IGS is a Ass

Glendale Alert:  IGS is the default supplier under the Aggregation program.  I researched them two or three years ago and published my doubts, based IGS on shennanigans in Massachusetts.  Just now, in analyzing a utility bill for a friend I note IGS is charging $.85 per ccf on the latest bills, about double what "Core Duke" rate is.  Look at your own recent bill and see what IGS is charging you, and report back if the amount is high.  Pass this along to other Glendalians.  My email is babel2@fuse.net.

Core Duke

(I will call Duke Energy "Core Duke" in this and later messages, for reasons which will become obvious. Share this message with your friends on Facebook.)


Glendale people are getting verbal calls from Future Now about natural gas rates. All such verbal solicitations are misleading, implicitly and explicitly.

I would like to see any WRITTEN material.

Until you see something in writing don't sign up. (As you know I have a jaundiced eye on these natural gas marketers in this environment.) Also remember we are basically through the winter heating season. So any long-term contract is crap, even if it is a variable monthly rate tracking Core Duke in some way.

If there is interest I will hold a meeting on the subject, either at the Lyceum or HWB.

I also have in my possession a package offer from Duke Energy RETAIL. Don't do it! (Gut call without studying it.)

Generally natural gas has collapsed. Type in "Spot Natural Gas," and then "WRGT" on Google and scroll down past the oil charts to get to the natural gas chart. Now this chart does not show the necessary slight capacity adder, but you can see that all offers (and Core Duke's rates) should be much lower than they are. And Core Duke itself should be tracking down each month.

Hours of Duke Energy Electric Residential Time of Day Rates

http://www.duke-energy.com/rates/ohio/electric.asp

Duke Time of Day Bill for July 2011 Usage

Smart Metering and Poles

Sometime during the week a subcontractor for Duke Energy knocked on the door wanting to clear brush from a pole so that they could put up a piece of electrical equipment that would enable Duke to read my time-of-day meter wirelessly.

Duke Time of Day Bill for May 2011

Duke Energy Bill For April Usage

Duke Time of Day Bill for March 2011

Duke Energy Bills

http://www.puco.ohio.gov/puco/index.cfm/apples-to-apples/duke-energy-ohio-apples-to-apples-chart/

This finishes the winter heating season and it looks like Duke's natural gas charges do in fact beat the aggregation option, as I predicted.

Reading Today's Duke Energy Bill

First, I am on Time of Day rates.  As an experiment.  Second, remember that Rider FPP includes charges for all kwh, not just on-peak. 

Did Duke Energy Lower November's GCA Natural Gas Rates Too Low?

November's GCA was lowered and then December's GCA was raised this week.  What goes?  With the spot market hovering in the $3 - $4 range for the year, and the futures for December, January and February in the $4 range, and the economy down, why doesn't Duke Energy's GCA reflect some of these low rates as it should? 

The reduction for November was seemingly sound.  The increase for December doesn't seem so.

Opt Out!

Opt Out of the IGS Natural Gas Aggregation program today!!!!

From No Hot Air -- Important

The following article from No Hot Air -- read it.  I will be referring to it for a long time.  We could substitute Duke Energy for "British Gas" and convert "pence" into American dollars, and change "raising gas prices" to "not lowering gas prices more," and substitute Ohio Public Utilities Commission for "Ofgem" and make the same stunning points which this excellent article does.

Why did British Gas raise prices?

Simply put, because they can. Centrica would actually be failing their shareholders if they did not take advantage of the total lack of clarity and knowledgeable regulation provided by Ofgem. I said when SSE raised their prices that any other gas company would have questions to answer to their shareholders if they didn't follow the SSE lead.

The other reason they can is that what is in a gas or electricity price is completely untransparent: Ofgem themselves don't know, and worse, show no interest in knowing.

The cost of service, i.e. what a gas provider pays transporters and meter operators is about 0.9 pence per kWh [England must have a lot of gas-fired electricity] for a domestic user. It varies around the country, but 0.9 is on the high side. Those costs are identical by law. Everyone gets the same price regardless of size.

That leaves the commodity cost of the gas itself.British Gas, as do the other suppliers, tell their customers, and Ofgem who are so clueless that they believe them, that they buy gas 12 months or more in advance.

It beggars belief that a price was settled 12 months ago and carved into stone a year ago. Apart from anything else, it is one of the basic truths of any commodity that spot prices trend lower than futures.

For another thing, the difference between traded and physical volumes is at least 40 to one. That is, the kWh of gas you use today was traded at least forty times before it reaches your meter.

This is how gas is traded in 2010: If it isn't please hire me Mr Centrica, I can really make you some money!

Physical volumes of gas are rarely priced on anything except the spot market as settled daily at a virtual location called the UK National Balancing Point. Almost no gas at all is bought on long term contracts which included a fixed price.

How do we know this? Its no secret. The UK gas market has multiple traders. Centrica is only one, with financial houses like JP Morgan, Barclays Capital and Goldman active although they don't supply anyone. There are producers and utilities from all over the world active in the UK spot market.

But Ofgem, when it investigates gas prices at all, is unaware of those changes. It believes whatever suppliers tell them. There has never been a full analysis of what costs the suppliers actually incur. Why not? Because Ofgem doesn't think it necessary. So they take everything on trust. Imagine if banks were regulated this way!

When a utility buys gas, it agrees the physical volumes, within tolerances, but the price is not set until the gas is delivered to the NBP, which is on the day of actual use.

The NBP market, as we see above is very volatile. The figures on the chart come from the National Grid over the last six months. Price last winter averaged 1.229 [remember, not dollars] and only averaged 1.29 in January , the coldest month in 33 years.

The gas market is volatile because it matches supply and demand, both equally volatile. The market settles each day. Basically a supplier has to balance. They can, and often do, put in gas one day that they bought the day before or traded during the actual day. They never, ever, ever, ever buy gas months or years in advance at the price on the wholesale market. They used to, sure. But not any time this century. They may for example buy July 2012, but the month will actually be traded multiple times before the stuff actually shows up. No way Jose are they stuck with the price for July 2012, or February 2011 or next Tuesday which they have to pass on to you.

The price they pay is pretty close to the prices daily on the chart above. What is the average price? It's complicated, as although it looks like September 18 was a cheap gas day, who used much gas on September 18? But the average gas price since May was in the area of 1.4 pence per kWh. Add the cost of service and the average total cost to BG, or any other supplier, was 2.3 ish [remember, this is not dollars]. Anything else is gravy.

It's hard to figure out how much gravy, unless you actually look at your bill. First problem is the tiered pricing. The first 600 or so kWh each quarter are over 6 pence per kWh most places. They are that high since there are fixed costs to serve that are the same for everyone. They should in theory cover most of the 0.9 cost of service. But if one averages out the cheaper units which are in the area of 2.9 most places, we see that at least 25% of your utility bill is pure margin.

This will mystify North American readers. They have a default option denied to UK consumers. The state regulator publishes clear costs of service. The meter is read every month, usually remotely, usually accurately. It isn't rocket science. National Grid own utilities throughout New York and New England for example and manage that no problem.

The commodity cost is also clear, and is based on an agreed formula linked to wholesale spot markets. It can go up, it can go down. It is completely transparent and clear. Unlike here in the UK, where even Ofgem admitted last year that up to a third of gas consumers who use switching sites "inadvertently" switched to a higher rate.

UK consumers: go to one of those switching sites that run endless moronic TV commercials. Note that they do not exist in other countries. Eighty five percent of New York State consumers and over 95% in a very cold Chicago, remain with their local supplier. Despite it being so easy to switch that it can happen the next day, and not six weeks later as in the UK.

The UK should have a basic, transparent and fair pricing structure. It doesn't. And Ofgem cost the nation billions during a downturn by being asleep.

To the civilians visiting now in light of the BG news. One piece of advice that switching sites won't ever tell you: Don't fix for anything more than the year you are forced to.

Duke Energy"s Strategy for Purchasing Natural Gas for its Customers

[ed. note:  Not sure of the date of this presentation.]

http://192.234.128.11/pdfs/Gasstrategy.pdf 

IGS Will Not Save You Money -- Channel 9

http://www.wcpo.com/dpp/money/consumer/dont_waste_your_money/igs-gas-vs-duke%3A-which-is-cheaper%3F

Written December 22, 2008 for City-Data: The 3:1 Principle

I have two properties in Glendale, a suburb of Cincinnati. Live in one and have been trying to sell the other. 885 Greenville, [sold June 2009] an old insulated Victorian, where we used to live, heats about 3200 sq ft with three newish furnaces. When in full use on a normal winter I used 280 cu ft/month for the five winter months.  In our present home, a brick ranch two blocks away, we use about the same although the sq footage heated is about 2800. [much lower average use now -- maybe 200 cu ft/month -- after more insulation and more spot heating]


I have a blog which really goes into this topic of average usage during the winter months, http://www.natgagu.blogspot.com/.

What is neat and simple, is that my ratios for both houses are as follows [when the cost was an even $1 per ccf; it'll be $.75, or even $.65 per ccf this winter of 2010-11]:

Go outdoors. If the avg. temp for the day is, like today, [December 22, 2008], 10, then I subtract 10 from 65 degrees, getting 55 "heating degree-days," a recognized term by the experts. Then I simply divide by 3 to get my cost per day per house. So today my cost for each house is $18 per house. [at 2010 prices this would be $13.50 per house] Wow. Sorry I went into this.

Will be cold again tonight but warming thereafter into the 50's.

Click on "heating degree days" and "ebills" in http://www.natgagu.blogspot.com/ for more than you want to know about this topic. Also my very early posts on the http://www.natgagu.blogspot.com/ blog give the normal heating degree days by day for all the winter months, to be used for projecting the upcoming winter months. This used to be readily-available at the Weather Service but it is not now without paying [a small sum] for it. But it is a stable chart for Cincinnati, so it's valuable until they run another 30-year period.

Read more: http://www.city-data.com/forum/cincinnati/518177-home-heating-duke-energy.html#ixzz12RG6t4KJ

IGS Natural Gas Offer vs Staying With Duke Energy

See page three of the following:

http://www.pickocc.org/publications/natural_gas/Comparing_Your_Energy_Choices_DUKE.pdf

Duke Energy Historic Natural Gas Rates

http://www.pickocc.org/publications/natural_gas/Historical_GCR_rates_Duke.pdf

August Duke Energy Bill for 970 Laurel Avenue

http://www.dispatch.com/live/content/business/stories/2010/10/03/a-warm-thought-natural-gas-cost-likely-to-stay-low-in-2011.html