Question of the day, Risk of variable rate electricity supplier vs potential savings

Sent: Tuesday, March 30, 2010 8:54 AM
To: Jeffrey Kurtz

The variable rate concerns me.  Has the rate ever gotten above .10?

Carol

From: Jeffrey Kurtz

Good morning, Carol!

There is no history in PA because deregulation just happened, so we’re working entirely with forecasts and experience in other states.

The attached analysis was just done within the last week or so.   You will see that the projection is for rates to stay well below PPL’s $.104 level.   Even if it went above that in July and August, your savings for the other 10 months would far outweigh a brief rise.

In Massachusetts  and New Hampshire the year following deregulation prices fell sharply.   Companies who had signed 12 or 24 or 60 month contracts were stranded with excessive prices for the remainder of their contracts.

In addition, you can switch to any other supplier at any time.   I you feel that we are pricey for even one month you can let us know and switch to another supplier.   We have no fees for canceling.

Be certain to check the terms and conditions of other suppliers.   Many have a ‘Forde Majure” clause or a clause that may say “ If the energy market fluxgates this rate may be adjusted”.    I saw that on two contracts in Allentown last week.

We have a couple clients who switched half of their accounts to Glacial and half elsewhere to compare for a period of time.   

Thanks for the detailed questions!

Jeff Kurtz

Business Development Manager

Glacial Energy of PA

570-401-4843

PA Gross Receipts tax in savings comparisons of electrical suppliers.

Let's try to explain where the PA Gross Receipts Tax fits into the comparison of Glacial Energy rates and PPL rates.  Believe me, it's IN there.

Open the PDF document stored HERE and follow my calculations.

First off, the 2010 PPL bills for a person who has not chosen an alternative supplies are actually a bit simpler than in the past.   You will see the Generation Charge (for a GS3 rate) are showing all kwh charges at 10.125 cents/kwh.  

The handwritten calculation at the left shows the total charges for Tranamission and Generation to add up to $15,589.68 for this customer, who had a usage of 15,281 kwh in the month.   That yields a total rate of $.10483 (10.4= cents) / kwh.   The paragraph on page 2 shows that this INCLUDES the gross recipeits and other taxes.

Page 3 shows the bill for a Glacial Energy customer for roughly the same period.   Calculating the $/kwh with Gross Receipts tax added in  shows $.08873/kwh (8.873 cents).

By calculation, this is a net savings of $.016/kwh, or 14.8% for the month of February.  ($.016/$.10483 = .148 or 14.8%) 

That savings percentage is predicted to improve during the spring months, as we have discussed.

If you would like to discuss this analysis, or have other questions, please don't hesitate to call me at 570-401-4843.

Thanks,  and have a GREAT week!

Jeff Kurtz – Business Development Manager

www.glacialenergy.com

Jeff.Kurtz@GlacialEnergy.com

717-620-9676 office       570-401-4843 cell phone

Fax the Graph and the Billing pages of your recent PPL bill to: fax - 570-647-4053or  717-370-5325 for analysis.

·  GREEN energy options are available

Glacial Energy of Pennsylvania, 1000 Liberty Avenue, Pittsburgh, PA 15222

Downward trend in electricity wholesale cost reported.

This was taken from the Harrisburg Patriot News 3/2/10.   See the last paragraph regarding the downward trend of wholesale electricity costs.

PENNSYLVANIA BUSINESS                           

 (to discuss, contact Jeff Kurtz, Glacial Energy  570-401-4843

News on Economics & Finance from The Patriot-News                                    

PPL seeks another rate increase

Tuesday, March 02, 2010

BY DAN MILLER danmiller@patriot-news.com

PPL customers saw their bills go up 30 percent when rate caps came off at the beginning of the year, and another rate hike could be on the way in January.

PPL on Monday said it will seek a "modest" increase of about $7.50 a month in its distribution rate from the Pennsylvania Public Utility Commission.

The increase would apply to all PPL customers no matter whether they have switched to another electric supplier because all PPL customers pay the company's distribution charge.

The roughly 25 percent of PPL residential customers who have switched to another supplier could pay a different rate for electricity generation, which makes up the biggest portion of an electric bill.

PPL said it has not finalized how much of an increase the company will seek in the distribution rate when the application is made to the PUC at the end of March.

PPL President David DeCampli said the increase would not exceed $115 million, or about a 2.5 percent increase in PPL's total retail revenues.

PPL spokesman Ryan Hill said the request would be comparable to the last distribution rate hike the PUC granted effective Jan. 1, 2008. Hill said that increase added less than 25 cents a day to the average residential bill.

Of PPL's average residential bill of $137, about $35 is for distribution charges.

Hill said the rate increase also would help PPL secure financing for distribution system improvements that could minimize the cost impact on consumers.

DeCampli said even with the distribution rate increase, some customers could see a decrease in their bill in 2011, based on the wholesale price PPL has been paying for electricity generation in 2010.

The wholesale price is what PPL and other suppliers will use to set generation rates in 2011. So far, that rate would translate into a lower generation charge than residents are now paying, Hill said.

~~~~~~~~~~~~~~

Posted 3/4/10 by Jeff Kurtz, Business Development Manager, Glacial Energy of PA   570-401-4843   jeff.kurtz@glacialenergy.com

Deregulation of electricity from PPL, Penn Power, DQE and UGI utilities

Glacial Energy is now a licensed electricity supply company (not a broker) for any commercial or related residential account from Penn Power, PPL, UGI or Duquesne Light!

If you would like to enjoy a 2010 estimated average rate of less than 8 cents per KWH, please fax a copy of your bill to me at 570-647-4053 or 717-370-5325 for a free analysis for the next 12 months.

We are a month to month supplier, no annual or long term commitment, no fee to enroll or cancel. no usage requirements, and potentially a referral reward program in you qualify.

For details call me at 570-401-4843 or 717-620-9676, 7 am - 7 pm  or email at jeff.kurtz@glacialenergy.com

Thanks, Tell your friends, and Have a GREAT day!

Jeff
Business Development Manager, PA