AUSenergy News Update 02/06/2014
Feb 6, 2014

In today’s AUSenergy News Update: Natural gas soars to 4-year high on cold weather forecasts, utilities could potentially benefit from increased residential demand response participants, and Maryland PSC warns customers of variable rate increases from retail suppliers.

Natural Gas Soars to 4-Year High on Cold Weather Forecasts

Summary: Cold Weather forecasts through Valentine’s Day prompt speculative trading on Natural Gas Futures, resulting in prices reaching a four-year high.
AUS Comment: As long as the weather remains cold, the market will continue to be volatile. This, combined with noteworthy storage reports makes for an unfavorable climate for pricing out gas future contracts. AUS advises against locking in anything until after the cold spell if over.

The Consumerization of Demand Response

Summary: Demand response has begun to reach the residential level. Smart meters are the key to communicating with customer-owned devices, which are becoming prevalent; but availability of programs, management of event responses, and customer engagement are still blocking these customers from being a predictable resource.
AUS Comment: AUS agrees that more incentives and rebates must be made available to residents to promote participation in voluntary shedding. Also, AUS feels that it is necessary to engage with a consultant who will work with the customer to determine expectations regarding the amount of load available to drop, timing, and communication, and that is just not cost effective on the consumer level.

Maryland PSC Warns Customers of Variable Rate Increases from Retail Suppliers

Summary: The Maryland Public Service Commission was warned customer that they may see an increase in their energy bills this winter if they are on a variable rate contract with an alternative provider. Customer should also be aware if they are on a fixed agreement that may be expiring soon, as most of these convert to a variable agreement at the end of their term if no action is taken.
AUS Comment: AUS supports this warning, although right now the solution is not to lock into fixed rates, as they will not be competitive. Utility pricing will also be affected during this cold snap, but because it is not directly tied to the market, maybe not as much. If you are a customer on a month to month variable agreement, the best solution may be to go back to being serviced by the utility – but please consult with your procurement agent before making any decisions.

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