesn’t give you the ability to budget for energy expenses. For budget-conscious organizations, an index product is not a good choice.

Index at your own risk.

Index energy solutions can be a good fit for some energy consumers. However, you need to know both the benefits and the risks that come with them. The decision to select an index product should be part of a long-term strategy rather than a short-term gamble to save on energy costs.

Please comment below with your questions and thoughts, and feel free to contact me directly if you’d like to hear more.

 

About the Author

Michael is the Senior VP of Commercial & Industrial Sales at Nania Energy Advisors, where he as worked since 2007.       He believes that listening to and understanding clients’ energy needs is 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. Click here to follow him on LinkedIn.

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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.