Deregulation Makes Knowledge
Imperative
Energy deregulation should benefit your enterprise by cutting your electricity
costs while not becoming a complex management challenge. To deal with the
complexities involved in monitoring energy usage and choosing the best
supplier, many large-scale energy users recognize the value that an energy
partner like Pepco Energy Services can bring to the picture. We can help you
develop a well-documented view of your organization's energy history and its
future requirements which should increase your ability to negotiate and enhance
savings. In addition, we will help you develop an integrated energy strategy,
which not only includes identifying the best energy suppliers, but also
recommendations on energy efficiency solutions.
Today, buying electricity in a competitive energy market is more complex than it
used to be. Not too long ago buying electricity in a regulated energy market
was relatively simple. You bought from your local utility at a set
all-inclusive rate that had been approved by the Public Service Commission. In
this regulated price structure, virtually all large energy users paid the same
rate.
Being well-informed of your electricity usage enables you to negotiate with
suppliers for a customized price structure and specific resources. To get the
best value for your energy dollar in a deregulated market, you need to know how
you use energy, how much power your enterprise uses, where it is used and when
it is used (hourly, daily, monthly or annually). These usage characteristics
are so important in determining your price for power that every retail supplier
competing for your business will likely ask your permission to review this
information prior to providing a price quote.
What You Can Do to Take Full Advantage of
Electricity Competition
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First, identify a person in your organization who can authorize
the release of your electricity usage data from your utility to a potential
supplier. In most states, all suppliers must have your written authorization to
obtain information about your power usage needed to produce a price quote.
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Understand the energy consumption of your facilities and the rates
you currently pay your utility. This is one of the most important items in your
evaluation of a supplier's offer. Alternative suppliers will offer prices based
on their assessment of your facilities' load characteristics or hourly load
profile.
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There are several reasons your load profile is so important to a
supplier:
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Energy costs less during off-peak periods, like weekends and at night;
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Energy costs more during on-peak period, like the middle of the day; and
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Energy usually costs more in the summer than in the winter.
Once you understand the implications of these factors in analyzing your usage
pattern, you are ready to consider supply options.
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If fixed price service is available through the utility, you need
to understand your "Shopping Credit." The price you pay your utility for
electricity generation and transmission times your usage is the unique
"shopping credit" or the "price to compare" for each of your facilities. For
large enterprises, shopping credits can vary by more than 50% from the average
cost per kilowatt hour.
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Other
Considerations When Evaluating Retail Electricity Suppliers
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How can you shape your hourly load profile to minimize costs?
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What other alternatives exist to improve your facilities' energy
efficiency:
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Retrofit equipment (e.g. HVAC, lighting)?
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Improve maintenance practices on major equipment?
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Can you control the load when feasible? Have you considered:
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Energy Management Systems?
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Alternate Operating Schedules?
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Self-generation?
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Demand Response Programs?
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