• Broker Service

How Energy Supply Can Create Value For You

Many firms or governmental entities either ignore or place a lower priority on finding ways to reduce energy expenditures since these essential costs are a relatively smaller percentage of total operating expenses. A thorough and unbiased review of energy costs, whether it is alternative supplies, tariff structure or opportunities for special contracts with the local utility are essential in today's changing regulatory and economic climate.

Many states have implemented competitive rules for the deregulation of natural gas or electricity. The deregulation model provides the opportunity to lower energy costs.

Utility's rates are changed after the conclusion of a rate case and subsequently approved by the regulatory agency. Once a rate is used for billing purposes, rate reviews are usually not a normal course of action for the utility. Or load pattern changes resulting in a more opportunistic rate being available.

Today's economy may mandate a change in operations; e.g., reduce shift operations from 8×5 to 10×4. There is an economic value of reducing energy costs in such a scenario that should be reviewed in order to fully evaluate costs/benefits.

The above opportunities are available when the economy continues to struggle and business and government are under pressure to reduce expenses. Our partnership normally presents ideas or alternatives that do not increase out-of-pocket expenses and directly improve the bottom-line.

The incumbent electric utility (EDU) or natural gas utility (LDC) provides service and includes two levels of prices: (1) delivery or distribution; and, (2) supply. The delivery price is paid by all customers and generally represents the cost to deliver service to the customer's meter. These delivery costs include service restoration, reading meters and billing plus all costs related to the EDU or LDC's distribution plant investment, eg. poles, wires, lines. Savings are achieved through the purchase of electricity or natural gas from another supplier who may have lower avoidable prices than the EDU or LDC. Customer's with monthly consumption of 2800 kw or less have an avoidable price component of approximately 55% while larger customer's with a demand greater than 15 kw have approximately 10% of the demand price and 100% of the energy price as avoidable. All natural gas customers can expect the avoided price to be approximately 50%.

The avoidable price is related to the generation and transmission of electricity or the purchase and transport of natural gas. The EDU and LDC is required to maintain what regulators refer to as the supplier of last resort even if a customer secures supply from an alternative supplier which always guarantees supply. Regulatory agencies retain over-sight responsibilities on matters such as complaints, service standards and has additional responsibilities related to certification of alternative suppliers. All of this is designed to minimize customer risk.

Broker Service Savings To Date $14,822,000