AUSenergy News Update 02/26/2014
Feb 26, 2014

In today’s AUSenergy News Update: Pennsylvania PUC Chair responds to reports of $2,000 electricity bills, natural gas is on course to see largest 2-day drop in 11 years on milder weather forecasts, and Madison City Council postpones benchmarking ordinance.

Pennsylvania PUC Chair responds to reports of $2,000 electricity bills

Summary: After two back-to-back polar vortexes, several electricity customers in Pennsylvania have expressed shock and anger at extremely high electricity bills. In an interview, Pennsylvania PUC Chair, Robert Powelson, sent a warning to competitive retail electric suppliers that the PUC will revoke their license if they are found to have used any bait and switch tactics. In spite of the drastically rising rates, Powelson also defended the state’s electricity choice program and expressed that consumers who signed up for a variable electricity rate agreement accepted the risks.
AUS Comment: This story highlights the importance of enlisting the help of a qualified energy consultant. Choosing a competitive electricity supplier involves more than simply choosing the lowest electric rate. Adding a fixed price component to an energy purchasing strategy provides some protection against weather-related rate hikes, whereas variable rate agreements are far more susceptible to price volatility. Interviewer, Jon Delano stated, “…from the view of the customer, it’s a utility,” in his criticism regarding ‘lack of notice’ from the suppliers to their customers warning them of rate hikes. Unfortunately, 1) educating customers about the electricity market is typically not a priority, and 2) even if the suppliers in question did send out some form of notification, their customers would not be able to do anything about the situation by then.

Natural Gas on course to see largest 2-day drop in 11 years on milder weather forecasts

Summary: Natural gas is heading for the largest two-day decline in 11 years after predictions of reduced demand with milder weather forecasts. Futures have climbed to five year highs and U.S. stockpiles have been reduced to 10-year seasonal lows.
AUS Comment: The selloff may be premature as cold weather conditions are still a factor. Cold weather continues to create increased volatility in the market. AUS advises against locking in anything until after the cold spell is over.

Madison City Council Postpones Benchmarking Ordinance

Summary: The Madison City Council has postponed voting on a proposed mandatory benchmarking ordinance for commercial and city-owned buildings in Madison, Wisconsin. An ad hoc committee will be named to conduct further studies.
AUS Comment: Those opposed to energy benchmarking ordinances make the claim that “reporting energy use is costly, cumbersome and ineffective.” However, a 2012 EPA report found that buildings that benchmarked their energy usage regularly consumed an average of 7% less energy than buildings that didn’t. AUS provides benchmarking services nationwide, regardless of mandate, including those in Madison.

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