AUSenergy News Update 12/16/2014
Dec 16, 2014

In today’s AUSenergy News Update: a 15-year commodity super cycle comes to an end with the falling price of oil, Ill. customers asked to pay twice for nuclear energy, ComEd gets a reprieve on order to provide smart-grid updates to customers.

US Shale Oil Revolution

Summary:  We may be seeing the end of a 15-year commodity super cycle that saw the price of oil rise from an all-time low in early 1999 to a $100-plus level in the first half of 2014. The key breaking points in the cycle may well be the 2008 starting trend toward lower demand as well as today’s boom in unconventional drilling.

AUS Comment:  Whatever the cause in the price of oil dropping, it can only be a plus for energy customers as gas prices continue to fall across the U.S. However, given this new boom in lower prices, we are in danger of repeating the past, getting too comfortable with today’s lower fossil fuel costs, and forgetting the need to create new sources of renewable energy for the future.


New Math to Help Exelon’s Nukes

Summary: 
PJM has grown increasingly concerned about grid reliability during high-demand periods. In response, they approved changes that will increase penalties for those generators that don’t deliver upon request, while raising the payment fee for generators that meet peak demand needs. These changes, to take effect in 2018, will provide millions of dollars in additional revenue to Exelon, for the power generated by their nuclear stations, However, ComEd customers will be paying for that jolt in revenue to the tune of a 19% rate increase for their electricity.  In addition, Exelon is asking for a rate increase right now or it is threatening to close 3 of its six Illinois Nuclear Power stations.

AUS Comment:  We understand that Exelon’s nuclear facilities have been undervalued, incurring financial losses over the years. However,  we have to wonder how Exelon can justify having customers’ current rates increased to compensate for those loses, when in just three years, the company will receive an estimated $560 million for capacity peak demand, as generated by their nuclear facilities.


Illinois Senate Grants Extension for ComEd’s Smart Meter Program

Summary:   The Ill. Senate voted 40-4 to approve a two-year extension on the utilities’ smart grid program. This means that ComEd will have extended time to report on the progress of their program, as put forth in 2011 under the Energy Infrastructure Modernization Act that granted $2.6 billion in consumer rate increases over 10 years, to digitize the electric grid.

AUS Comment:  Back in 2011, ComEd President and CEO Anne Pramggiore said, “Illinois’ grid modernization law is a promise of value made to Illinois consumers. These performance metrics hold ComEd financially accountable to deliver on that promise.” Is ComEd now hedging on that promise? Customers deserve to know what progress has been made, and when they can expect to see savings versus rate increases.

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