EnergyWindow MarketElert TM - December 2004
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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. Following are a few of the markets you'll need to watch and understand in the coming months. An expanded state-by-state breakdown is presented in the Electric Market Roundup 2005.
December Elerts
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 already on default service will be paying rates of more than $.09/kWh for January and February in NSTAR and Western Massachusetts Electric Company.
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.
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.
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.
Quick Buyers' Tip
It's no surprise that energy prices, like prices for everything else, have trended upward over time. As time passes, energy markets yield more historical data, allowing us to get a more fact-based view of how the future might look. Examining the trends in natural gas and electric markets suggests that long-term contracts have, generally speaking, yielded better savings than a series of shorter-term contracts. The longer the contract, the greater the chance is that your savings expectations will not be eradicated by short-term reversals in wholesale trends.
Get the Big Picture
Access a wealth of information and insight by visiting the MarketElert archives. Pull up past issues on topics of interest and get a long-term picture of how markets have been behaving over time.
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