Iberdrola makes a bid to soothe N.Y. regulators

A Spanish newspaper is reporting that Iberdrola has made a bid to satisfy some of the concerns expressed by New York regulators about the pending merger with Energy East.

Citing unnamed sources, the newspaper said Iberdrola has proposed the following:

*Sell Energy East's non-wind assets.

* Sell regulated assets worth $200 million.

Read a summary of the story here.

Many express interest in Energy East merger

Seventy parties are listed on the "Active Party" list assembled by the New York State Public Service Commission's hearing into the Iberdrola/Energy East merger.

See the list here.

Attempts to iron out differences between the merger partners and regulators failed earlier this month. The PSC claims the merger agreement fails to adequate consumer protections, among other findings.

See the entire PSC file on the merger here

Interestingly, while the City of Lockport and the City of Rochester are listed as active parties on the list, no other municipalities appear to be listed, and are cut off from taking part in the testimony.

Rebirth of nuclear power

NPR has an interesting piece this morning about the prospect of more nuclear plants being built around the country, with the customers footing the bill.

See the story here.

With demand on new non-polluting electric generation sources, nuclear is increasingly become a viable option.

Where did all the contributions go?

The NYSEG Foundation folded in 2004, and with it went hudreds of thousands of dollars in contributions to Southern Tier charities.

According to tax records, the foundation distributed the following amounts;
1999: $486,005
2000: $760,125
2001: $775,720
2002: $721,017
2003: $238, 923
2004: $8,700

Some of the region's charities lost significant contributions when the foundation folded.

Here's a very partial list of some of the recipients of NYSEG Foundation money:
BU Foundation: $4,240
Broome Council of Churches: $10,000
Broome Community Charities: $10,000
First Night Binghamton: $15,000
Phelps Mansion: $5,000
Roberson Memorial: $5,000
United Way of Broome County: $35,400
United Way of Buffalo/Erie County: $23,400

Energy East spends $340,000 on lobbying Congress

Read the news story here.

The company spent $140,000 lobbying lawmakers in Congress in the second half of 2007, according to a form disclosed Feb. 13 by the Senate's office of public records, the Associated Press said.

Energy East lobbied on bills to establish industry standards for green house gas emissions and to increase funding for sustainable fuel research. The New Gloucester, Maine-based company also lobbied on legislation aimed at lowering taxes for middle and low-income families.

Energy East annual report

The company just posted it's glossy annual report.

Read it by clicking on the above link.

Anything pop out at you?

March bill preview

Through most of March, NYSEG's variable price has remained below the fixed-price of 12.55, according figures published on the NYSEG Web site.

As we near the close of the month and as of today, electricity is priced at 11.3513/kwh vs. 12.55 for the fixed-price plan. Mid-month, the variable price peaked at 11.9565/kwh, but has been on the decline since.

Keep tuned as we run down the monthly cost comparison at the end of the month.

NYSEG terminates PAC

See the list of NYSEG employees that have contributed to the company's political action fund.

According to the records on file with the New York State Board of Elections, the political action fund was terminated in December 2007.

According to records on file with the New York State Board of Elections, the committee collected $146,271.43 from employees since the the baord started keeping track on the Net.

The fund contributed to candidates that are friendly to NYSEG or could have had input into decisions affecting the utility. Members of the energy committees on both the Senate and Assembly sides were among the favorites.

Juicing up the grid

"Electricity reliability may not be top-of-mind with consumers but it is with technology wonks. Albany (N.Y) is now testing the use of the latest iteration of grid technologies that can carry 10 times the electrons of conventional copper wires."

Read Ken Silverstein's blog from Energy Central

Regulators forming policy for time-of-use metering

Staff of the New York Public Service Commission is calling on interested parties to attend a smart-metering conference in Albany next month as regulators try to formulate plans for wide roll-out of advanced meters.

“Advanced Metering, also known as Smart Metering, enables customers to better control their energy costs by allowing them to respond to peak prices through the use of state-of-the-art technology; but it can also do much more,” said Commission Chairman Garry Brown. “We want to push ahead with this critically important initiative. However, we realize that we have more questions to answer in order to get it right. To be successful, a clear and comprehensive understanding of the functions that these sophisticated systems are intended to achieve must be developed before they are installed. This technical conference will bring together experts in the AMI field to help answer outstanding questions.”

Topics for discussion at the April 14 and 15, 2008 conference at the Desmond Hotel and Conference Center, 660 Albany Shaker Road, Albany, will include the following: overview of AMI systems, smart grid systems and their relationship to AMI systems, AMI communication protocols and platforms, meter data access issues, and AMI meter and system capabilities.

Click here for a PSC discussion of advanced metering.

Spreading money around

NYSEG's political action fund, the Energy Action Fund, has contributed $92,000 to campaigns across New York since 1999, according to records maintained by the New York State Board of Elections.

Looking down the list, it appears most of the contributions are below $500, but there are several, including to Republican campaign committees and to past Sptizer campaigns, for more than $1,000.

Some doubt in the market about Iberdrola deal

Energy East is supposed to be bought out by Spanish-based Iberdrola at $28.50 a share at the end of the second quarter. But the markets are not so sure.

Last week, when there were revelations about the increased possibility of Iberdrola itself being a takeover target (see blog entry below) and the failure of Energy East and New York regulators to come to terms on the perceived consumer benefits of the merger, the stock took a dive.

Now Energy East is trading in the $25.50 range , 15 percent below the proposed Iberdrola acquisition price.

That clearly indicates that there is genuine doubt that the merger will take place either at all, or within the time frame originally proposed. It is much more likely the former reason.

ConEd customers get hit with electric rate increase

According to the New York Times, “Residents of New York City will see the biggest one-time increase in their bills for electric service next month, after state regulators approved a $425 million increase in rates for Consolidated Edison on Wednesday. Starting in April, the typical household in the city will pay about $4.25 more each month for the delivery of power by the company, whose string of recent failures has drawn heated criticism from customers and elected officials….”

See the story

Energy East/Iberdrola merger far from certain

Électricité de France SA, one of Europe's largest utilities, is in talks about forming a bidding duo with Actividades de Construcción y Servicios SA, a Spanish construction company. The team would make simultaneous bids for two of Spain's largest utilities -- Iberdrola SA, the country's largest by market value, and Unión Fenosa, the third-largest, according to reports in this morning's Wall Street Journal.

Another factor in the proposed deals is the fate of Iberdrola's $4.5 billion planned acquisition of New York utility Energy East. It has been approved by federal and some state regulators but faces an uncertain future in New York. The deal's failure would make it easier for the Spanish utility to be sold because neither EdF nor ACS is interested in owning a U.S. utility, and regulators in the U.S. might not accept them anyway, the Journal said.

Staff of the New York Public Service Commission have expressed unhappiness with terms of the deal, feeling it provides too little benefit and somewhat greater risk to customers, the Journal said.

Commission staff also worried that the U.S. utilities could become pawns in some larger contest involving Iberdrola and have looked at "ring fencing" as a mechanism to quarantine the regulated utilities from any future financial difficulties of a parent company, said commission spokesman James Denn. A similar structure was created last year when Britain's National Grid PLC acquired KeySpan, another New York utility, he added, the Journal said.

Consumer protections for ESCOs

ESCO: it's an acronym for energy service company. They are the options when a utility customer switches the commodity portion of their bill from the resident utility to an alternate supplier.

New York regulators are considering adopting new consumer service standards for ESCOs.

“Residential consumers are entitled to the same level of protections whether they take service from a competitive energy supplier or a traditional utility,” said Public Service Commission Chairman Garry Brown. “While we welcome and encourage ESCOs to do business in New York, we must ensure that they also offer value to their customers, and that they be good corporate citizens. The issues we are raising for comment are designed to see if the existing system can be improved.”

The new standards are apparently in response to some reports of deceptive marketing practices by some ESCOs.

Here are the new consumer protections being considered by regulators:
· Plain language sales agreements
· An explicit process to resolve ESCO related consumer complaints
· Graduated consequences for ESCO failure to comply with the Universal Business Practices
· Up to 30 day grace periods when the ESCO contract includes a early termination fee
· Standards for telephone and in-person ESCO contacts with customers
· Same language marketing for non-English speaking customers

Read this for more information on the proposal.

To file a comment on this proposal, use this form.

Have you ever had problems with heavy-handed tactics by an ESCO?

$1,000 for utility service

That's what National Grid (NiMo) proposed. It was stuck down by regulators.

See this explanation from the Public Utility Law Project.

Behind the PSC action

The ultimate goal of the PSC action to place more lines on the bill: Encourage more people to shop for electricity

By putting potenttial sales tax savings on the bill, regulators think they can light a fire under people to become more active in the competitive market.

Since just 11 percent of NYSEG residential customer base has switched to an alternate supplier, based on the PSC December stats, they believe that by spelling out potential savings on the bill they can get more people to buy into alternate suppliers. We may see those figures rise when the January report is released at the close of another round of Voice Your Choice.

Reason for separating the billing charge: It's all a part of a strategy regulators have had for more than five years as they attempt to unbundle items in a consumer bill. If there's a potential that someone can produce NYSEG bill cheaper, regulators would like to see that happen.

NYSEG bills will have new features

Here's news from the Public Service Commission that was just released:

Press release translation: Residential customers switching from NYSEG to an alternate supplier can achieve some modest savings in sales tax charges (if their muncipality assesses a sales tax on utility bills) and a 70 cent bill issuance charge that was previously included in the basic service charge.

The verbatim press release follows:

New York, NY—3/19/08—The New York State Public Service Commission (Commission) today ordered that the New York State Electric & Gas Corporation (NYSEG) implement a Price-to-Compare bill notice that will allow customers to make informed decisions about the energy the consumer purchases, and to reduce customer confusion about which energy supply option may be the most advantageous to each customer.

“The Commission has been very actively engaged in making sure that the energy market in New York State is open and competitive and that consumers are provided with a clear understanding of their options when it comes to purchasing energy supplies,” said Commission Chairman Garry Brown. “This decision will further customer choice and the ability of energy service companies, or ESCOs, to participate and rely on a fair competitive market.”

On August 29, 2007, the Commission adopted the terms and conditions of a Joint Proposal for NYSEG’s electric supply service. Among the matters addressed by the Order was a proposal that the company display a Price-to-Compare notice on the bills of customers who receive electric supply from NYSEG, but who are not mandatory hourly pricing customers. The parties to the Joint Proposal agreed to collaborate on the details and implementation of the price-to-compare bill notice.

Under the proposal that has been accepted by the Commission to implement the Price-to-Compare notice, NYSEG will modify its billing system, by March 31, 2008, to include new information, including mention that a consumer could achieve some tax savings if they switch to an ESCO and that, if the ESCO includes its charges on the consumer’s NYSEG bill, the consumer would not have to pay NYSEG’s bill issuance charge. NYSEG will make a Price-to-Compare calculation on a cents per kWh basis on bills for customers who receive supply from NYSEG.

The following parties participated in the collaborative discussion that led to the Commission’s decision: NYSEG; Department of Public Service staff; New York State Consumer Protection Board; Direct Energy Services, LLC; Strategic Energy, LLC; Reliant Energy; Constellation NewEnergy, LLC; Integrys Energy Services, Inc.; Energetix, Inc.; NYSEG Solutions, Inc.; National Energy Marketers Association; Retail Energy Supply Association; Consolidated Edison Company of New York, Inc; Orange and Rockland Utilities, Inc.; and AES Eastern Energy.

The Commission will issue a written order reflecting today’s action. That order, when available, may be obtained from the Commission’s www.dps.state.ny.us Web site by accessing the Commission’s File Room section of the homepage and referencing Case 07-E-0479. Many libraries offer free Internet access. Commission orders may also be obtained from the Commission’s Files Office, 14th floor, Three Empire State Plaza, Albany, NY 12223 (518-474-2500).

The complaint department

Two Energy East utilities - NYSEG and RG&E - led all electric and gas utilities in initial complaint rates, based on data compiled by the Public Service Commission.

RG&E's rate was 15.9 per 100,000 accounts, while NYSEG was at 13.2 per 100,000 accounts. Next highest was Con Ed at 10.8.

The two utilities apparently attended to those complaints in fairly short order. Only a handful of the complaints were eventually categorized as escalated complaints.

To file a complaint with utility regulators, see this form.

Have you ever had to file a consumer complaint against NYSEG?

Migration numbers for residential anemic

Immediately before the latest Voice Your Choice round closed last December 10.2 percent of the NYSEG's residential customers had switched to an alternative supplier - 76,675 residential accounts of a total 751,132 accounts - according to these statistics from the Public Service Commission. These are numbers from Nov. 2007.

Regulators should have a post-Voice Your Choice number available in two months.

However the number of accounts that had switched to an alternative supplier is 55 percent greater than a year earlier.

Residential migration comparisons from other utilities in the state:
Central Hudson Gas & Electric: 1.8 percent
ConEd: 14.3 percent
National Grid: 10.6 percent
Orange Rockland: 27.5 percent
Rochester Gas & Electric: 16.9 percent

Another refund on the way for NYSEG customers

A close reading of the recently filed Energy East annual report indicates that NYSEG customers may be due $67 million in refunds.

Public Service Commission staff is alleging that the company failed to properly compute the amount due to customers in the "earnings sharing mechanism," essentially shortchanging customers on amounts on which they were to share. The issue may date back to as far as 2002.

"NYSEG vigorously disputes the staff's claim."

Here's an explanation of the earnings sharing mechanism as stated by NYSEG:

"Our individual company rate plans are a critical component of our success. While specific provisions may vary among our public utility subsidiaries, our overall strategy includes creating stable rate environments that allow those subsidiaries to earn a fair return while minimizing price increases and sharing achieved savings with customers. "

The amount of the refunds due to customers may be known later this year.

Your bill vs.mine

Received my NYSEG bill for February, and since my billing cycle approximates the month, we can draw some conclusions about the cost of various electric options.

My option: New York Energy Cooperative, Feb. price, including distribution charge and transition credit was: 11.76324 cents per Kwh.

NYSEG variable : 11.0646 cents per kwh, including distribution charge, transition credit and merchant function charge. (See page two of this NYSEG handout for an explanation of merchant function charge.)

NYSEG fixed: 12.55 cents per kwh.

Bottom line for the average home using 600 Kwh/month:

NY Energy Cooperative: $70.58
NYSEG Variable: $66.38
NYSEG Fixed: $75.30

NYSEG variable is the cost savings winner in February, producing a $9.92 savings over the fixed rate.

Energy East and regulators at odds again

Surprise!

Energy and the Public Service Commission have failed in their attempts to settle their differences on issues involving the Iberdrola merger.

According to this release from Energy East, testimony on the issues involved in the merger will begin again on March 17. Read the hearing notice here

It had been hoped that the two parties could find some common ground in private negotiations. That apparently hasn't happened, putting in jeopardy the expected second quarter closing of this $4.6 billion merger.

New York regulators are the last in line for approval. Staff at the PSC contends that there are insufficent customer safeguards and benefits in the proposed merger.

Turn off the lights!!!

Looking for a little advice from my readers. My household wastes tons of electricity by not turning off the lights.

No matter how persistent I am, they leave switches on. The waste isn't as bad as it used to be. I switched all the abused lights to cfls, so there isn't as much waste.

How can I get the kids and wife to turn off the lights? Please help. I am desperate.

Holy wind power, Robin

Rebecca Smith, The Wall Street Journal's respected energy industry reporter, noted in a story today that wind power, while environmentally friendly, gives the distribution system fits.

When the win is blowing, it pumps mega amounts of power into the system. When the wind dies down, grid managers have to scramble to make up for the lost power generation capability.

Smith, in today's story, said wind generation in Texas dropped from 1,700 megawatts in good wind conditions to 300 megawatts when the wind subsided. Result: Electric prices skyrocketed.

Texas grid operators are trying to find a solution to the knotty issue. It may be in better wind forecasting capabilities, say officials that operate the Texas grid.

As people push for the earth friendly alternatives, they should be aware of the serious drawbacks in generation that depends so dearly on Mother Nature.

Read more about wind generation here.

States with most wind ggeneration capacity, according to the WSJ:
Texas: 4,356 megawatts
Calif: 2,439
Minnesota: 1,300
Iowa: 1,273
Washington: 1,163

One megawatt of power is enough to supply about 250 residences.

Electric prices ride a roller coaster

Since Jan. 1, the cost of electricity obtained from NYSEG's variable price plan has been, predictably, up and down. That's the nature of electric prices in the free market.

The highest price was at the start of the year, Jan. 1, when electricity was priced at 12.5916 cents per Kwh. The loweest price: 10.7122 cents per Kwh on Jan. 20.

The average from Jan. 1 to March 5: 11.33808 cents per Kwh.

NYSEG's fixed price: 12.55 cents per Kwh.

How does this compare to your plan?

Lawsuit objecting to Iberdrola merger settled

It seems like some Energy East shareholders were not pleased with the pending $4.6 billion acquisition of the company by Iberdrola. Energy East reveals in an SEC filing dated Feb 29 that it settled a class-action lawsuit that sought to derail the deal.

Plantiffs alleged that Energy East directors breached their fiduciary responsibility, and failed to get a fair price for the company. Energy East denied the allegations.

On Sept. 26, 2007, the suit was settled, with Energy East agreeing to disclose more information that was contained in a proxy statement that was mailed to shareholders. Energy East also agreed to pay the $340,000 in legal fees for the plantiffs.

As an Energy East shareholder, do you think the $28.50 per share price for the company was adaquate?

Energy East negotiating merger settlement with PSC

It appears that Public Service Commission staff and representatives of Iberdrola may be engaged in some quiet negotiations to solve the differences that are preventing the regulatory commission from approving the $4.6 billion merger of the two.

An administrative court judge, in a filing with the PSC, indicates that he is delaying further hearings in the case while Ibderdrola and PSC staff negotiate a settlement.

The PSC objects to the terms of the merger because it says there are insufficient protections for the customer.

NYSEG sees a ghost from the past

A NYSEG former human resource manager who has alleged that NYSEG waged a war against the customer has been granted "active party status" in discussions Energy East is having with the regulators to solve the stalemate that has developed with the PSC on approval of the Iberdrola merger.

This comes against the vigorous objections of Energy East.

Corbett claims officials at New York State Electric & Gas Corp. and its parent, Energy East, called an initiative to drive down employee wages and benefits “operation rape and pillage,” and said they wanted to avoid sharing any excess earnings with customers.

NYSEG has labeled the allegations as “baseless and without merit.”

The charges were contained in a four-page statement submitted to the Public Service Commission in 2006 by Corbett, who was NYSEG human resources director until April 2005.

Two people in charge of the company's initiative to trim benefits and salaries were given the nicknames of “shock” and “awe” in a direct reference to the Iraq war, Corbett alleges in his statement. Despite pleas from employees, Corbett said NYSEG refused to divulge the reasons for its actions on wages and benefits to the work force.

Weather outside is frightful

NYSEG and its sister, RG&E, say they are ready for potential problems caused by the expected ice storm this evening.

NYSEG has a pretty decent track record of responding to ice storms and power interruptions caused by severe weather. The utility won kudos from North Country residents for the response to the historic ice storm about a decade ago.

Cut your energy bills

This just in from Cornell Cooperative Extension:

Save Energy Save Dollars workshop will be held on Monday, March 10th, from 6:30-8:30 PM and again on Wed, March 26th, 12-2PM at Cornell Cooperative Extension, 615 Willow Ave., Ithaca. Learn about no-cost and low-cost ways to lower your home energy bills and programs that can help finance energy-efficiency improvements. Each household will also receive a free kit of energy-saving items. The workshop is free, but pre-registration is required to reserve a seat and an Energy Kit. Call CCE- Tompkins at (607) 272-2292.

Full disclosure

I've been getting the electric supply to my home from an energy service company for at least six years.

At the first shopping opportunity, I opted for NYSEG Solutions in a variable-rate plan. In subsequent shopping periods, I switched to ConEd Solutions in a fixed-rate plan. There were months with Con Ed plan when bottom line cost for electricity sunk below 8 cents per Kwh. Reason: NYSEG was giving me a transition credit in excess of 3 cents per Kwh.

Then I switched to NOCO Electric in a fixed-rate plan. I paid for that decision. Not much, but enough. It was a better year to be on a variable rate.

My house now gets its electric supply from the Energy Cooperative of New York in a variable-rate program.

Here are the comparisons for January:

NYSEG fixed for January: 12.55/kwh
NYSEG variable for January: 11.57/Kwh
Energy Cooperative of New York: 11.32 cents/Kwh

Additionally, those who obtain their supply from a company other than NYSEG avoid a 0.22 cent merchant-function charge, an assessment for the cost of obtaining the supply.

Bottom line, a typical customer who selected the NYSEG variable plan over the fixed-rate plan would have saved $5.82 in January. A customer who used the Energy Cooperative variable rate would have saved $8.60 for the month.

Variable subscribers come out ahead in February

Customers who selected the NYSEG variable-rate plan over the fixed-rate came out ahead by about a penny and a half through most of February, according to figures published by NYSEG.

That means that an average homeowner, using about 600 Kwh of electricity, saved about $9 this month if he had selected the variable rate over the fixed rate.

Variable: 11.062 cents per Kwh in Feb. Fixed: 12.55 per Kwh in Feb.

The February variable rate of 11.06 compares to an average of 11.57 in January.

You can still switch your supplier if you're dissastisfied. The PSC publishes the latest rates, and then go to pressconnects for an explanation of how to make those calculations.

Warning: There may be a penalty for switching if you have a fixed-rate plan from an energy service company. There is no penalty for switching out of NYSEG's fixed-rate plan.

It’s been two months since you made your selection. Are you satisfied that you made the right choice?

NYSEG natural gas supply prices 8.9% higher in March

NYSEG posted March rates for natural gas supplies in its service territories. In the Binghamton region, the supply price went to 99.18 cents per therm, up 8.9 percent from the February price. That doesn't include the 3.71 cents per therm price for the merchant function charge, a levy that the regulatory agency allows NYSEG to charge to cover the cost of securing supply.

NYSEG customers can shop for natural gas supplies, though the deals are few and far between. Customers who select an alternative supplier will avoid the 3.71 cents per therm merchant function charge. Customers are going to pay a steep premium for fixed-rates on natural gas supplies as suppliers seek to hedge against the possibility of a price spike.