Newsletter Jun 2014

ENERGY TRACKER -- Our customers often ask two basic questions about fixed price electricity contracts.  First, they want to know that the price that they are being offered is the best price in the market.  Second, they want to know when they should sign up for a particular contract period.

To answer these two questions, we have developed proprietary energy price tracking software that allows our customers to track their future electricity costs through our online platform.  You can set up as many different pricing scenarios as you want and you can track the resulting energy prices, which are updated on a daily basis.  This software is proprietary software that has been developed internally in our offices based on our in-depth knowledge of the electricity markets.

This service can be made available to any of our electricity procurement customers who wish to use it.  A username and password are required to access this software.

For more information about the EnergyTracker, contact Dave Guenther 

at or call Dave at 724-458-5600.



Utility Price to Compare (PTC) Increases

If you currently receive electric generation supply or default service from your utility company, increased pricing of 20 to 30% occurred this past June 1st, across many Pennsylvania distribution companies.

Now is the time to review your generation rate and shop for a better price or price stability.  The PTC is the price per kilowatt-hour that the electric utility charges.  This price can vary quarterly.  We can assist you in evaluating that price against more stable all-inclusive, fixed-rate competitive supplier options and help you determine which is the best rate for you. 


Supplier Update - Duquesne Light Energy (DLE)

One of the competitive suppliers we work with has announced that due to increasingly volatile energy prices and shrinking profit margins, they will no longer offer customer supply acquisition or renewal pricing, effective immediately.  If you are currently in a contract with DLE, they will continue to honor their contractual obligations until your term ends, but they will not be taking on any new acquisitions.  


Volatile Capacity in PJM (Pennsylvania-New Jersey-Maryland Interconnection)

To effectively manage your energy risk, you need to understand all of the cost components found on your electricity bill and what drives those components to move.  Recently, capacity costs, which are determined by PJM's Reliability Pricing Model, or RPM, have followed a bell shaped curve across multiple utilities in the Eastern Mid-Atlantic Region.  Prices in the Western Region, including Ohio, are increasing at a steadier rate, being driven largely in part by EPA regulations.  These regulations have resulted in the retirement of 3,000 MW of capacity, as well as increasing costs, as coal plants are required to comply to those regulations.

In 2011, capacity payments accounted for approximately 15% of retail electricity prices.  In PJM, 2017/2018 capacity costs more than doubled from the 2016/2017 delivery year.  On June 1, the PJM West Capacity Charge increased from approximately $30/MW-day to approximately $125/MW-day.  You may want to evaluate whether pass-through capacity or bundling capacity as a $MWh component is a better option.  We can help you understand how these changes in capacity will affect your business and assist you in lowering your exposure and mitigating the impact of these escalating costs.



On January 6, 2014, temperatures reached an average of -10�F, with a wind chill of -33�F, which sent electricity demand to record levels.  Of the 10 highest winter demand levels ever recorded in PJM territory, eight occurred in January 2014 alone. This extended high demand placed a burden on electricity generators, resulting in unplanned shutdowns and pushing wholesale prices up, causing PJM to appeal to the Federal Energy Regulatory Commission (FERC) to lift a $1,000/MWh cap on capacity prices. This meant PJM could recover capacity costs above that threshold, and those costs were passed on to suppliers that you may have contracted with.  That ruling left competitive suppliers deciding whether they should absorb the cost and take a financial hit, or use contractual Change in Law provisions to pass through those additional costs to their customers on a one-time-only line item on a future bill.  Most suppliers have chosen to take the financial hit.


Natural Gas Storage Continues to Impact Future Pricing

After significant price spikes in January and February, we have seen near-month natural gas prices settle a little.  Since March, prices have traded in a range from $4.25-$4.90 per MMBtu.  We are currently seeing pressure on that $4.25 barrier, as the market is testing a move below that point.  Storage is still the main concern as we are still well below the 5-year average at this time.  We have, however, had an impressive streak of record injections.  These injections are easing concerns of some traders on whether we will reach average storage numbers by the turn of the heating season.

If the levels of storage injections we have seen over the last couple months continue farther into the summer, we believe we should see natural gas prices drop another 10-20% before heating season.


What We Offer

Established in 2005, Premier Power Solutions, LLC, is one of the nation's 15 largest energy brokerage and consulting firms, saving its customers as much money as possible on their energy costs. We advise large corporations, as well as operators of single locations, on trends affecting the energy markets, assist them in minimizing the level and volatility of their energy expenditures, and help them meet their sustainability goals.  Our footprint covers the PA, MD and OH territories.