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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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There will be high demands made on the grid by the hot weather and there are things everyone can do to help conserve power during peak hours. The following are just a few small steps we can make a difference:

1. Turn of all unnecessary lights, appliances, and electronic equipment
2. When at home, close blinds and drapes that get direct sunlight, set air-conditioning thermostats to 78 degrees or higher and use fans
3. When leaving the home set air condition thermostats to 85 degrees and turn off all fans. Block the sun by closing blinds or drapes with direct sunlight.
4. Do not use dishwasher, laundry equipment, hair dryers, coffee makers, or other home appliances during the peak hours of 3 to 7pm.
5. Avoid opening refrigerators or freezers than necessary.
6. Use microwaves for cooking instead of electric range or ovens.
7. Set your pool pump to run in the early morning or evening instead of the afternoon.

We can all do our part to conserve on energy, lessen the demand on power, and insure that the rolling power blackouts we’ve had in the past are a thing of the past. Please email rduron@servantenergy.com if you need power for you facility or need an energy partner for your firm. Here to Serve!

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March 1, 2012, AUSTIN – Generation capacity for the state’s wholesale power system is expected to be tight this summer, according to a preliminary summer assessment released today by the Electric Reliability Council of Texas (ERCOT), the state grid operator and manager of the wholesale electric market.

“Based on the National Weather Service’s three-month outlook, we are expecting above-normal temperatures this summer – though not as extreme as last summer’s,” Vice President of Grid Operations and System Planning Kent Saathoff said. “If that’s the case, we expect to be able to meet the peak demand on the grid, unless we have above-normal generation outages,” he said.

Saathoff noted that initiatives are underway to increase voluntary demand reduction during peak summer hours.

“We are working with the Public Utility Commission to increase our load management options – or voluntary interruptible load that is paid to be curtailed in an emergency situation,” Saathoff said. “These are typically a mix of large industrial companies, but we’re now including smaller industrial and commercial companies and trying to facilitate the ability for these smaller customers to aggregate their load for this emergency interruptible load service,” he said.

The projected summer peak demand has been increased to 67,492 megawatts (MW) – 1,297 MW higher than would be expected with “normal” summer temperatures, based on the Climate Prediction Center’s 40 percent chance of hotter-than-normal weather for summer. The new forecast is 887 MW less than ERCOT’s all-time record-peak demand of 68,379 MW which occurred Aug. 3, 2011, during extreme weather conditions. (One megawatt is roughly enough electricity to power 200 average homes during hot weather when air conditioners are running for longer periods of time.)

“If we have a higher-than-normal amount of generation outages or if we experience record-breaking electricity demand because of extreme temperatures – like we had last summer – we may have to ask the utilities to initiate rotating outages to protect the grid from a state-wide blackout,” Saathoff said.

“Overall, we expect our reserves may get low enough to put us into the initial stages of our emergency procedures on some days, but not necessarily rotating outages,” he said.

Consumer conservation can play an important role, Saathoff noted.

“Although we implemented emergency procedures on six days last August due to low reserves, the consumers and businesses helped us reduce the demand by responding to our requests for conservation,” Saathoff said.

Recent rains have improved the drought conditions for the near term, Saathoff said.

“We don’t anticipate the drought to be a major factor this summer, but we will continue to monitor how it’s affecting capacity due to its impact on cooling water resources available for generation units,” Saathoff said. The recent rains have improved the current situation, and given our latest information, we don’t expect to have significant generation loss due to the drought this summer.”

Initiatives underway to address capacity concerns

In addition to the load management options, a number of other initiatives are underway to address capacity shortages for the short term.

The ERCOT board recently approved a process governing ERCOT’s use of emergency authority to recall idled units for capacity. Approximately 2,600 MW is currently mothballed; including about 1,500 MW which could be returned to service with one to four months notice. Although this preliminary assessment has not caused ERCOT to implement this option at this time, it is available if conditions change.

ERCOT and the Public Utility Commission have also made administrative changes to ensure that market rules align with ERCOT’s need to bring on maximum generation during peak periods.

ERCOT management also announced at the Feb. 21 board meeting that they were close to selecting a consultant on another resource adequacy initiative – a project to identify factors that influence investment decisions related to generation development. The project will consider both supply-side and demand-side resources from a wholesale and retail perspective, as well as, include suggestions for ways to enhance investments for long-term resource adequacy in ERCOT. The report is expected to be completed by June 1.

“We’re also participating in Public Utility Commission Chair Donna Nelson’s meetings with market participants concerning how to ‘get the message out’ for conservation,” Saathoff said. The preliminary summer assessment anticipates approximately 750 MW of demand reduction due to the effects of price-responsive demand, conservation appeals and other demand response programs managed by market participants, based on estimates of the results of those appeals last summer.

BACKGROUND

The preliminary summer assessment, which will be updated May 1, is a new ERCOT report – the Seasonal Assessment of Resource Adequacy – designed to improve the assessment of near-term conditions. The seasonal assessments are based on the most-current available data on seasonal weather, the status of power plants, and the impact of factors like economic activity and the ongoing drought.

The ERCOT region includes 23 million people and represents about 85 percent of the state’s electric load. ERCOT does not include the El Paso area, the Texas Panhandle, Northeast Texas and Southeast Texas.

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Most Americans aren’t doing enough to stop their homes from being energy hogs.
People have to do more — at least four energy efficiency improvements — to make a real impact on their utility bills. Unfortunately, Americans aren’t reaching that magic number, even though the government and utilities have spent hundreds of millions of dollars to get them to act.”
Most energy conserving behaviors and home improvement activities dropped significantly from last year” and now are more in line with percentages from 2008 and 2009.
Researchers looked at more than a dozen improvements and behavior changes from simply turning off lights and using less energy during peak periods to having a home energy audit. Activity fell in each category this year with respondents doing a mere 2.6 things on average to reduce energy consumption — which was not enough to lower electricity bills.
Oddly, the drop in energy-saving improvements and activity occurred even though Americans seem to be somewhat more aware that their homes need work and that their energy costs are increasing. This year, 23 percent said their homes were inefficient compared to 14 percent in 2010.
There is a reason there is a gap between perception and behavior:
• Denial. “Most Americans continue to live in denial about their energy consumption,” the report said. Despite doing less to save energy, 71 percent of respondents said they believe they are using the same amount or less energy than they did five years ago. Twenty-six percent said they were using more, and 3 percent said they didn’t know.
• A high-tolerance for bill increases. Fifty-eight percent said their utility bill would have to increase by more than $75 a month before they’d consider spending money on energy improvements. On average, respondents said it would take an increase of $112 to spur them to action and those is not a certainty give variables that can affect a bill.
• Costs. The people who most need to make energy efficient improvements are the least able to make them. Those who can better afford to spend money on home improvements were more sensitive to bill increases” and were more likely to make changes that would reduce costs. That is usually the ones that are acting.
• Misplaced priorities. “Consumers continue to prioritize the wrong things as you can see from the lack of home energy audits. Home energy audits continue to be the colonoscopy of energy efficiency. Everyone should get one, but too few actually go through with it. This year, 15 percent said they had an energy audit done on their home, compared to 20 percent last year. Only a third said they think an audit is necessary and of those people close to half said they might get one done.
The federal government should take the hundreds of millions of dollars that’s currently fragmented into best-practices tests, block grants and pilot programs all over the country and pool the money into one big pot. Then design a big national education effort to encourage Americans to take the most important four or five steps necessary to see a real reduction in their utility bills. There needs to be incentive that both creates people to act as well as results that they can look forward to.

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Did any of you open your July and August energy bill to discover some pretty high charges, shock, and then an anger that set the tone on how your bill shot up. Guess what you are not alone. The main thing to make sure of whether you are a business or home owner is that you understand what plan you are in and you are aware of the risks involved. Whether you are in a fixed, index, heat index, blend, or some other type of plan, know what contract you are in. The heat wave has made things ugly for pretty much everyone in Texas, not just the people suffering from the heat or their high electricity bills. It’s also been hell on the Texas Electricity Grid and the individual Retail Electricity Providers. Recently Indexed Plans have been thrust into the limelight, and not for good reasons. Recently, ABC News ran a story about a Champion Energy customer who opened his bill to a shock. Champion Energy deals almost exclusively in Fixed Rate electricity plans and when customers fail to renew their contracts at the end of term but fail to cancel service, they are rolled over onto an Indexed Plan, which is tied to the rates of the natural gas market. Which is all well and good, except that due to this heat wave and the struggles of the electricity grid to meet the needs of Texans, the cost of natural gas has shot to SIXTY TIMES the normal price. It’s not price gouging, it’s not profiteering, it’s just an unfortunate fact that the cost of natural gas has risen exponentially during this heat wave when the grid faces shutdown. And for customers with Indexed Plans, where the costs are automatically tied into the natural gas market through simple math, the fact of the matter is that those colossal cost increases are passed on directly to the customer. Which is why Robin Jansen was shocked to find an electricity bill covering 4 days of service that was almost as much as their entire last month’s bill. Which is a perfect illustration of one of the rarely discussed dangers of an Indexed Plan. Don’t let the REP dictate your contract and your bill. You can take ownership of this by knowing your plan your on and making sure you are locked into a contract. I will help you if you need someone to talk to that understands the market and can advise you. Don’t get caught with the high bill that might drive you to drinking. There is help and lessons to be learned that can help you plan on your energy for the future

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