In today’s AUSenergy News Update: Record-setting cold temperatures set new PJM record for Nov., Variable-rate electricity contracts prove costly in PA, Maryland proposes better advance notice for rate changes, Demand Response gets a thumbs up in new Senate bill.
Summary: Last week’s cold spell set a new record for November peak demand, topping 2013’s record setting year. Real-time prices for Baltimore Gas & Electric, Potomac Electric Power and Public Service Electric & Gas zones ranged above $100/MWh from 3:20 pm to 5:30 pm and from 6:05 pm and 7:20 pm EST Tuesday.
AUS Comment: With record-setting temperatures happening again, those customers who did not lock in pricing early in the year, should be prepared to see a pricing repeat of last year’s spikes.
Summary: Variable rate plans can spike when severe cold weather causes electric prices to spike. PA residents experiencing variable rates for the first time with their choice in energy providers, are turning back to the utility for regulated rates without severe fluctuations. Many residents had initially signed up for a fixed-rate plan, were unaware that their plans had expired and were now variable.
AUS Comment: Looking for the lowest price is never the best way to choose your provider. You need to be aware of all contract terms and conditions, to save yourself from costly situations like volatile price swings in the middle of winter. Using an Energy Consultant can help save time, money and aggravation down the line.
Summary: Staff of the Maryland PSC proposes that the Commission adopt regulations require a notice of change in a retail supplier’s rate prior to the rate being billed to customers and require what Staff terms a “soft verification” that demonstrates the customer’s willingness to maintain the revised agreement with new rates and or fees.
AUS Comment: Not every customer is aware of when their contract is up for renewal. This proposition gives customers advance notice and the ability to avoid high variable rates during their renewal terms, rather than being surprised by them and having to pay the price. We support this proposal, but would like to see customers be better informed from day one regarding variable rates and their vulnerability to energy market price swings.
Summary: Senator Heinrich’s bill clarifies that FERC has the authority, under the Federal Power Act, to require regional grid operators to allow for the use of demand response; providing incentives for consumers to reduce their energy use on high impact days. This overrides an earlier ruling by the U.S. Court of Appeals for D.C. Circuit, on May 23, 2014, that ruled the FERC did not have the authority to promote demand response as an alternative to the increased generation of power.
AUS Comment: We believe demand response offers an important option that benefits both consumers and the security of the electric grid. Through this grid, consumers will receive compensation and the threat of regional brown-outs or black-outs will be lessened or even removed.
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