According to mysuburbanlife.com First Energy Solutions beat out ComEd to sell electricity to Lombard Illinois with offers as low as 4.4 cents per kilowatt hour (kWh). The community decide to go with 4.6 cents kWh plan instead of the 4.4 because the higher rate is 100% renewable.
Government aggregation makes it possible
The municipal aggregation helps cities get a low rate on electricity by pulling its residents buying power. Providers like First Energy Solutions will offer lower prices for consumers buying in bulk. Consumers give up power to choose their own provider to a board of trustees. Electric companies bid and the board decides on with which company to sign a contract. There are options for consumers who want to choose on their own living in a Government aggregated area.
Opt Out vs. Opt In
Opt out is the most common type of municipal aggregation. Consumers have to fill out a form to opt out of aggregation so they can choose a provider. Opt in means you have to fill out a form to accept aggregation.
Residents in Lombard, Illinois, will have to opt out to find their own electric supplier. Saving money with a lower cost provider is the most common reason households opt out of Government aggregation. With First Energy Solutions’ rate of 4.6 consumers looking to save money would have to find a lower rate.
The 4.4 cents kWh rate was offered to Lombard’s Board of Trustees was a lower rate. Shopping for a new electricity company is recommended before opting out. Consumers are not guaranteed to find a lower cost electric provider.
Companies in Texas like Phillip 66 are looking to save on electricity by becoming power marketers. Cutting out the middle man and buying electricity at market prices adds high risks and high rewards due to the every changing market.
If the natural gas market turns for the worse, companies will lose millions. Natural gas prices are at a ten year low. Some market analysis says prices should go up in the near future. This makes it a prime time for power marketers to buy for the long run. As natural gas prices increase heat rates decreases which represents their inverse relationship.
Electricity Prices = (Natural Gas Prices) × (Market Heat Rate) + (TDSP Charges)
The ideal situation for Phillip 66 is to buy both natural gas and heat rates low. Because of their inverse relationship they will never be low at the same time. Companies will risk money on what the market does. If a company thinks natural gas prices are going to fail, it will buy long term heat rates hoping to save money on the difference. Same if natural gas prices are expected to increase; the company will buy natural gas and wait to buy heat rates.
Phillip 66 is the latest company in Texas to file with the PUCT to become a power marketer. At one point there was talk about Wal-Mart becoming its own retail electric provider.
Small businesses wanting to become power marketers will have a harder time than bigger businesses because of the extra cost. Large businesses have the staff to handle the legal side and energy managers to handle the market side. Many small businesses rely on energy consultants to manage their electricity.
Call 1-800-971-4020 to speak with an energy consultant.
