In December 2016, FirstEnergy Corp. (FE), parent company of FirstEnergy Solutions (their competitive electric sales business), announced several developments that advance the company’s strategy of becoming a fully “regulated” entity.

On February 22, 2017, FE held its 4Q 2016 earnings call and provided the following information:

    •    FE plans to exit competitive operations (electric supply) by mid-2018.
    •    Could include legislative or regulatory solutions, asset sales and/or plant deactivations, alternatives for FE’s retail business, and financial restructuring.
    •    Exploring possibility of engaging with creditors to restructure debt at FES and possibly     seeking bankruptcy protection at FES and potentially FENOC.

Following the call, John Funk, The Cleveland Plain Dealer, wrote, “FirstEnergy made it clear Wednesday that it is leaving the competitive power plant business, closing or selling all its plants, by the middle of next year.”

As of now, FirstEnergy has two likely options:

    •    Declare Bankruptcy - If this occurs, all customers supplied by FE will have their contracts voided. In this case, customers will be put on a monthly plan with the local distributor, until they sign with a supplier. It is important to note that these monthly rates are historically 10-40% higher than fixed rates. 
    •    FE Could Sell Their Supply Contracts - In this scenario the results can be unclear. FE customers will be at the discretion of the new supplier. This supplier will either allow the FE customer to complete their designated term on their previous contract, or be subject to change based on the new suppliers terms and conditions. 

Be proactive, look to at locking in a future electric rates.  If you are currently receiving electric supply from FirstEnergy Solutions, please contact your BDD, Jim Cunningham, or KOREnergy so that we can provide you with prices for your future contract term.

DECEMBER 2016 KORENEWS
   •    MEMBER STORY FEATURING HOPKINS PRINTING
    •    LOOKING AHEAD: WINTER VS ELECTRIC PRICES
    •    WHAT TO DO NEXT?
    •    SAVING PROGRAMS FACTS
    •    DID YOU KNOW?
​

FIRSTENERGY PLANS TO LEAVE THE COMPETITIVE ENERGY MARKET

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How the Printing Industries of Ohio • N.Kentucky can take the mystery out of buying electricity!

JANUARY 2017 korenews
    •    DEMAND RESPONSE RATES CONTINUE TO INCREASE
    •    DR PREMIUMS RECEIVED AND LOST
    •    2016 YEAR IN REVIEW
    •    FREQUENTLY ASKED QUESTIONS
    •    2017 PRINTING INDUSTRIES OF OHIO • N.KENTUCKY PRINT WEEK DATES


Did you know that the Association has an Aggregate Electric Buying Program?  We have partnered with the largest generating company in the country, Exelon and their retail electric supply business, Constellation NewEnergy, to bring an Aggregate Electric Buying Program to the Association’s members.

This partnership began over a year ago and some of the largest electric users in the Association have chosen Constellation as their electric supplier.

During this period, we have learned a number of things concerning the process of choosing a supplier. 
PRICE:
Like most goods and services that you buy for your business, what you pay affects your bottom line.  Buying electric however, has certain nuances which make it more complicated than most other purchases.

There are eight (8) components which go into your final $/kWh price
    1    Energy
    2    Ancillary Services and other ISO Costs
    3    Auction Revenue Rights Credits
    4    Capacity Costs
    5    Transmission Costs
    6    Transmission Loss Credits
    7    Line Loss Costs
    8    FERC Order 745 Costs.

And in your final kWh contract, these components can be: 100% Fixed Full Requirements for the contract term, (you the buyer have NO risk of the price changing during the contract term.  And, your price is the same whatever your daily/monthly kWh electric usage.)

Only partially fixed, not all 8 components of the kWh price are fixed, (you the buyer bear the risk if one or more of those components changes) those changes (increases) would be passed on to you in your monthly bill.So, sounds simple, one way or the other.  I wish it was that easy.  Many competitive electric Suppliers, Brokers and Consultants who may be soliciting your business will tell you the price is fixed.  However, generally that is not the case.

Remember that the Brokers/Consultants who are trying to gain your business work on mostly 100% commission.  They will say whatever they need to convince you to sign a contract.

CONTRACT TERMS
That old saying, the devil is in the details, definitely applies here.  As a printer, generally you don’t buy electricity that often so you generally don’t have much familiarity with an electric supply contract. 

This is where the bait and switch comes in.  A Broker/Consultant has told you their electric price is fixed (no worries)!  You sign the contract.  The monthly invoice goes to your accounts payable department and because it’s a utility bill, they pay it (they have probably never seen the contract/price details).  So, if the price isn’t fixed, additional charges may be passed thru and no one ever really knows.  Either way, since your kWh usage changes every month, the monthly invoice amount from your supplier changes.  (It’s rare that anyone goes back and audits the original $/kWh and contracts.)

USAGE LIMITS
Some electric suppliers have Maximum kWh usage limits in their contracts.  So, their price is only good for a certain amount of daily or monthly usage.  If you exceed that usage criterion, then they have the right to increase your price (at their discretion – no negotiation.)

Almost always, the lowest electric supply price has one or more of the items mentioned above!