On March 30, 2012, AEP filed its proposed modifications to the January 2011 ESP application. A copy of the modified ESP application is located on AEP’s website. This plan is proposed to set rates as of June 1, 2012 and includes a capacity pricing structure that retains the two-tiered system. However, under the modified ESP, the lowest capacity charge a shopping customer will pay is $146 per megawatt (MW)-day, not RPM capacity, which is set to drop to $16.46 per MW-day on June 1. Shopping customers above AEP shopping caps will continue to pay the $255 per MW-day capacity price, set in the original ESP. As a result, this modified ESP appears to be, in the aggregate, worse than the ESP ultimately rejected by the Commission. It is unknown what the final ESP and corresponding rate structure will look like. On April 2, the PUCO set a procedural schedule for the modified ESP, which includes technical conferences, testimony, an evidentiary hearing and oral arguments up through July 3, 2012. Brakey Energy continues to monitor the situation closely, and is also actively participating in the rate proceedings through its membership in the Industrial Energy Users of Ohio
The NYMEX settlement price at the end of March was $2.191 per thousand cubic feet (MCF), down about 10% from $2.446 at the end of February. This is the lowest month-end close in 10 years. For Dominion East Ohio (DEO) commercial and residential customers under Choice, the price to beat is NYMEX plus 60¢, or $2.791 per MCF beginning in mid-April. Columbia Gas of Ohio’s price to beat is currently NYMEX plus 15.3¢ per hundred cubic feet (CCF) or 37.2¢ per CCF for April. You may read more about this dip in prices in this recent Associated Press article that appeared in the Cleveland Plain Dealer: Natural gas dips after US supplies grow We expect variable rate plans for natural gas to continue to be more attractive than fixed rate contracts. Natural gas storage space is at a premium because of the warmer than normal winter and the increased output from Ohio’s Utica shale region. By July or August, there may be no storage space left, which would cause natural gas prices to further collapse to under $2. You may read more about the Utica shale well production in a recent Columbus Dispatch article. The natural gas from Ohio’s Utica share region is “wet gas”, which means that it has a higher BTU content than the so-called “dry gas” found elsewhere. Wet gas also contains other useful liquids, including oil and glycol, which makes it more valuable to extract. Because EPA rules do not permit the flaring of excess natural gas, it must be collected, stored and sold. This results in downward pressure on natural gas prices.
The NYMEX settlement price at the end of February was $2.446 per thousand cubic feet (MCF), down about 9% from $2.678 at the end of January. For Dominion East Ohio (DEO) commercial and residential customers under Choice, the price to beat is NYMEX plus $1, or $3.45 per MCF beginning in mid-March. Columbia Gas of Ohio’s price to beat is currently NYMEX plus 18.8¢ per hundred cubic feet (CCF) or 43.26¢ per CCF for March. Beginning in April, the retail adder for Columbia Gas customers will decrease 19% to 15.3¢ per CCF, and the retail adder for DEO customers will decrease 40% to 60¢ per MCF. For more information, see John Funk’s article in today’s Plain Dealer. Dominion customers who decide to switch from a retail supplier back to Dominion’s default variable rate plan, should heed the caution in this article:
“Customers who want this price must tell Dominion to enroll them in the Standard Choice Offer. Otherwise, they are randomly assigned to any supplier who may or may not charge that price.”
As reported in the Cleveland Plain Dealer today, the Public Utilities Commission of Ohio (PUCO) ruled yesterday, February 23rd, to disapprove the settlement agreement in AEP-Ohio’s rate case. This reverses their December 14th decision to approve the settlement. Note that IEU-Ohio was the only business group that opposed that settlement agreement. The PUCO press release stated:
“Upon consideration of arguments raised by parties who did not sign the settlement agreement and upon becoming aware of the actual impacts of the agreeement, the Commission found that approving the agreement does not benefit ratepayers and is not in the public interest.”
The PUCO ordered AEP to return to the rates that were in effect in December 2011, until such time as a new rate plan is adopted. By next Tuesday, February 28th, AEP must file tariffs to comply with this order. It is unclear at this time when those rates will take effect or whether there will be any refunds of January and February charges.
AEP’s original rate application, which was filed on January 27, 2011, remains in place. The PUCO gave AEP 30 days to amend or withdraw that application. The PUCO will allow any party to participate in the proceedings when they occur. We encourage AEP customers to stay informed and get involved. If you are a member of IEU-Ohio, you will be well represented in those proceedings.
With almost 600 attendees, the 16th Annual Ohio Energy Management Conference, which was held earlier this week in Columbus, was a huge success. Matt Brakey, as chairman of IEU-Ohio, served as the emcee and made presentations at two workshops. Mike Brakey was also a presenter at another workshop. You may find the presentations on the Manufacturers’ Education Council website.
On December 14th, 2011, the Public Utilities Commission of Ohio (PUCO) issued an order that:
- Modified and approved the settlement filed on September 7th in AEP’s electric security plan (ESP) proceeding;
- Approved the settlement in AEP’s distribution rate case; and
- Approved the proposed merger of Ohio Power and Columbus Southern Power to form AEP-Ohio.
New rates took effect on bills rendered on or after January 1, 2012. Some customers saw large increases in their January bills. The impact varies by rate schedule and load profile. For more information, see this Columbus Dispatch article from Sunday, February 19th: First AEP plan aided smaller businesses, and this editorial from today’s Akron Beacon Journal: Consumer unfriendly.
As noted in the article, the Industrial Energy Users – Ohio (IEU-Ohio) was one of the few organizations that raised objections to the rate proposal last year, but these were largely ignored. The PUCO staff generally agreed with IEU-Ohio, but other industrial groups supported the AEP proposal to put most of the rate increases on smaller businessses. Now that some small businesses are seeing “rate shock”, the PUCO is reconsidering its approval of the rate plan. The AEP rate plan is sure to be a hot topic at this week’s Ohio Energy Management Conference in Columbus. Stay tuned!
We recommend using natural gas over electricity wherever it makes sense. One million BTU’s of energy equates to 970 cubic feet of natural gas or 293 kWh of electricity. For example, if your average electric cost is about 10¢ per kWh, the burner-tip price of natural gas would have to exceed $29 per thousand cubic feet (Mcf) to become as expensive as electricity. Current natural gas prices are much lower than that. For Dominion East Ohio commercial and residential customers, the standard price will be $3.68 per Mcf starting in mid-February. This is down 10% from the current price of $4.08 with took effect in mid-January. You may read more about this in John Funk’s article in the Plain Dealer.
In this article in today’s Plain Dealer, John Funk describes how Mike Brakey cut the electric consumption in his Shaker Heights home dramatically through various measures, including replacing all the light bulbs in the house with LED’s. Here is more detailed information on what LEDs were used.
We installed 88 LEDs at a total cost of $2,400 over a three-year period. The combined load of the LEDs is 709 watts compared to approximately 7,000 watts for equivalent incandescent bulbs. $330 was also spent on 11 Lutron LED dimmer switches for individual rooms. If a power outage occurred, a back-up generator could operate every LED light in the home with as little electrical draw as 100 watts.
Details on the fixtures we used are shown in the table below:
|Fixture||Cost per fixture||Kelvin Rating||
|Cree RL6 650
The Kelvin rating relates to both the color of the light and the temperature. 3,000 K is a warm white light, with a tinge of yellow. 5,000 K is a cool white light, with a tinge of blue; it is better for reading. All of these fixtures are rated for a minimum of 50,000 hours of life, with less than 10% degradation.
Presently, residential electric rates across FirstEnergy territories in Ohio average approximately 12 cents per kilowatt hour. For 50,000 hours of light, this translates into $42,558 for equivalent incandescent bulbs as opposed to $4,255 for LED’s we installed. Thus, the savings would be about $38,300 over 50,000 hours of usage.
The payback period is sensitive to family living habits.
- In the extreme, if you are part of a large family that never turns lights off and they are run round the clock, 365 days a year, 50,000 hours would be 5.7 years. The simple payback period would be 4.3 months.
- If a family has each LED turned on for 6 hours per day, 50,000 hours would translate to 23 years. The payback period would be closer to 17 months.
Another benefit is that, for the next twenty or more years, I won’t hear my wife ask me to change a burned out light bulb! These payback periods might become shorter for future LED users because for the following reasons:
- LED pricing continues to fall as sales grows;
- LED technology advances are continually providing more lumens per watt; and
- Residential electric prices are likely to climb much higher over the coming years.
With financial savings of $38,300 over 50,000 hours, we have additional green benefits of:
- 742 less metric tons of CO2 (carbon dioxide)
- 4.72 less metric tons of SOX (sulfur dioxide)
- 1.25 less metric tons of NOX (nitrogen oxide)
We wanted to let you know about an upcoming educational forum, sponsored by the Geauga Growth Partnership and FirstEnergy, for energy intensive businesses in Geauga County. The topics include:
- Power quality
- Distribution system energy efficiency
- Distribution automation
- Volt/var control
- Distributed generation
Power Quality in Geauga County Wednesday, February 8th 7:30 to 9:30 A.M. (Breakfast served at 7:30; program begins at 8:00.) Punderson State Park Manor Lodge 11755 Kinsman Road Newbury, Ohio 44065 To make your reservations, call 440-564-1060 or email firstname.lastname@example.org.
The NYMEX settlement price at the end of December was $3.084 per thousand cubic feet (Mcf), down 8% from $3.364 at the end of November. For Dominion East Ohio commercial and residential customers under Choice, the price to beat is NYMEX plus $1, or $4.084 per Mcf beginning in mid-January. For more information, you may read John Funk’s article from the January 4th Plain Dealer: Dominion, Columbia rates lowest in decade