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

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
The IETF draft standard for M2M certificates is a security solution specifically designed for the demanding needs of IoT/M2M applications. In his session at @ThingsExpo, Brian Romansky, VP of Strategic Technology at TrustPoint Innovation, will explain how M2M certificates can efficiently enable confidentiality, integrity, and authenticity on highly constrained devices.
Increasing IoT connectivity is forcing enterprises to find elegant solutions to organize and visualize all incoming data from these connected devices with re-configurable dashboard widgets to effectively allow rapid decision-making for everything from immediate actions in tactical situations to strategic analysis and reporting. In his session at 18th Cloud Expo, Shikhir Singh, Senior Developer Relations Manager at Sencha, will discuss how to create HTML5 dashboards that interact with IoT devic...
We're entering the post-smartphone era, where wearable gadgets from watches and fitness bands to glasses and health aids will power the next technological revolution. With mass adoption of wearable devices comes a new data ecosystem that must be protected. Wearables open new pathways that facilitate the tracking, sharing and storing of consumers’ personal health, location and daily activity data. Consumers have some idea of the data these devices capture, but most don’t realize how revealing and...
There is an ever-growing explosion of new devices that are connected to the Internet using “cloud” solutions. This rapid growth is creating a massive new demand for efficient access to data. And it’s not just about connecting to that data anymore. This new demand is bringing new issues and challenges and it is important for companies to scale for the coming growth. And with that scaling comes the need for greater security, gathering and data analysis, storage, connectivity and, of course, the...
Artificial Intelligence has the potential to massively disrupt IoT. In his session at 18th Cloud Expo, AJ Abdallat, CEO of Beyond AI, will discuss what the five main drivers are in Artificial Intelligence that could shape the future of the Internet of Things. AJ Abdallat is CEO of Beyond AI. He has over 20 years of management experience in the fields of artificial intelligence, sensors, instruments, devices and software for telecommunications, life sciences, environmental monitoring, process...
Struggling to keep up with increasing application demand? Learn how Platform as a Service (PaaS) can streamline application development processes and make resource management easy.
SYS-CON Events announced today that Ericsson has been named “Gold Sponsor” of SYS-CON's @ThingsExpo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. Ericsson is a world leader in the rapidly changing environment of communications technology – providing equipment, software and services to enable transformation through mobility. Some 40 percent of global mobile traffic runs through networks we have supplied. More than 1 billion subscribers around the world re...
In the world of DevOps there are ‘known good practices’ – aka ‘patterns’ – and ‘known bad practices’ – aka ‘anti-patterns.' Many of these patterns and anti-patterns have been developed from real world experience, especially by the early adopters of DevOps theory; but many are more feasible in theory than in practice, especially for more recent entrants to the DevOps scene. In this power panel at @DevOpsSummit at 18th Cloud Expo, moderated by DevOps Conference Chair Andi Mann, panelists will dis...
Many private cloud projects were built to deliver self-service access to development and test resources. While those clouds delivered faster access to resources, they lacked visibility, control and security needed for production deployments. In their session at 18th Cloud Expo, Steve Anderson, Product Manager at BMC Software, and Rick Lefort, Principal Technical Marketing Consultant at BMC Software, will discuss how a cloud designed for production operations not only helps accelerate developer...
We’ve worked with dozens of early adopters across numerous industries and will debunk common misperceptions, which starts with understanding that many of the connected products we’ll use over the next 5 years are already products, they’re just not yet connected. With an IoT product, time-in-market provides much more essential feedback than ever before. Innovation comes from what you do with the data that the connected product provides in order to enhance the customer experience and optimize busi...
Much of the value of DevOps comes from a (renewed) focus on measurement, sharing, and continuous feedback loops. In increasingly complex DevOps workflows and environments, and especially in larger, regulated, or more crystallized organizations, these core concepts become even more critical. In his session at @DevOpsSummit at 18th Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, will show how, by focusing on 'metrics that matter,' you can provide objective, transparent, and meaningfu...
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
If there is anything we have learned by now, is that every business paves their own unique path for releasing software- every pipeline, implementation and practices are a bit different, and DevOps comes in all shapes and sizes. Software delivery practices are often comprised of set of several complementing (or even competing) methodologies – such as leveraging Agile, DevOps and even a mix of ITIL, to create the combination that’s most suitable for your organization and that maximize your busines...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, will discuss how leveraging the Industrial Interne...
The IoTs 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, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...