In today’s AUSenergy News Update: Energy Future Holdings files for bankruptcy, electricity prices will rise as power plants are shut down, and Connecticut Senate approves Bill of Rights for electricity customers.
Summary: Energy Future Holdings (EFH) has filed for Chapter 11 Bankruptcy prior to a deadline this week for the payment of $100M in debt. The total debt burden of the Texas utility is more than $40B.
AUS Comment: Bankruptcies among suppliers are not entirely uncommon and are not cause for alarm. There are provisions in all supplier contracts that account for this type of situation. In the worst case scenario, the terms and conditions of the agreement will be simply assigned to a new supplier. There is never a chance that a customer’s power will get shut off if a supplier goes out of business.
Summary: This article sums up several factors contributing to the ongoing trend of rising electricity prices in the U.S., particularly in California, including the retirement of several coal-fired and nuclear power plants, volatile natural gas prices, increased environmental regulations, higher emissions standards and state renewable energy mandates.
AUS Comment: The article fails to mention one of the largest contributors to rising electric rates: delayed infrastructure improvements that can no longer wait. While it is prudent to encourage the use of clean renewable sources of energy over that of polluting fossil fuels, states should carefully analyze the market impacts of their RPS mandates to ensure a balanced approach. AUS agrees with the idea that if states push too fast on renewables, and as a result, electricity prices rise too high too quickly, then renewable energy will suffer a backlash that could set back the environmental goals we are all striving to achieve.
Summary: In response to thousands of customer complaints, this Senate-approved legislation calls for several measures to help protect residential customers seeking to purchase electricity in the third-party market including: the redesign of the electricity bills, the Energize Connecticut Website, and provisions to help customers change suppliers quickly, and reduce early termination fees for those who switch providers. It now goes to the state House of Representatives for consideration.
AUS Comment: The redesigned electric bill would be required to display the third-party supplier’s rate and the standard offer rate for comparison. The bill must also reflect any change in the customer’s rate effective for the next billing cycle, the term and expiration date of current rates, as well as the dollar amount that would have been billed under standard service and any applicable cancellation fees.
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There are many complicated charts, graphs and calculations that experienced energy professionals use for weather normalizing usage data for various reasons. In our industry, this is most important when determining contracted volumes for natural gas futures...