Posts Tagged ‘Electricity’

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.


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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Texas grid operator to pay for four mothballed plants to return to service
The Texas grid operator signed contracts with two power generation companies to put four mothballed units back into service for the rest of the summer to keep the lights on.

The Electric Reliability Council of Texas said Tuesday in a news release that it will pay NRG Energy Inc. and Garland Power & Light the cost of turning on the natural gas-fired generators to keep them on standby. High temperatures have boosted demand for electricity across the state, and the drought could soon put power plants out of commission for lack of cooling water.

“This has been a highly unusual year for ERCOT, with record-breaking temperatures starting as early as May plus an increasing demand for electricity as the state’s economy and population growth fuel greater energy use,” ERCOT chief executive Trip Doggett said in a public statement.

“Without rainfall in the near future, we anticipate increased generation outage rates because of power plant cooling water issues,” he said.

The move calls into question whether ERCOT’s competitive market can ensure reliability on its own when the weather surprises.

The units returning to service amount to an additional 400 megawatts of capacity, about half the size of a new coal-fired unit, but hopefully enough to keep Texas out of rolling outages in an emergency.

ERCOT estimates the cost to keep the units on call at $5.85 million. If the plants must generate power, ERCOT would also pay for fuel. The contract ends in October. ERCOT costs are shared by member electricity companies, which tend to pass along those costs to customers.

ERCOT will use the units only in an emergency. That avoids interfering with the competitive electricity market.

“We don’t know if or how much these units will be needed, but if needed, the cost will be minor when divided by the 23 million consumers in the region and when compared to the much higher costs and problems from statewide rolling blackouts,” Doggett said.

The Public Utility Commission had instructed ERCOT to consider all available options to ensure reliability after grid emergencies earlier this summer. In early August, ERCOT came close to calling for rolling outages across the state as hot weather boosted demand for electricity and many power plants struggled in the heat.

The ERCOT deregulated electricity market is designed to make sure Texas has enough power plants at the lowest possible price. The free market is supposed to allow generators to respond to price changes to build generators or shut them down, thus keeping supply and demand in balance.

That’s why NRG already brought one mothballed plant back into service during the spring.

“It made the right business decision, and looking at the weather, it made the right decision for taking care of customers,” said NRG spokesman Dave Knox

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A new “nodal” electricity grid system could put your retail electricity provider out of business.

The Electric Reliability Council of Texas, which operates the state electricity grid, is switching to a fundamentally different operating system. The new system assigns the cost of congestion to the companies creating that congestion. This is supposed to prompt companies to find ways to relieve power line congestion and cut electricity costs.

The switch happens Dec. 1. Several experts at the Gulf Coast Power Association conference this week predicted that the transition to the complex nodal system won’t be entirely smooth. Some retailers might go out of business. Others might charge customers fees to cover new costs.

“I would expect some retailers to default in 2011,” said Chris Brewster, an attorney with law firm Lloyd Gosselink who represents cities.

Mike Cleary, ERCOT’s chief operating officer, said: “People are going to struggle. It’s the nature of the beast.”

But they won’t struggle because of any technical issue at ERCOT, he said. ERCOT is ready for the switch. The problem is that some electric providers may not be ready.

“We’re going to have issues with the market,” Cleary said.

Remember summer 2008, when several retailers went bust because they hadn’t protected themselves against the risk that wholesale power prices could spike?

At first, one retailer, National Power, tried to simply break fixed-price contracts with customers. When regulators put the kibosh on that idea, National closed shop, dumping customers on expensive providers. Several other companies shut down for the same reason.

A similar situation could happen early next year if retailers haven’t educated themselves about the new market or if the change brings surprises to everyone.

ERCOT’s new chief executive, Trip Doggett, said the council has offered training sessions for electric companies.

“We’re doing our best to educate the retail electric providers,” he said.

Brad Jones , vice president of government relations for Luminant, the power generation unit of Energy Future Holdings, said he worries that ERCOT’s collateral requirements may clash with some nodal rules. Some companies could face billions of dollars in credit calls, making it difficult for them to trade effectively, he said.

ERCOT was supposed to switch to a nodal system in early 2009, but technical and management problems delayed the move and doubled the cost to about $660 million.

At the time, the Public Utility Commission ordered an outside study of the cost benefit of the system. The study found that Texas consumers would save $5.6 billion during the first 10 years of nodal operation.

Brewster said at the conference this week that he doubts consumers will save that much. He said some retailers are adding language to their contracts that could allow them to charge customers for nodal-related costs.

“In my mind, that is very telling,” he said.

What can an electricity customer do? Watch your bills and read any bill inserts, he said.

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Servant Energy Partners is now able to do residential rates with rates as low as .102 per KWH. Also with signing up you get a $50 merchant certificate (from over 300 vendors) and a free A/C tune-up for a year plus a home energy use analysis (DFW area only) worth close to $200 from Comfort Experts. All this while purchasing 100% pollution free electricity while making a difference in the environment. Please go to http://www.gmecsepg.com to take advantage of the Servant residential rate and all we are trying to do to help our customers! Servant Energy is a national energy firm specializing in energy efficiency including utility rates, energy efficient light, sustainability and carbon footprint programs, renewable projects as well as assisting with any energy tax considerations if needed. Stay cool – here to serve!

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Dallas-based power line operator Oncor has set up a hotline to answer customer questions at 1-888-875-6279 or online at http://www.askoncor.com.

“We expect to get questions on everything from ‘How do I switch retailers?’ to ‘What is a kilowatt?’ and everything in between,” Oncor chief customer officer Brenda Jackson said.

“As we’ve heard multiple times since the smart meter questions began and the February snowstorm, customers need and want someone to turn to. Before we began stepping up, there wasn’t really anyone serving them.”

Oncor spokeswoman Megan Wright said operating the hotline probably won’t cost much, because Oncor already employs the customer service agents and experts who will answer the questions. She said if the program becomes costly, Oncor would probably ask regulators to include the cost in the rates electricity customers pay each month.

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After testing thousands of digital meters and reviewing hundreds of thousands of records, Oncor says it has found fewer than 25 defective smart meters.
That’s 25 out of 1.1 million smart meters that the regulated power line operator has installed in Texas. None of the defective meters were in Oak Cliff, Temple or Killeen – areas where customers have complained that the meters caused bills to spike.
“It’s a really nice outcome,” said Oncor chief executive Bob Shapard.
Last winter, customers complained that their electricity bills rose as soon as Oncor installed the new meters. The concerns prompted the Public Utility Commission to hire a consultant to test whether the meters and back-office equipment worked properly.
Oncor officials have said many bills rose during the winter because it was unusually cold. Electric heaters had to work harder to keep homes comfortable.
Shapard knows that response irritates people.
“It doesn’t satisfy customers to say, ‘Well, it wasn’t the meter,’ ” he said.
People want to find out why their bills rose, he said. That’s why Oncor set up a hotline to answer customer questions about electricity, at 1-888-875-6279 or http://www.askoncor.com.
The Public Utility Commission instructed utilities to exchange old, mechanical meters for new digital meters.
The new meters, sometimes called smart meters, will allow the utility to turn power on and off remotely and fix outages more quickly. The meters can also allow customers to see how much electricity they use each day, rather than wait for a bill.
Oncor has installed around 1.1 million smart meters, on its way to 3.4 million by the end of 2012. The PUC is allowing Oncor to charge customers $2.21 a month for 11 years to pay for the meters.
Shapard sent a letter on Thursday to the Public Utility Commission with the results of Oncor’s tests.
Oncor tested more than 7,300 smart meters at the request of customers. The company hired by the PUC to test meters, Navigant Consulting, tested 2,600.
Navigant found one meter that incorrectly registered higher readings, Shapard said. So Oncor tested similar meters and found around 25 with the same defect. The meter vendor paid to fix the problem, and Oncor provided electricity retailers with corrected billing information.
Shapard said those customers had paid, on average, about $100 too much for electricity.
The letter also says Oncor reviewed the records of about 780,000 customers and found human errors in about 1,800 cases. In some cases, the Oncor worker who replaced the meter read the old meter incorrectly. Shapard said Oncor corrected those errors.
Shapard said Oncor found no problems with back-office or software systems. He said Navigant hadn’t informed him of any such problems, either.
PUC spokesman Terry Hadley said Navigant probably would present its findings at the next PUC meeting, July 30. Once the commissioners have discussed the results, they will probably release the report to the public, he said.
Some retail electric providers, who compete for customers’ business, agree that the meter doesn’t tend to be the problem.
“We’re able to look at just the usage, and we’re not able to see anything in our usage data that would suggest a bias between groups that have and don’t have a smart meter,” said TXU Energy spokesman Brian Tulloh.
So what’s causing bills to rise? Shapard said most of the time, people need to shop for lower electricity rates, insulate their homes or upgrade to more efficient appliances.
“That’s 95 percent of the high bill problems in the business,” he said.

By ELIZABETH SOUDER / The Dallas Morning News

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