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) […]
Read MoreWholesale 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). […]
Read MoreDo 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. […]
Read MoreSome 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 […]
Read MoreWhen 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 […]
Read MoreI 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 […]
Read MoreBoth 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 […]
Read MoreElectricity 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 […]
Read MoreA 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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