EnergyWindow MarketElert ^TM - December 2004 Supplement
Electric Market Roundup - 2005

'Tis the season to take a look at the country's deregulated markets in our Annual Electric Market Roundup.

Generally, higher wholesale prices have limited savings opportunities in numerous competitive energy markets, but as more areas turn to competitive default or standard offer service, and as utilities pass along higher fuel prices, 2005 should present opportunities for energy managers to mitigate some of the upward price pressure and in some cases, achieve considerable savings.

• Illinois - ComEd is still the most active territory in IL. Transition period ends December 31, 2006. New CTC and PPO rates due out in February, poised for starts in May. Major shopping activity will be in Feb-April. CTCs may fall below $0.00 for customers currently on PPO, thus eliminating that option. Those customers with multi-year CTCs will also not be able to return to bundled service and will face a choice of taking hourly pricing (Rate HEP) or buying from a competitive supplier.


• Maine - Maine Public Service rates are set through 2006, but Standard Offer in Bangor Hydro and Central Maine Power are north of $.075/kWh. Shopping in those two utility areas may provide savings for short terms and budget certainty for longer terms.


• Maryland - The Second Standard Offer Service bidding process will get under way this month to set rates between June 1, 2005 to May 31, 2006 for customers of less than 600 kW peak demand. All larger customers will be put on hourly pricing beginning June 1, 2005.


• Massachusetts - Standard Offer service (fixed regulated rates) is ending at the end of February 2005. All customers on Standard Offer service will automatically be placed on Default Service - meaning a hefty increase in electric rates. Many of those on default service will be paying rates of more than $.09/kWh for January and February in NSTAR and Western Massachusetts Electric Company.


• Michigan - DTE's final rate order governing tariff rates through December 31, 2005 has new rules that require switched customers to give notice of their intent to return to bundled utility rates during the summer by December 1st of the year prior (though customers will have until December 31st of this year to comply). New switchers must remain off tariff for a minimum of two years. Violation of either requirement will mean exposure to the higher of market rates plus 10% or bundled tariff rates plus 10%. Nonetheless, it looks like there will still be some appreciable headroom here, mostly for secondary accounts.


• New Jersey - The third Basic Generation Service (BGS) auction is slated for February 7, 2005, with the minimum bid price for Fixed Price accounts pegged at $.074/kWh. This year the auction will be providing only one third of the Fixed Price energy, with the resulting price a combination of the past two auctions pricing. Accounts > 1250 kW peak load share and others in previously hourly rate classes will be charged PJM real-time spot prices plus a half-cent retail adder. The retail adder will also be added to fixed price accounts between 750 kW and 1250 kW.


• New York - Still a very good market based on tax elimination on delivery costs and backout credits for customers that switch ranging from one to five mills/kWh. NYSEG, NIMO, RGE are the EDCs with the largest credits.


• Washington DC - New Standard Offer rates are finalized in DC, and will result in stiff increase for customers in the capital. New rates create shopping credits in the low 7 cent per kWh range for many end-users. Accounts greater than 100 kW have seen savings of 10-12%. But you must hurry. Shoppers must switch in time to accommodate a power flow of February 8, 2005 or be on tariff rates for a full year. More on DC Standard Offer Service at DC SOS Page.


• Texas - Still the best market for electric savings, rising gas costs impact generation prices here more quickly than any other. Utilities can raise rates twice per year and more if deemed an emergency. Many suppliers ensure a very competitive market and consistent savings off the PTB rates.


• California - Customers on Direct Access still have the opportunity to shop. Those that are not will have to see what transpires in terms of legislation. Gov. Schwarzenegger is decidedly pro-market but will not compromise reliability to stimulate activity.


• Connecticut - Connecticut Light & Power (CLP) has requested a rate increase of approximately 17% based on their Standard Service auction results for 2005. If approved, this would make the average shopping credit about $.072 cents/kWh, enough to open up this market if wholesale prices fall off through the winter.


• Oregon - Good and bad news in Oregon. The good news is that shopping is possible with modest savings available. Bad news is a short window of opportunity in the fall to choose an alternate supplier and a limited pool of suppliers.


• Ohio - Market Stabilization Plans have been instituted for in Ohio, making generation prices low but adding various stabilization charges replacing transition charges. Very limited opportunities are available for 2005, with the possible exception of Cinergy.


• Pennsylvania - Customers in Duquesne will switch to a new default service (either hourly or fixed depending upon their rate class) on January 1, 2005. Customers switching in January will be subject to the new rate until their scheduled meter read. Suppliers report savings of 12-16% widely available among GL, GLH, and L accounts, with some savings for lower load factor GS/GM accounts as well. PECO customers, especially low-load factor small commercial customers, may find savings if wholesale markets cooperate, but care needs to be given that switching is done in compliance with PECO's policies or a severe ratchet demand charge will be levied.