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ENERGY OVERVIEW
ENERGY OVERVIEW
WHAT YOU NEED TO KNOW TO TAKE
ADVANTAGE OF THE RECENT DEREGULATION
OF THE ENERGY INDUSTRY
ENERGY OVERVIEW
Presented By
CHRISTOPHER MOORE
Certified National Energy Consultant
(917) [email protected]
Electricity …
A PRODUCT USED BY EVERYONE
Electricity …
A necessity Not a Luxury
Electricity …
A $297,000,000,000
Market
THE MARKET IS WIDE OPEN
How Deregulation Works
Delivery, Service, Billing & ReliabilityRemain the Same
Generation / Supply Open to Competition
Deregulation of the energy markets represents the greatest transfer of wealth in our lifetimes!
ENERGY DEREGULATIONConnecticut
Delaware
Illinois
Maine
Maryland
Massachusetts
New Hampshire
New Jersey
New York
Ohio
Pennsylvania
Rhode Island
Texas
Washington DC
These States have deregulated their energy markets giving you the Power of Choice
ENERGY PORTION OPEN TO COMPETITION
Deregulation means the generation portion of electricity service is open to competition. During the deregulation process the local utility is forced to sell their generation capacity, what remains is a regulated delivery (utility) company that continues to deliver electricity, maintains reliability, reads the meter, and provides customer service to the consumer.
Deregulated Electricity Generator Regulated Delivery (Utility Co)
The objective of deregulation is to offer energy customers greater choice, both among suppliers and services. Ideally that will result in increased market efficiency and dollar savings to the consumer.U.S. Department of Energy
The reality is that savings do not come by default, You Must Choose!
In a deregulated market the business must decide who to buy from, when to buy, what type of contract, how long to contract or whether they should consider a market based rate. With every option comes a certain level of risk, the decisions a business makes or fails to make is what drive the cost.
ENERGY DEREGULATION
THE PRICE OF ELECTRICITY IS HEADING UP
Annual Energy Outlook 2008
nominal dollars per barrel nominal dollars per thousand cubic feet
nominal cents per kWh
World Oil Price Natural Gas Wellhead Price
nominal dollars per ton
Coal Minemouth Price Average Electricity Price
ENERGY OUTLOOK 2008 - FUEL PRICE FORECASTS
ELECTRICITY PRICES – HIGHLY VOLATILE
This chart shows the movement of electric prices on the wholesale market
Electricity market is 10 times more volatile than the stock market
Price is now low which makes it a great time to lock in prices long term
Market Volatility
Most businesses today should protect themselves with a fixed all inclusive (non-
escalating) program
SOLUTIONS…Selecting an ESCO (Energy Supply COmpany)Energy BrokersSolarWindLighting UpgradesPower/Line ConditionersEnergy AuditsAffinity/Affiliate Fund-Raising Programs for Not-for-Profits and 501(C3) CorporationsSealantsFuel Pills
Energy Brokers work with several ESCOs and pre-screen them for integrity, proper business etiquette and rates. On large commercial deals Energy Brokers are your best bet as they can pretty much guarantee the best rates available and often these rates can be fixed as a hedge against inflation and rising costs.
Solar power, a renewable energy source, can actually pay for itself within a few short months. Due to rebates, green initiatives, government sponsored incentives, tax abatements and other programs, the cost of audits, surveys, equipment and installation can be recovered quickly. In fact, a different type of meter is used which actually spins backwards so, if you produce more energy than you need, your local utility is required by law to pay you for the excess.
Wind power, a renewable energy source, can actually pay for itself within a few short months. Due to rebates, green initiatives, government sponsored incentives, tax abatements and other programs, audits, surveys, equipment and installation costs can be recovered quickly. In fact, a different type of meter is used which actually spins backwards so, if you produce more energy than you need your local utility is required by law to pay you for the excess.
Energy Efficient Lighting
The Edison incandescent light bulb is obsoleteGovernment mandated phase out starting in
2011GE made its last Edison bulb 9-23-2010Some states have criminalized the sale
LED and Inductive bulbs save up to 75% and last for 50,000 hours
Huge lighting retrofit opportunities – less than 2 year payback
Billions of bulbs will be replacedFinancing available
Project Example:5 early learning centers
Price: $200,000
Direct Consultant Commission: $33,000 Unilevel: $16,500
Solar ArraysHuge financial incentives for customers
to install solarGovernment and private financing
optionsExceptional pricing
Installation availableAverage direct residential commission per sale $2,000 - plus $1,000 in the
unilevelAny project size
Project Example:
½ Megawatt Industrial Warehouse
Price: $2.5 MillionDirect Consultant Commission:
$200,000 Unilevel: $100,000
Energy Products For All Markets
Why Products? More money for you
No Regional, State or International Boundaries
DEREGULATED ENERGY – COMPLEX MARKETThe multitude of options combined with dramatic price fluctuations makes the deregulated market infinitely more complex.
Some energy companies can help your business buy energy at 20% to 50% off peak rates. We recommend using a company that has a simple and objective process based on proven strategies that eliminates uncertainty and volatility risk for your business.
Use an energy broker that connects businesses with the right supplier and the right contract at the lowest possible
rate.
These are just a few of the available energy providers
VARIABLE AND HYBRID RATES – DECEIVING?
Variable rate and hybrid contracts, on the surface, appear to save you money but actually cost you more than a fixed all inclusive rate contract. You should choose your supplier based on total term cost not just the rate you get today. A business that makes a decision by comparing rates only are often surprised by the volatility and hidden pass-thru charges which can add 25% or more to the energy cost.
Contract OptionsThe Plan You Should Choose Depends On The Amount of Risk That You Are Willing To Take
Month To MonthVariable Rate
With Pass Thru
Price varies Based on monthly
average market
Risk:Very High
Hourly PricedVariable Rate
With Pass Thru
Price varies hourly based on market and
can easily double or triple
Risk:Extremely High
HybridPartial Fixed Partial
Indexed
This contract type is very specialized – for users with large night
time loads
Risk :High For Most
Fixed All InNo Pass Thru
Eliminates all risk, this rate is constant and includes all
pass-thru charges, no bandwidth
Risk:None
Most businesses lack the time, expertise, and tools to track the energy market and make good purchasing decisions. Businesses today rely on experts when it comes to financial, insurance real estate and other complex transactions.
Actual Cost SavingsRetail Seafood House Paying $3,000 Monthly Annual Usage: 241,900 kWhOld Rate: $0.14555New All Inclusive Rate: $0.1199
3 Year Savings: $52,657
Automotive Repair and Body Shop Paying $7,500 MonthlyAnnual Usage: 597,200 kWhOld Rate: $0.145000New All Inclusive Rate: $0.1175
3 Year Savings: $128,667
Retail Furniture Store – 7 Locations Paying $9837 MonthlyAnnual Usage: 945,200 kWhOld Rate: $0.12490New All Inclusive Rate: $0.125
3 Year Savings: $81,257, First Year Savings $5,100
Large Manufacturing Facility Paying $85,000 MonthlyAnnual Usage: 7,846,153 kWhOld Rate: $0.130100New All Inclusive Rate $0.117400
3 Year Savings: $1,215,484
Medical Center Paying $25,000 MonthlyAnnual Usage: 1,849,650 kWhOld Rate: $0.1622New All Inclusive Rate $0.0911
3 Year Savings: $527,759
Q & A
THANK YOU