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
Evan Kirstel is an internationally recognized thought leader and social media influencer in IoT (#1 in 2017), Cloud, Data Security (2016), Health Tech (#9 in 2017), Digital Health (#6 in 2016), B2B Marketing (#5 in 2015), AI, Smart Home, Digital (2017), IIoT (#1 in 2017) and Telecom/Wireless/5G. His connections are a "Who's Who" in these technologies, He is in the top 10 most mentioned/re-tweeted by CMOs and CIOs (2016) and have been recently named 5th most influential B2B marketeer in the US. H...
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of bus...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, @CloudEXPO and DXWorldEXPO are two of the most important technology events of the year. Since its launch over eight years ago, @CloudEXPO and DXWorldEXPO have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, we provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.
DXWorldEXPO LLC announced today that ICOHOLDER named "Media Sponsor" of Miami Blockchain Event by FinTechEXPO. ICOHOLDER give you detailed information and help the community to invest in the trusty projects. Miami Blockchain Event by FinTechEXPO has opened its Call for Papers. The two-day event will present 20 top Blockchain experts. All speaking inquiries which covers the following information can be submitted by email to [email protected] Miami Blockchain Event by FinTechEXPO also offers s...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
@DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises - and delivering real results.
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
DXWorldEXPO LLC announced today that Dez Blanchfield joined the faculty of CloudEXPO's "10-Year Anniversary Event" which will take place on November 11-13, 2018 in New York City. Dez is a strategic leader in business and digital transformation with 25 years of experience in the IT and telecommunications industries developing strategies and implementing business initiatives. He has a breadth of expertise spanning technologies such as cloud computing, big data and analytics, cognitive computing, m...
"We started a Master of Science in business analytics - that's the hot topic. We serve the business community around San Francisco so we educate the working professionals and this is where they all want to be," explained Judy Lee, Associate Professor and Department Chair at Golden Gate University, 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.
Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to ...
DXWorldEXPO LLC announced today that Kevin Jackson joined the faculty of CloudEXPO's "10-Year Anniversary Event" which will take place on November 11-13, 2018 in New York City. Kevin L. Jackson is a globally recognized cloud computing expert and Founder/Author of the award winning "Cloud Musings" blog. Mr. Jackson has also been recognized as a "Top 100 Cybersecurity Influencer and Brand" by Onalytica (2015), a Huffington Post "Top 100 Cloud Computing Experts on Twitter" (2013) and a "Top 50 C...
Cloud-enabled transformation has evolved from cost saving measure to business innovation strategy -- one that combines the cloud with cognitive capabilities to drive market disruption. Learn how you can achieve the insight and agility you need to gain a competitive advantage. Industry-acclaimed CTO and cloud expert, Shankar Kalyana presents. Only the most exceptional IBMers are appointed with the rare distinction of IBM Fellow, the highest technical honor in the company. Shankar has also receive...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.