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The Reality of Expiring Electric Rate Caps in PA

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800.238.6753 www.utilitech.com. Presentation For The HRS/TND SEMINAR. The Reality of Expiring Electric Rate Caps in PA. Dedicated to Producing Tangible Savings for Our Clients. Who is UtiliTech? Founded in 1991 - Private Company, Headquartered in SE PA

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the reality of expiring electric rate caps in pa

800.238.6753www.utilitech.com

Presentation For The

HRS/TND SEMINAR

The Reality of Expiring Electric Rate Caps in PA

dedicated to producing tangible savings for our clients
Dedicated to Producing Tangible Savings for Our Clients

Who is UtiliTech?

  • Founded in 1991 - Private Company, Headquartered in SE PA
  • Our primary mission is to produce tangible cost management and savings for our clients by employing systematic review, analysis & energy procurement strategies in deregulated states

What does UtiliTech do?

  • Energy Procurement, Supply & Management Services
  • Bill Audit Services – Gas, Electric, and Telecom
    • Unbiased & Independent Analysis
    • Utilize proprietary database of rates and tariffs to find savings
    • Implement and validate anticipated savings with suppliers
  • Manufacturing tax Audits
  • Energy, Telecom, and IT Management Consulting

UtiliTech is your Advocate!

delivering results for a diverse and esteemed client roster
Delivering Results For A Diverse And Esteemed Client Roster

Just a few of our many satisfied clients…

Healthcare

Financial Services

Education

Manufacturing

Government

Retail

customer impact
Customer Impact

Electricity Deregulated in PA in 1996

  • Generation, Distribution, Transition, Transmission, etc. broken out
  • Generation is only portion open to competition
  • Bill explodes from 1 page to 4 or more
  • Pilot Program begins
  • After Pilot Program
customer impact1
Customer Impact

Electricity Deregulated in PA in 1996

  • Rate caps for generation costs established
  • Expiration dates set by PUC
    • Allegheny = 12/31/2010 (700,000)
    • Duquesne = 03/1/2002 (600,000)
    • Met-Ed (FE) = 12/31/2010 (500,000)
    • PECO = 12/31/2010 (1,500,000)
    • Penelec = 12/31/2010 (600,000)
    • PPL = 12/31/2009 (1,400,000)
customer impact2
Customer Impact

Impact of PPL Rate Caps Expiring

  • Generation Rate Caps Expire December 31, 2009
    • Will result in total bill cost increases for the majority of customers
  • Increase will vary by rate class and rate structure
    • Residential
      • from approx. 34% to 78%
    • Small Commercial/Industrial (GS1, GS3, GH1, GH2)
      • from approx. -2% to 125%
    • Large Commercial/Industrial (LP4, LP5, LP6)
      • from approx. 32% to 96%
customer impact3
Customer Impact

Why Rates Will Change

  • Customers will see REAL cost of generation
  • Individual impacts will vary by customer
  • Revised tariffs will have large effect on some rates
    • Eliminating the demand portion of the generation charge
    • Declining block energy of the generation charge will terminate
    • Eliminating Time of Day; demand charges will be based on the highest kW during all hours in the bill period in Distribution and Transmission.
    • Eliminating EDI/IDI credits
likely concerns of ppl customers
Likely Concerns of PPL Customers

What are the specific concerns today?

  • Electric cost containment and management due to de-regulation and volatile market costs
  • Alternate supplier options
  • Relationship between alternate suppliers and local utility companies
  • Knowledge and understanding of multiple pricing options
  • Budget certainty
  • Fear, Uncertainty and Doubt about current and future energy markets!
customer options
Customer Options

What Can You Do???

  • Nothing – wait for PPL to establish new tariff rates
  • Purchase generation from deregulated supplier
    • Month-To-Month
    • One year agreement
    • Two year agreement
    • Three year agreement
    • Full Load
    • Partial Load
customer options1
Customer Options

What Can You Do???

Review ALL Energy Conservation Projects

  • Lighting Retrofits
  • New Technology for Equipment Replacement
  • Automation and Control Systems
  • Motion Detectors
  • Solar Panels
procurement process
Procurement Process

What Needs To Be Done

Phase 1 - Procurement

  • Evaluate and define energy usage and demand data from energy bills.
  • Evaluate current contracts with existing energy suppliers.
  • Develop goals for energy cost and risk management.
  • Request proposals from qualified energy suppliers.
  • Evaluate proposals.
  • Negotiate contract pricing and terms with selected supplier(s).
  • Manage contract execution.
procurement process1
Procurement Process

What Needs To Be Done

Phase 2 – Bill and Contract Management

  • Examine and analyze bills compared to the contracts on an as needed, on-going basis during the term of this Agreement.
  • Monitor energy consumption patterns for significant changes.
  • Review supplier price performance compared to utility price-to-compare or other appropriate benchmark.
  • Monitor contracts relative to expiration and proactively engage the suppliers to ensure continued optimal results.
consultant or do it yourself
Consultant or do it yourself?

Why Work with a Consultant for Electric Procurement?

You have a business to run

Pricing competition    

Knowing the utilities and commodity markets

Market timing

Contract review

Follow up process after contract implementation

Several billing options from consultant

slide16
Q & A

QUESTIONS AND ANSWERS

proven results
Proven Results

To date UtiliTech has:

  • Performed energy procurement, utility, and telecom audit
  • Provided services for more than 2,500 clients across the US since 1991
  • In 2008, UtiliTech managed over $325,000,000 in

energy procurement costs

  • Our audits have identified over $80,000,000 in refunds and savings opportunities
  • Energy procurement and audit services are provided at no cost to the customer!
mastery of the energy markets
Mastery of the Energy Markets

A Team With Extensive Experience

  • More than 80 years of energy industry knowledge on staff
  • 40 plus years of experience in energy deregulation and procurement
  • Full-time energy market price monitoring and analysis
  • Understanding tariffs & regulatory implications
  • Extensive experience with energy supplier contract language and pricing options
  • Extensive experience with all types of business, non-profits, government agencies and education institutions
  • Proven ability to deliver bottom line results!
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