Welcome!

News Feed Item

The Biggest Lesson of the Winter Polar Vortex: Supplier Transparency Is Key

ConEdison Solutions' White Paper Says Users Must Understand How Risks Are Shared With Their Supplier

VALHALLA, NY--(Marketwired - July 21, 2014) - The history-making 2013-2014 Winter Polar Vortex dramatically demonstrated the importance of energy supplier transparency, according to a White Paper issued by ConEdison Solutions, one of the country's largest energy services companies.

With both demand and prices reaching record highs, the report -- titled "The 2013-2014 Winter Polar Vortex: What Happened, Why Prices Spiked, and How Consumers Have Been Impacted" -- stresses that users need to fully understand the energy supply products they are purchasing, and also need to be aware of the way that risk is being shared between customer and supplier.

"The unexpected extremes of the Polar Vortex reminded us that energy users need to be vigilant," said Richard Rathvon, Vice President at ConEdison Solutions. "Customers should always make educated decisions when purchasing their energy supply. In a marketplace that often defies prediction, the energy consumer needs to fully comprehend the range of risks and benefits that may be associated with the contracts they sign."

According to the White Paper, the most-powerful contributors to last winter's high prices were pipeline constraints that elevated the cost of transporting natural gas to electric generators in the Northeast and Mid-Atlantic. In addition, spikes in electricity consumption at the same time exacerbated the impact. At one point in January, spot gas prices, which are a main driver of electricity prices, at a New England transmission connection reached 878 percent higher than the 12-month average.

And the trend may continue. Industry observers, the White Paper notes, say the region is "likely to experience high prices over the next few winters as well, with structural relief at least a few years away." 

The dramatically cold weather also posed repeated threats to grid reliability. The PJM Interconnection, serving more than 60 million electricity consumers in 13 states, issued a series of warnings and requests for curtailment in January. 

Amid the price turmoil, customers who had locked in to "true" fixed-price contracts experienced no impact to their unit price. In contrast, users not locked into a fixed price contract but who instead had purchased variable, market-based products, saw major increases in their bills last winter. 

The White Paper notes, however, that some so-called fixed-price contracts were ultimately no guarantee of price stability for some customers. 

A few suppliers, having failed to purchase product beforehand in a way that would allow them to sustain the fixed prices they had offered, went out of business when record-setting wintertime costs took hold. Their now-abandoned customers, dropped back to utility default service, were often then forced to pay prices exceeding the "fixed" price they had originally budgeted for.

In addition, many ostensibly "fixed-price" agreements in reality require users to bear substantial pass-through costs. Many non-energy components of an electricity price, such as capacity and transmission costs, Mr. Rathvon said, now comprise a growing proportion of total electricity cost, and these cost components are often unexpectedly passed through to customers.

"Customers need to be fully educated," said Mr. Rathvon. "They must review their contracts carefully to differentiate costs that are truly fixed from those that may be passed through and know how the supplier has interpreted key contract language in the past. Energy users need to match the contract being offered to their own risk profile, and have an understanding of the market's current and recent price environment."

"The Winter Polar Vortex reminded us that the smartest energy user leaves as little as possible to chance. In a market like this, customers should be fully informed about how fixed their 'fixed' price is, about risks associated with variable-price products, and about their supplier's financial stability."

About ConEdison Solutions

ConEdison Solutions is a leading energy services company that provides competitive power supply, renewable energy, sustainability services, cost-effective energy efficiency solutions, and performance contracting services for commercial, industrial, residential and government customers, including universities, public school districts, and hospitals nationwide. Offering innovative products, financial stability, and a commitment to customer service, the company is based in Valhalla, New York, with offices in Burlington, Massachusetts; Cherry Hill, New Jersey; Chicago, Illinois; Falls Church, Virginia; Houston, Texas; Tampa, Florida; and Overland Park, Kansas. The firm's dedicated team of energy professionals delivers a broad range of energy solutions. ConEdison Solutions offers programs and services designed to help customers achieve their individual energy objectives and is accredited as an Energy Services Provider (ESP) by the National Association of Energy Service Companies (NAESCO).

ConEdison Solutions is a subsidiary and registered trademark of Consolidated Edison, Inc. (NYSE: ED). More information can be obtained by calling 1-888-210-8899 or visiting the ConEdison Solutions website at www.conedsolutions.com. You can also visit the Consolidated Edison, Inc. website at http://investor.conedison.com for information on all of the Consolidated Edison companies.

Follow us on twitter | Become a Fan on facebook

Media Contacts: 
Christine Nevin 
ConEdison Solutions
(914) 286-7094
[email protected] 

Steve Vitoff
The Marino Organization
(212) 889-0808
[email protected] 

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of the 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to gre...
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develop...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...
"Infoblox does DNS, DHCP and IP address management for not only enterprise networks but cloud networks as well. Customers are looking for a single platform that can extend not only in their private enterprise environment but private cloud, public cloud, tracking all the IP space and everything that is going on in that environment," explained Steve Salo, Principal Systems Engineer at Infoblox, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventio...