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Archive for the ‘Energy Industry’ Category

Looking back on 2015, there have been a lot of things going on with Servant Energy 2016respect to the energy business and how it affects different industry sectors, as well certain areas like my home state of Texas! Natural gas prices lumbered at historical lows and with oil prices still on a downward spiral since June 2014, into the $36.00 range, some analysts predict that prices could fall below $30.00. Consumers have been able to benefit from the price drop at the pump, while some oil companies have started to feel the heat from declining oil prices.

In Texas, construction is finishing the year off strong, especially in the DFW area, where we continue to see a significant rise in construction and job creation. Houston, although not able to keep up the pace it had for the last few years, still has cranes in the air and new developments are coming online. Driving around the DFW area, cranes have been popping up all over town due to the construction of corporate relocations, office buildings, multifamily buildings, mixed use, and manufacturing additions. This has been a great sign for DFW! The construction companies and developers are enjoying some good times that can hopefully last another two to three years.

While these construction companies and large building owners continue to build, their power needs become great and more complex. Getting power for projects is not just a cost of doing business; it really is a way to more effectively managing the project by planning ahead of time. My firm, Servant Energy Partners, truly believes that by involving power needs at the beginning of the construction process a company can save large amounts of time and costs, plus add savings to the bottom line. Our firm takes the approach that every project is unique. Finding out time frames, challenges, and the load can help a company put a road map plan in place, ensuring that power is ready and available when needed for the project. Additionally, ensuring that there is a long term process in place to handle the power needs for the duration of the project, all the way through transition to the ownership group.

Servant Energy Partners, which includes a team of skilled former utility personnel, helps our construction, developer, and building owner’s partners through the process, so they will have peace of mind when they start a project and ensure that they will be prepared to handle any challenges and obstacles that may arise. All while saving money on the power they use. We have been fortunate to be a part of some of the largest projects in the DFW area in 2015, including State Farm (Austin Commercial), Raytheon Headquarters (A & P), Parkland Hospital (BARA), and Liberty Mutual (Balfour Beatty). What a blessing and a pleasure it has been to be involved in these projects.

Our goal, at Servant Energy Partners, has always been to serve our clients and help them save on the energy. As our 2015 journey is coming to an end, we want to thank all of our partners who have help make our 5th year in business a year of exciting growth and rewards, both personally and professionally. We hope that you will allow us to help you on your journey, as your energy partner in the coming years. “Power Up for 2016” and Beyond!

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Homeowners could save money and help the state’s power grid maintain its integrity during the hottest summer days under a new pilot program offered by the Electric Reliability Council of Texas.
The ERCOT board approved the program last week as a way to reduce electricity demand in the late afternoons during the summer months. The grid operator has warned that electricity could be in tight supply and there’s a significant chance that alerts could be issued.
To participate, residential customers should contact their retail electric provider or Oncor.
Homeowners will be pooled with other customers with the goal of cutting 100 kilowatts of electricity usage during a targeted 30-minute period.
Robbie Searcy, communications manager for ERCOT, explained it would take about 65 to 70 homes raising the thermostat and halting the use of appliances to make up the necessary 100 kilowatts.
Homes make up about 51 percent of ERCOT’s power consumption during peak periods.
“This really opens it up to a different type of consumer,” Searcy said. “We hope to see increased participation in residential consumers.”
Paul Wattles, senior analyst for ERCOT, said in most cases homes need special equipment on the thermostat or air conditioner so they can be controlled remotely. When it’s needed, the electricity demand can be reduced by the entity the homeowner signed up with. Then, the customer is compensated for reducing the load during the peak time.
“Whatever you give us, whenever we call you, we’re going to pay you for that,” Wattles said.
The pilot program is separate from the commercial incentive program where ERCOT pays big industrial users to cut back when the gap between load and demand shrinks. The businesses get paid for reducing their electricity usage during that period. The new pilot program runs from June to September and is weather and load related so it goes into effect when it’s most needed.
To explain the program, she used the following example:
It’s a hot summer morning with high temperatures expected to reach 105 to 115 degrees in the ERCOT service area.
Generators are working at full capacity but ERCOT keeps an eye on the margin between generation and load.
If the gap reaches 2,300 megawatts, an Energy Emergency Alert goes out, asking consumers to voluntarily cut back usage from 3 p.m. to 7 p.m.
Consumers who are participating in the pilot program will be asked to cut back usage mostly by raising the thermostat and not using big appliances.
ERCOT will distribute money to the company that aggregated the consumers in the pilot program, in some cases a retail electric provider.
The company will return those savings to consumers based on how much power they saved.
ERCOT expects to pay out between $34,000 to $86,000.
The staff report for the pilot program shows the potential the program has for the state this summer and in the future.
“If the pilot demonstrates that participating loads can provide meaningful demand response during peak summer conditions at a reasonable price, the potential long-term reliability benefits could be substantial, given the best demand response potential associated with residential loads at summer peak.”

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ERCOT is forecasting healthier generation reserves for 2014 and beyond, which has been a major concern facing Texas for the past couple years. Anyone reading this blog knows that Texas has been slipping closer and closer to the accepted Reserve Margin, or the minimum amount of accepted generation ahead of the estimated electricity needs of the entire state for some years now. In fact, the vote to raise the Market Cap from 3,000 to 9,000 over the next few years is a direct response to the dwindling reserve margins. The hope was that by increasing the market cap during peak demand times, the state would be able to lure new investments in energy generation to Texas. Texas, because of massive population growth and industrial growth, has been ticking closer to the point where generation assets become dangerously low and unfortunately no new private industries have invested in new plants because they aren’t sure they’ll see the profit they’d like from new natural-gas fired plants.

The article from ERCOT, while it sounds rosy, is a bit misleading. Texas is still getting dangerously close to their Reserve Margin, however forecasts beyond 2013 aren’t AS LOW as they were back in May. So things are just slightly improved in what is still a fairly grim landscape. Nonetheless, any new is good news for the Texas electricity market at this point. Additionally, the report apparently didn’t include some new generation projects that are set to go online in 2015, which might add as much as 2,000 megawatts to the grid, so thing might be slightly rosier still. But that doesn’t mean Texas doesn’t still need new investment in generation in a VERY bad way.

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From time to time, information comes to light that’s very important to all our Servant Partners and friends.

Below is a link that explains what the Texas Public Utility Commission just voted on, that takes effect 8-1-12.

Frankly, many don’t and most don’t seem to care, as we’re all busy. But this will 100% have effect on anyone paying an electric bill, from now on.

http://www.mysanantonio.com/business/article/Texas-PUC-votes-to-raise-cap-50-3671505.php

If the link doesn’t work, just use your browses and enter in “Texas PUC raises rate cap to $4500” and it will pop up.

In simple terms, the wholesale rate during peak times, typically 7-25 to 8-28 each summer, the PUC will allow wholesale suppliers to charge $4500 per megawatt hour, for those hours. For those of us who like “cents” better, that’s 45 CENTS per kilowatt hour.

This is being done to help save the power grid, increase reserves, encourage curtailment of usage during high demand periods, attract investors to build new plants, etc.

We have already heard from the REPs (Retail Electric Providers) that they ARE building this into their future pricing models after 8-1-12. That’s 3.5 weeks from today.

They are telling us “You will spend hundreds if not thousands MORE on the same electricity in 3.5 weeks unless you do something about it” They have warned us. As consultants, we’re bound to share this information with all those we know. It’s been in the news as well. Again, most missed it or don’t really understand it.

Bottom line, all rates of “today” say a nickel, will soon be a “nickel PLUS”. That can be 6, 5.5 or 7. Who knows? It will vary by locale, size, provider, product and term.

So, when we turn on that light switch, just a day after 8-1-12, will all see a difference on the next round of pricing, so we might as well minimize it before then and avoid it for as long as we can.

So, if you have a contract that expires in 2012 OR 2013, it’s not too late to get a price for “next time” and lock it down.
This is the only way to lock rates and avoid this increase for up to 2-3-4 years, as long as you want to avoid it.

With 1300 people to notify, it would take me 26 days at 50 dials per day to get this message out, hence the email.

If you have any questions or comments or want a price or to talk about it, now would be a good time to do so.

For those of you, who have done this either with us or someone else, please know that the right thing was done and this message is only intended for those who have not yet acted.

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