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Tag: Electricity Rates

  • Power Wizard in The News

    This story came out back in 2019, but we’re still mistaken for “Power Wizard.” Wizard Energy is NOT Power Wizard. Nonetheless, we do work hard to help people save big money on their electric bills! We’ve been at this for nearly 20 years and are proud of the reputation we’ve developed. Our work is based on honesty, integrity, and impartiality in dealing with electricity companies to get our customers the lowest electric rate to lower your electricity bills.

    We’re an INDEPENDENT energy broker that forces large electricity companies to bid on YOUR BUSINESS in order to get you the BEST POSSIBLE ELECTRIC RATE no matter what!

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    Here is the article that was in the Houston Chronicle…

    Power Wizard, a new electricity shopping website in Houston, promotes itself as an independent voice on the side of consumers looking for low cost plans, providing unbiased advice to shoppers because Power Wizard has no ties with retail electric providers.

    Except it does.

    Power Wizard is owned by NextEra Energy, the nation’s biggest utility company, which also owns two retail electric providers in Houston, Frontier Utilities and Gexa Energy, according to registration records on file with the Texas Secretary of State and other public records. The chief executive officer of Power Wizard, Brian Landrum, is also president of Gexa, according to public records.

    “It doesn’t sound very unbiased to me,” said Fred Anders, founder of Texas Power Guide in Houston, a website that helps consumers find the cheapest power plans.

    Power Wizard, which was launched in February, is one of a growing number of concierge-like services in Texas that promise to find the best retail power deals for consumers. The growth in the industry reflects the confusion many Texas consumers face while shopping for power as they wade through gift card offers, free nights and weekend promotions, multi-tiered rates that change based on the number of kilowatt hours used and electricity brokers who promise they can find the best deals. Power Wizard also offers an on-going bill management service for $8 per month.

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    Power Wizard says on its website that it will navigate electricity buying for its customers as a “totally unbiased” partner. “We don’t have any alliances, relationships, or partnerships with any REPs,” referring to retail electric providers, according to Power Wizard.

    But the address Power Wizard uses with the Texas Secretary of State is the same address of Florida Power & Light, another electricity company owned by NextEra Energy, according to the registration statement Power Wizard filed in February with the Texas Secretary of State.

    All eight executives of Power Wizard work for NextEra, including five who list Florida Power & Light’s address in Juno Beach, Fla. as their business address, according to Power Wizard’s broker application to the Texas Public Utility Commission. Three of the executives, including Power Wizard’s CEO, chief financial offer and assistant vice president of regulatory affairs list NextEra or Gexa addresses in Houston on the registration form Power Wizard filed in August.

    Gexa spokeswoman Ashley DePaolo said that Power Wizard is an affiliate of NextEra, but operates independently of other NextEra business units, including the retail operations of Gexa and Frontier. Power Wizard is not influenced by any retail energy provider or energy broker, regardless of ownership, she said.

    But after being contacted by the Houston Chronicle, Power Wizard removed the claims from its website that it has no ties with retail electric providers.

    As to whether Power Wizard puts customers in Gexa or Frontier plans, DePaolo would not say. PowerWizard selects the best electricity plan on behalf of its members regardless of the retail energy provider, she said.

    Electricity brokers have largely escaped scrutiny in Texas, but a law enacted during the most recent legislative session requires brokers to register with the commission and comply with consumer protection rules and marketing guidelines. The registration deadline was Sept. 1 and about 1,000 brokers have signed up, according to commission records.

    The commission has proposed new regulations for brokers and asked for comments, which will be incorporated into a new rule that will oversee electricity brokers.

  • Why Gasoline, Heating Gas & Electricity Are Going Up

    The U.S. Consumer Price Index was up 7.5% in January… This is a 40-year record!

    You need look no further than the gas pump or your utility bill to witness a punishing run-up in energy prices.

    Motor fuel costs — mirroring a surge in oil prices — are at heights not seen since 2014. Heating bills are bloated. Electricity prices are rising.

    Energy prices always are inherently volatile. That’s why the federal government breaks them out — along with food prices — when tabulating “core inflation.” In January, year-over-year core inflation rose 6%, the biggest jump since 1982.

    Including energy and food, the U.S. Consumer Price Index in January increased 7.5% — also a 40-year record. Energy costs have been the biggest pocketbook villain, soaring 27% nationally and 30% in Minnesota in January over a year ago, CPI data shows.

    Q: How high are gasoline prices?

    A: The increase is high, but not quite historically high. On Friday, Minnesota gasoline prices on average were $3.44 per gallon, compared with $3.58 nationally, according to AAA. A year ago, Minnesota prices, which often track below the national average, were $2.62.

    Prices in Minnesota haven’t hit $3.50 per gallon since summer 2014, according to GasBuddy.com, a price tracker. The prices were even higher in 2012 and 2013, with Minnesota gasoline prices hovering between $3.45 and $3.75 for several months — briefly spiking to an all-time nominal high of about $4.25 in May 2013. Adjusted for inflation, notably ugly years for average U.S. gasoline prices, according to InflationData.com, were: 2008 ($3.86 per gallon); 1981 ($3.83); and 1938 and 1934 (both $3.66).

    Q: Why are prices climbing so much?

    A: Gasoline costs are driven mostly by oil prices — which are on fire. Oil cost around $60 a barrel a year ago, before rising steeply in 2021’s second half. West Texas Intermediate (WTI) — the benchmark U.S. crude — traded above $80 a barrel for most of October, before retreating some. But WTI began another ascent in late December; it was around $92 a barrel Friday.

    Oil’s latest surge is powered by the Russian move on Ukraine. War brings uncertainty to commodity markets. Plus, Russia is one of the world’s largest suppliers of oil and natural gas. As western sanctions pile up, “Russia could retaliate by using oil as a weapon,” said Patrick De Haan, GasBuddy.com’s head of petroleum analysis.

    Even before the Ukraine crisis, global oil demand had outstripped supply for months, buoyed by economic recovery from COVID-19. OPEC held the line on oil production. Even U.S. shale oil producers — known for burning up profits by chasing new wells when prices rise — have become disciplined. “They have learned their lesson,” De Haan said.

    Q: How high could gas prices go?

    A: “This isn’t going to get a whole lot better, and it will probably get worse,” De Haan said. “It’s not impossible to hit $4 a gallon in the Twin Cities. It really depends on how bad the Russian situation gets.”

    Q: Why is my heating bill so hefty this winter?

    A: The largest part of your winter bill is the commodity cost of natural gas, which your utility passes down to you with no mark-up. (It’s a state rule.) Natural gas prices have also risen over the past six months as demand has outstripped supply. Plus, record U.S. exports of liquid natural gas have put pressure on domestic supply.

    In January, residential customers of CenterPoint — Minnesota’s largest natural gas supplier — were paying 27% more per therm of gas than a year ago, according to data provided by the company. And commodity gas prices in January had actually fallen from December and November.

    Q: What is the natural gas price outlook?

    A: It’s likely that the Henry Hub price — the benchmark U.S. gas price — will stay above $4 MMBtu for the next few months, said Emily McClain, vice president of North American gas markets for consultancy Rystad Energy. That price has been below $4 for most of the past six years. “But we do see a light at the end of the tunnel,” she said. Supply is ramping up: U.S. gas production — unlike oil output — surpassed its pre-pandemic high late last year. And unlike oil, U.S. natural gas prices are not as influenced by global markets.

    Q: How has the weather affected my gas bill this winter?

    A: It has made matters worse: January and February temperatures in Minnesota have been uncomfortably below normal. Last month, the average CenterPoint customer used 18% more gas than a year earlier.

    Q: Are other charges higher on my gas bill higher this winter?

    A: Yes, but the financial pain here is less than from higher commodity gas costs. The Minnesota Public Utilities Commission (PUC) approved interim rate increases for CenterPoint and Xcel Energy, the state’s second-largest gas supplier, which went into effect Jan. 1. CenterPoint and Xcel’s residential gas rates each rose 3.9%.

    Also, customers of CenterPoint, Xcel and two other investor-owned gas utilities are paying a special “February 2021 weather event” charge (a separate line item on your bill). The charge stems from the “extraordinary” – as the PUC deemed them — $660 million in costs racked up by the utilities during a brutal storm in the southern U.S. last winter.

    Gas fields in Texas and elsewhere — which weren’t weatherized for cold — froze up, sending Midwestern gas prices rocketing over 4,500% at one point. The PUC allowed utilities to begin passing on the extra costs last fall over a roughly two-year period, though it later extended that time to 63 months for all CenterPoint customers and Xcel’s residential customers. The PUC hasn’t decided whether the utilities will be able to recover the entire $660 million.

    Q: What about propane?

    A: Just under 10% of Minnesotans use propane for heat. Propane is derived from gas and oil, so its price also has soared nationally. Residential propane prices in Minnesota last month were up 23% over a year ago, data from the Minnesota Department of Commerce show. Propane users often fill their tanks well before winter. But Minnesota prices have been consistently above $2 per gallon for four months — the only time that’s occurred in the past five years.

    Q: Are electricity costs rising too?

    A: For January, the U.S. Consumer Price Index showed a year-over-year spike in electricity prices of 10.7% — the largest such increase in at least a decade. In Minnesota, the year-over-year January jump in electricity prices was the highest since late 2020. This January’s bill for the average Xcel customer was 7% higher than a year earlier, data provided by the company show. The majority of that stemmed from a 6.4% interim rate hike granted by the PUC to Xcel — by far the state’s largest electricity provider — that went into effect Jan. 1. The addition of a fleet of new wind farms in 2021 also boosted Xcel bills over a year ago, as did higher prices for natural gas — a key fuel for electricity generation.

  • Electricity Prices & Debt Are Rising

    Electric and gas customer accounts 90 days or more past due are now in excess of $500 million, according to the National Consumer Law Center!

    Retail electricity prices in 2021 rose at their fastest rate since 2008, the U.S. Energy Information Association (EIA) said Tuesday. The average nominal price increased 4.3% from 2020 to $0.1372/kWh in 2021, and is expected to reach $0.1426/kWh in this year.

    That $0.1372/kWh price is the “highest on record,” EIA noted, before adding that prices have tended to slowly decline when accounting for inflation.

    There are signs that the increases are weighing on consumers in the waning days of winter. On Tuesday, New York Gov. Kathy Hochul, D, directed the state’s utilities to assist consumers struggling to pay. “The extreme utility bill increases all of us are seeing are having a serious impact on our household budgets, and in response we are taking action,” Hochul said in a statement.

    The grid operator for New England on Tuesday warned colder weather, higher demand and spiking natural gas prices “converged in January to push wholesale electricity prices to their highest levels since February 2014.”

    The rising rates have consumer advocates concerned about growing customer debt and the potential for service shutoffs now that many COVID moratoriums have lapsed.

    There is inconsistent data collection by states on past-due utility accounts, known as customer arrears, but experts say they are rising. “The numbers are going up and it’s only going to get worse,” National Consumer Law Center (NCLC) Senior Policy Analyst John Howat said.

    Inflation

    The cost of natural gas for power generation more than doubled in 2021, accounting for much of the rise in electricity prices, according to EIA. Increased investments in distribution and transmission have also contributed, say experts.

    Customers already struggling with a global pandemic must now also contend with rising energy prices. And with many states dropping disconnection moratoria, the potential impacts of growing arrears could spiral, say experts.

    The National Association of Regulatory Utility Commissioners ceased maintaining a map of disconnection moratoria in 2021, but the last update in September shows a patchwork of mostly expired and voluntary protections.

    “Inflation continues to add insult to injury with COVID,” said Tyson Slocum, director of Public Citizen’s energy program. Rising prices are challenging energy affordability, he said, making it vital for state and federal regulators to focus on protections for low-income consumers.

    “We’re still in the throes of a pandemic and now facing unprecedented levels of price inflation,” Slocum said. “Now is not the time to disconnect people from access to utility service because they can’t afford to pay through, sometimes circumstances beyond their control.”

    Consumer advocates say they need better visibility into arrears and service disconnections in order to understand the scope of the problem, but it is clear that past-due accounts are on the rise.

    The Edison Electric Institute, which represents investor-owned utilities, did not respond to questions regarding rising arrears or the potential for disconnections.

    NCLC works to make existing rate relief programs more accessible to more people, said Howat. The organization also looks for funding for programs and has pressed for states to collect better data on arrearages and disconnections.

    “We need better, more consistent data to really understand what’s going on in the field … to inform the design of programs and policies to address energy insecurity that we’re seeing,” Howat said. “But without data we’re limited in that regard.”

    Billions Overdue

    There is some data, however. Data from investor-owned utilities shows arrearages are on the rise.

    For customers in discount rate programs, combined gas and electric arrearages that are 90 days or more late are now about $222 million, compared with $169 million in March 2020, said Howat. The number peaked at $234 million during August 2021, began to decline but has now starting rising again, he said.

    For general rate customers, arrears 90 days or more past due are now $336 million, up from $218 million in March 2020.

    “So when you add them together, you’ve got [more than] a half a billion dollars in very serious arrears” said Howat.

    “The numbers are going up and it’s only going to get worse,” he added, noting a 2-6 month lag between wholesale price increases and retail bill spikes.

    “On the electric side, while there may be a slight lag in the pass-through of increased wholesale market prices to retail customers, we know the hammer is coming down and there will be suffering and there will be increased disconnections, and we’ll see more and more households forgoing necessities,” Howat said.

    Large electric utilities offer a variety of payment assistance options for customers struggling to pay, including budget billing and programs to help lower monthly bills or reduce past due balances. And the utility said there are a variety of restrictions on utility disconnections in place.

    We went into this winter with the price of natural gas about 20% higher than last winter due to an increase in demand and extreme weather in gas-producing states in the U.S. that further constrained supply. As approximately half of the region’s electricity is generated using natural gas, there will be an increase in electricity costs as well.

    Gas Prices Drive Up Customer Bills

    EIA data shows the cost of natural gas delivered to U.S. power plants in 2021 averaged $4.98/MMBtu — more than twice the 2020 average of $2.32/MMBtu.

    The American Public Power Association (APPA) says its members have seen “some small growth in rates for the last several years.” A sample of rates showed increases of about 2% in 2021, the group said.

    The rising cost of fuels is definitely a factor, said APPA Director of Policy Research and Analysis Paul Zummo. But rising distribution and transmission costs are also a factor.

    “We’re seeing some increases in transmission costs in the [regional transmission organization] and [independent system operator] markets, and so that’s factoring into these increased electric rates over the last several years,” Zummo said.

    Public Citizen’s Slocum agreed that rising distribution and transmission costs are a factor.

    “I know the popular narrative is we don’t invest in transmission and we don’t invest in reliability, but actually utilities do,” Slocum said. “There are constant transmission upgrades. Some of this is affected by increased storm activity and some of it is more routine, but you know, it is a big driver of the retail price increases.”

    More Pain Ahead

    There may not be much immediate relief for consumers, according to David Springe, executive director of the National Association of State Utility Consumer Advocates.

    “I can’t say I’ve heard much from the membership about shutoffs and arrearages being incrementally worse due to recent electricity price increases,” Springe said in an email. “But, given the extremely high level of arrearages from COVID, and the post[-]pandemic shut-offs where moratoriums have been lifted, any incremental increase in shut-offs may just be masked.”

    Springe said that right now he is more concerned with high residential gas bills over this winter, and how those impacts will play out in the months ahead.

    “Going into winter, most utilities were increasing the gas portion of the heating bill substantially. I think in New Hampshire it was a 70% increase,” Springe said. “I don’t know that we’ve seen the arrearage and shutoff impact from those bills yet, since it’s still winter. It could be a difficult spring.”