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“Energy Prices Always Go Up”

By Avalon Energy Services | Dec 10, 2011 | Comments Off on “Energy Prices Always Go Up”

There is a common perception that energy prices have been, and continue to be, on a one way path upwards. Is this the case? No. The graph above provides a historical view of natural gas prices. Plotted are the monthly average spot prices of natural gas at Henry Hub (a trading hub in Southern Louisiana) […]

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Earthquake!

By Avalon Energy Services | Aug 24, 2011 | Comments Off on Earthquake!

Wholesale electricity prices are volatile. Because electricity cannot be stored in any meaningful quantity, electricity load (demand) and supply must be matched in real-time. Matching load and demand is the challenging job of grid operators. To give you an idea of how volatile prices can be, take a look at the graph below (source: pjm.com). […]

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Trade Association Buying Groups – Who Benefits?

By Avalon Energy Services | Feb 28, 2011 | Comments Off on Trade Association Buying Groups – Who Benefits?

Do businesses benefit by purchasing energy through trade association buying groups?  In many cases “no.”  How can that be? First, some background.  The term “load profile” refers to the variation of an electricity user’s electrical load versus time.  Load profiles vary by customer categories (residential, commercial and industrial) and by individual customer within those categories.  […]

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Is the Shale Gas Revolution for Real?

By Avalon Energy Services | Jan 9, 2011 | Comments Off on Is the Shale Gas Revolution for Real?

Some have described the proliferation of shale gas plays as a “quiet revolution.”  But, the revolution is not so quiet.  Stories now appear regularly on the front page of the Philadelphia Inquirer, the New York Times, and many other newspapers far from the oil patch.  What are the facts? US natural gas production is higher […]

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Fixed Price versus Variable Price Energy Supply Contracts

By Avalon Energy Services | Nov 14, 2010 | Comments Off on Fixed Price versus Variable Price Energy Supply Contracts

When purchasing energy, there is a price/risk continuum between fixed price contracts and variable price contracts. Fixed price contracts allow you to minimize your exposure to price risk by transferring this risk to a supplier. With a variable price contract, you are accepting the risk associated with changes in the market price of electricity. This […]

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Is There a Shortage of Energy?

By Avalon Energy Services | Nov 14, 2010 | Comments Off on Is There a Shortage of Energy?

I was recently asked to review a draft of a book in which there was reference to “…rising energy demand, global climate change and limited energy supplies…”  Are energy supplies limited?  The short answer is “no.”  There is no shortage of energy in the universe and energy supplies are not limited.  This is more than […]

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Constellation Electric Offer (continued)

By Avalon Energy Services | Nov 14, 2010 | Comments Off on Constellation Electric Offer (continued)

Both of our last two blog entries have generated a great deal of interest.  Jay Hancock of the Baltimore Sun picked up on our write-up on Constellation Electric’s offer to customers in Pepco’s territory.  Below is a link to his article:  http://weblogs.baltimoresun.com/business/hancock/blog/2010/08/avalon_energy_constellation_of.html You can scroll down to our original article or access it by going […]

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PECO – Life After the Rate Caps

By Avalon Energy Services | Nov 14, 2010 | Comments Off on PECO – Life After the Rate Caps

Electricity markets were deregulated in Pennsylvania over ten years ago. At that time, the Pennsylvania Public Utility Commission implemented two measures. They allowed electric utilities to recover their “stranded costs” or the cost of investments they had made that they, the utilities, argued would no longer be of value in a deregulated environment. These costs […]

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Constellation Electric Offer

By Avalon Energy Services | Nov 14, 2010 | Comments Off on Constellation Electric Offer

A number of people in Pepco’s service territory have asked about Constellation Electric’s (Constellation) fixed price electricity offer. In the commercial world, most customers view the likelihood that energy prices will go up as much greater than the likelihood that energy prices will fall further.  I think this makes sense.  Energy prices are currently low, […]

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