Posted on: 06-28-2011 at 3:45pm
Thanks to the advent of energy deregulation, Stream Energy and Ignite were founded to deliver energy services and a unique business opportunity to Texas, Maryland, Georgia and Pennsylvania residents and business owners. The opportunity has led to competitive energy service rates and unlimited income potential for Ignite Independent Associates along with numerous recognitions.
Across the United States, more and more states are deregulating their energy markets. What does this mean for the consumer? It means that more companies can now offer you energy service in places such as Maryland, Texas, Georgia and Pennsylvania. Many energy markets are no longer dominated by huge corporations that can charge anything they want because no one else has been allowed to sell energy at competitive rates.
The deregulation of energy has created the opportunity for companies such as Stream Energy to offer customers many options and plans to choose from when selecting their energy services. Before deregulation, people usually only had one or two companies from whom they could receive energy service. Thanks to deregulation, however, more choices for consumers equal more competitive rates for consumers.
Stream Energy has earned a name for itself by being recognized by Direct Selling News as the largest direct seller of energy in the world for 2010, as well as being named a finalist for the Platts Global Energy Awards multiple times, along with many other honors.
Deregulation of energy has offered the opportunity to many entrepreneurs to build energy network marketing companies such as Stream Energy / Ignite. Energy network marketing companies pass the opportunity to you, the consumer, which gives you the ability to generate extra income by reselling deregulated energy to friends and family. This is a great opportunity for consumers who live in Texas, Georgia, Maryland and Pennsylvania to choose who they want to receive competitive energy rates from and make additional income.
Posted on: 06-22-2011 at 10:03am
By Stream Energy Director of Market Research Mike Rowley
Will electricity costs go up because of the Smart Grids?
I look at three issues when I think of electricity cost to the consumer:
- Fuel Cost – the cost of the fuel to run the generator.
- Power Plant Efficiency – this is rated in how many BTUs (quantity of fuel used) it takes to created a single kWh of electricity; the term is “heat rate”. Our aging fleet of power plants has heat rates of about 6,000 to 14,000, with 14,000 being the least efficient.
- Infrastructure capital costs – This is the cost of building and maintaining the needed power plants and power lines to handle the demand of the customers, which is steadily growing. And, even if it was not growing, we need to build power plants to be able to retire the oldest inefficient plants, and to replace the polluting power plants with renewable energy power plants.
The cost to customers for the energy portion of their electricity is represented in the following equation:
- Fuel Cost times Heat Rate, plus
- the payback capital cost and maintenance of the infrastructure, plus
- a reasonable profit margin for the supplier
The Smart Grid will allow consumers the to cut back on usage at critical times, which means that we do not need to build as many power plants for the future; the industry term is called peak shaving. That alone will promote a more efficient use of the assets which will equate to the lowest cost of operation. Also, society is calling for more renewable energy generators that have little or no fuel costs, but huge infrastructure costs to replace the most polluting generators as well as the least efficient power plants that have come to the end of the useful lives. This combination of better control and more efficient power plants could easily be less of a financial burden than operating the existing system of plants and power lines.
With all that said, I would guess that just the efficiency factors that come from a Smart Grid will keep costs down. As to the electricity bill of the average customer going down, I would say that with the efficiencies of the grid that will be coming because of Smart technology, and the fact that with the better usage data that the average customer has at his/her disposal that allows a personal conservation program to be instituted for each home, there is no reason that we should expect the cost per residence to ever rise, even if fossil fuel costs (which will become less and less a part of the fuel mix for generating electricity) do rise.
Posted on: 06-16-2011 at 2:46pm
By Senior Director of Communications Paul Thies
Stream Energy, the largest network marketer of energy in the world, is taking the next step in our ongoing commitment to Captain Hope’s Kids, a charitable organization which meets the critical needs of homeless children.
As previously announced, we have launched an online webpage that allows our friends to make a direct donation to this worthy charity, as part of our campaign called “A Big Difference Starts Small.”
Participation is very easy. Simply visit the online webpage where you can elect to make a charitable donation in the amount of your choosing.
“We are very proud to draw deserved attention to Captain Hope’s Kids, which in 2009 touched the lives of 32,000 children from homeless families,” said Stream Energy Chairman Rob Snyder. “Families with children make up 47 percent of the homeless population in the Dallas metropolitan area. Captain Hope’s Kids provides needed goods and services to these unfortunates – and Stream Energy is going to help.”
Posted on: 06-15-2011 at 11:32am
Award Winning Customer Service from Stream Energy, providing customers in Texas, Georgia, Pennsylvania and Maryland with deregulated energy services
Stream Energy, a deregulated energy services provider founded by chairman Rob Snyder, serves customers in Texas, Georgia, Pennsylvania and Maryland and has been recognized for its outstanding customer service.
Stream Energy currently offers deregulated energy to four states. One of the reasons for its success is its nearly impeccable customer care and service. The company is easy to reach if you ever have a question about its services, or your bill, or just for information.
At Stream Energy, the goal is to make sure that customers are treated with the utmost care and provided with world-class service. The company’s webpage offers a facts and questions section, how to contact Stream Energy in an emergency, payment options and questions and answers about energy services offered.
Stream Energy’s Customer Service is always polite, professional and knowledgeable. The company puts a premium on service, because it understands who the boss is – namely, you, the customer.
The company prides itself on a staff of great listeners who take the time to identify what the customer needs by asking the right questions and listening to the answers. Stream Energy’s customers receive undivided attention and are greatly appreciated.
If a customer needs systems explained, Stream Energy will explain it. The company will not direct you to another site. It wants all the customers to understand what they are receiving from Stream Energy.
Additionally, the company says “yes” as often as possible. It is always looking for ways to help customers. When you have a request, Stream Energy will do everything in its power to honor that request and come up with a fair resolution.
At Stream Energy, customers are the number one priority. The company is an award-winning team who intends on continuing to improve in all areas.
Posted on: 06-08-2011 at 1:55pm
By Stream Energy Director of Market Research Mike Rowley
A prevailing issue in the move from regulatory compact to competition is overcoming the paranoia of losing reliability without all of the regulation-required redundancy that is built into our electricity grid operations. As long as electricity consumers see our product as being in the same class as air and water, they will be willing to pay for 99.9999% reliability. But with near real-time energy markets, the need for ancillary service capacity markets will dwindle, and I predict that other than the ever-present need for the “regulation” capacity market, and the ability to buy energy-only products in near real-time, the responsive and non-spinning reserve markets will be done away with.
Second point, ERCOT showed in the extreme freeze of 2011, that the current system works like clockwork. ERCOT should be lauded for its success in maintaining grid reliability by using rolling black outs. The cost of being any more reliable, not just in ERCOT but in any region, would quickly reach the point of diminishing returns and cost consumers billions more than the current system.
Now, there is a marked difference in how Stream Energy currently does business in Texas and in the Northeast. In Texas, Stream Energy does the billing in a manner called Supplier Consolidated Billing, where Stream has possession of the customer relationship via the bill and a large portion of the customer contacts.
– 65% Smart Meters, 100% by 2013
– ERCOT settles Imbalance Market with Suppliers based on Load Profiles, settlement process disconnect from smart meter data
– Supplier Consolidated Billing Model
In the Northeast we are privileged to be a virtual subcontractor to the incumbent utilities, while they maintain the billing and usually the first contact with the customer on most issues that require the customer to ask a question. Some retail electricity providers are very satisfied with this process because it simplifies their life and places issues like credit management and bad debt as minor or non-existent issues.
I do not see the long-term benefits of a utility consolidated billing model outweighing the risks. It is imperative to maintain the customer relationship through the billing and customer service channels in order to become the “lifestyle products” vendor in the future.
– 95% Smart Meters
– Smart Meter Actual Use Data used for determining supplier’s exposure to the PJM Imbalance Market
– Utility Consolidated Billing Model, Supplier loss of contact hinders customer relationship
Currently, there are operational disconnects in both Texas and the Northeast that must be overcome to allow AMI/AMR to become a driving force in the creation of an efficient smart grid.
In Texas, our imbalance market is settled using by ERCOT-generated customer profiles and not the reality of our customer’s real-time energy usage. 99.999% of the time, in a steady-state environment, the error generated using this method is acceptable; but a few of our smaller retail electric providers had issue with this process in the massive freeze ERCOT experienced in 2011.
One retailer in South Texas saw a huge number of power outages for its customers – they were not consuming power at all; some even had empirical data from smart meters that verified their non use. But ERCOT’s profile-driven process stated that there was consumption in every 15-minute settlement period of all the settlement periods where the empirical data showed no usage.
On top of that issue, 1) the ERCOT weather-adjusted profiles showed excess usage over and above the supply hedges the retailer had in place, and 2) the imbalance market clearing price was pegged at the maximum of $3000 per MWh. So, that retailer paid a premium for energy that was not actually consumed, instead of being compensated for the difference between the supplier’s actual load, which was lower, than its scheduled load.
Lower Prices and Innovative Products
As for deregulation and lower prices, with the assistance of a former PUCT manager turned consultant, I was able to piece together this slide. The question for Stream’s Chairman Rob Snyder from the Dallas Morning News on a panel of experts which included PUCT Chairman Barry Smitherman was, “Has the ERCOT region of Texas seen a drop in residential electricity prices since state-mandated deregulation occurred in 2001?”
|Inflation 2001 to 2009
| 2001 actual TXU Rate before deregulation
| TXU actual 2001 rate adjusted for 9 years of inflation
| TXU’s 2001 rate with fuel cost adjustment reflecting 2009 $6 gas market
| TXU 2001 rate reflecting 2009 $6 gas market adjusted for 8 years of inflation
| 2009 Actual TXU Rate (Product: Fixed Rate12 month with ETF)
As you can see, we needed to take into account two things in our conversion: 1) the cost of Natural Gas, which is the fuel source for electricity at the margin 100% of the time in Texas; and 2) the Consumers Price Index stating actual inflation over those 8 years. The answer is a resounding “YES.”
And if you look at 2011 data, you can see gas prices have gone down, inflation has gone up and we have seen another 10% decline in the electricity rate TXU Energy currently offers.
May 2011 TXU Published Rate
- 10.2 Cents per kWh
- January 2010 to March 2011 Average Inflation Rate = 1.83%
- Natural Gas Price $4.30
I use TXU Energy data because they still serve three million residential meters. If a consumer is willing to do some research, they can find more and differing products at lower costs from reputable suppliers.
The original question was, “Has deregulation lived up to its promise of lower prices and innovative products?” I believe that the inefficiencies that the regulatory compact has perpetuated have been squeezed out of the deregulated markets (with market power issues being the remaining issue) and that the “still regulated” markets are taking notice and doing their best to eliminate the inefficiencies in order to stave off being deregulated.
Has deregulation offered innovative products? I think yes, mostly in the renewable offerings and payment options. Now, look at telecom! 20 years ago (1991) I was paying about $25 a month for all of my telecom services and long-distance calls were an additional incremental charge. Today, my monthly telecom costs exceed $175 a month, but the innovations that I have the choice of using are astronomical and almost unbelievable to a 1991 mind. As for the future of electricity, to quote Frank Sinatra, “The best is yet to come … we ain’t seen nuthin’ yet.”
Lastly, the fate of the DR Companies
The DR companies that have sprung up all over North America are taking advantage of the ability to aggregate customers into blocks of negawatts (thank you, Jim Rogers, for such a descriptive term) that are bid into the capacity and imbalance energy markets of the ISOs. I personally believe that these companies are “stop-gap” entities that are taking advantage of the limitations of the DR marketplace where, even with smart meters, customers cannot directly participate in the selling of their negawatts.
With the advent of a fluid and unconstrained DR market where every entity is a participant, as described in Dr. Cazalet’s white paper, the need for aggregators of negawatts will disappear, energy suppliers or “lifestyle products” suppliers will develop their own methods of assisting/aggregating their customers in taking advantage of DR markets. The best move I have seen in the DR Company environment is when Constellation purchased CPower in anticipation of the future needs of even their smallest customers, of which they just collected 650,000 more with the announcement of the purchase of MX Energy and StarTex Energy.
As kind of an afterthought, because I read something interesting in Restructuring Today recently …
Jim Rogers, CEO of Duke Energy, again introduced a new term into the industry’s vocabulary - DISINTERMEDIATION. It’s a term that has been used in financial circles for a while, and when I broke the word down, I discovered it means “no bilateral problem solving.”
Jim pointed out that if DR market participation and conservation by the consumer is done without the suppliers cooperation or coordination, there may be issues as to long-term planning and real-time load following, as well.
At first blush, I think Jim has something here; but, my second thought is that conservation and DR market activity would follow the same patterns, based on economics, whether the supplier manages the customer or a 3rd party manages the customer. I think those patterns could easily be deciphered and planned for.
My colleagues at Stream Energy asked me two great questions, based on the fact that the Smart Grid will allow all participants to transact, and that the credit issues will be extremely manageable, if not virtually eliminated.
Question #1: Is it feasible that the DR companies could actually evolve into a supply-side entity the size of an NRG or Calpine?
Answer: Again, in reference to what the Constellation/Excelon move of incorporating a DR company into their operation, I personally believe that my sector, the retail electricity providers, will incorporate DR services into our offerings and use our relationship with our customers to eliminate the need for the customer to use a separate entity for DR. I also believe that when the ability exists that a homeowner can place a bid into a market bid stack on his own, a certain percentage of consumers will bypass all service companies and do it for themselves, bypassing even their trusted electricity supplier. However, I perceive that the total customers that play the DR markets, in the future, will never exceed 10% of the market.
Question #2: Could the demand-side entities, like homeowner associations, municipal aggregators or even consumer protection groups, become the agent buyers of a huge magnitude?
Answer: NO! The credit issues that will be mitigated in the future are the supplier’s exposure to bad debt. A supplier still has the same credit issues on the wholesale side of the house at to hedging supply for customers on long-term contracts. Besides, as municipal aggregators have experienced, there is no loyalty to their “cause” and every state that has adopted municipal aggregation has legislated that the customer can opt-out at any time with no penalty. Municipal aggregators may still be around, but I believe that the homeowner’s association would be less knowledgeable and successful in operating this kind of aggregation and the consumer protection entity would not see this as a core competency.