Smart Business spoke to Edward Kubiak, Executive Vice President of Sales & Marketing at Phoenix Energy Technologies, about why now is the time to investigate sustainability initiatives to reduce energy use and costs in commercial buildings.

Nowadays, it’s no secret that getting hip to being green is good for business. And, when you’re delivering a consumer product, the eye-catching appeal of green materials, green packaging and green marketing makes good sense. However, in a B2B environment, and more specifically the commercial real estate market, leveraging green marketing to drive business development and customer retention leaves many unsure where to begin.

In a perfect world, electricity in your buildings would run using solar panels. You’d build exclusively with sustainable materials, and plant with indigenous landscape. Your tenants would vehemently recycle. And, they wouldn’t run the lights and HVAC system carelessly and unnecessarily.

But, just because the world isn’t perfect (there will always be those who bypass the recycle bin for the garbage can), doesn’t mean it’s time to throw your hands up in the air. Because, there are sustainability initiatives that not only improve public perception through environmental and corporate stewardship, they also save you money (big money) down the road. In fact, in the case of sustainable energy initiatives it can be a very short road, with ROI happening in a matter of months, not years.

As social, economic and regulatory pressures mount, commercial building owners are increasingly asked to do more with less. Only, as it turns out, when it comes to energy, “asking” building owners to do more with less is quickly giving way to public policy that demands a new way of doing things. Enter the Commercial Energy Rating & Disclosure Policy, legislation that targets the single largest consumer of energy in North America. Consuming two-thirds of the nation’s power supply and emitting 40 percent of the nation’s greenhouse gases, this policy aims to bring energy transparency to the commercial building market for the first time ever.

I recently came across a report from BuildingRating (www.buildingrating.com), which I found to be compelling in more ways than one. In essence, the report details a framework for implementing a commercial energy rating and disclosure policy, indicating that systems which capture energy data are quickly evolving from a “nice to have” to a “have to have” for commercial buildings in major markets. The legislation, which has been passed in five cities and two states (New York City, Seattle, San Francisco, Washington D.C., Austin, California and Washington State), requires that commercial building owners post their facility energy-performance data via the Web, enabling potential tenants, peers, investors, and the general public to access building energy data. While these policies are currently in their infancy, as an energy veteran, this transformation in the commercial building space is nothing short of revolutionary. Building ratings, data transparency that could influence customer and prospect behavior, and a new sense of accountability further drive commercial building owners to seek energy management solutions that facilitate compliance and drive a competitive edge.

Back in August, Phoenix Energy Technologies provided a Smart Business Insights article on enterprise energy management, detailing the ways in which technology can be leveraged to turn sustainability challenges into increased profit and reduced costs. This latest legislative development only augments the increasing need for such technologies in the commercial space.

The power of an EEM system lies in that historical data that is collected and benchmarked (a requirement of the passed legislation). Then, real time data is gathered, normalized for variables such as weather and schedules, and analyzed, allowing users to compare past use to current use in order to identify potential issues. Most importantly, with this information easily accessible and in an easy-to-interpret format, Facility and Operations personnel are empowered with the data they need to take action that reduces consumption and costs.

In terms of the U.S. Commercial Energy Rating & Disclosure Policy legislation, an enterprise energy management system is worth its weight in gold. Absent an energy management system, the process is tedious, laborious, and error heavy (we’re only human). On the contrary, utilizing the technologies available in the rapidly expanding EEM market, an automated data collection process facilitates compliance with the most stringent of standards.

With many vendor solutions available, I encourage you to explore the marketplace to find the solution that best fits your needs. With rapidly evolving standards, you would be wise to consider those vendors that offer a nimble solution that is capable of evolving and changing with the times. Most often, I have found software solutions, as opposed to hardware solutions, to be ideal under these circumstances.

There are cases in which being fashionably late to the party makes good sense. In the case of energy management, delaying a good, hard look at your current energy strategy — an inevitable consequence of this fledgling legislation — only delays significant, long-term savings potential. To view a complete copy of the report referenced in this article, please visit:

http://www.buildingrating.org/Building_Energy_Transparency_Implementation_Report

Edward Kubiak is Executive Vice President of Sales & Marketing at Phoenix Energy Technologies. Reach him at ekubiak@phoenixet.com.

Published in Dallas

Competitive energy markets give business leaders an opportunity to choose a supplier, negotiate rates for electricity and natural gas, and customize a suite of innovative products and services to meet their needs. But nearly 38 percent of industrial and 67 percent of commercial companies still haven’t cashed in on the state’s open energy market because they’re still relying on old buying habits, says Robert D. Gabbard, president of PPL EnergyPlus.

“I firmly believe that an open marketplace creates efficiencies and is superior to a vertically integrated monopoly, because prices have been trending lower since 2008 and the early adopters have been able to reduce their company’s overall energy costs by 5 percent to 10 percent and, in some cases, even more,” says Gabbard.

Smart Business spoke with Gabbard about how businesses can capitalize on Pennsylvania’s open energy market by forming new buying habits.

What major changes have taken place in the Pennsylvania energy market in the last five years?

The creation of an open, competitive energy market in Pennsylvania has spawned industry consolidation and several mergers in recent years. On the one hand, consolidation is advantageous because only the most efficient and financially sound suppliers survive and savvy executives have seized the opportunity to garner additional savings by leveraging their purchasing power.

On the other hand, executives must use due diligence to select a financially sound supplier and choose products and services that support their business model. For example, if your company has implemented a green initiative, select a supplier that offers energy from renewable sources.

Or, if your goal is to drive revenue by signing new customers to long-term agreements, it makes sense to reduce price volatility by negotiating a long-term energy contract.

The bottom line is that there’s no need to settle, as business leaders have the opportunity to select a supplier and a suite of products and services that fit their company’s needs.

What is the most important thing businesses in Pennsylvania should know about the competitive energy market?

Pennsylvania is no longer operating under a monopolistic structure, but you don’t have to take a lot of risk or sign a long-term contract to garner lower rates and better service. Start by making small changes that create new buying habits, such as researching suppliers, requesting quotes and then signing a simple, short-term contract. Once you’re comfortable with your supplier and the bidding process, you’re ready to source additional savings by utilizing demand-side management programs or shifting daily production schedules to capitalize on lower energy rates throughout the day.

You don’t have to predict your future energy needs to receive a low rate, because there are programs for businesses that can’t forecast or that expect a change from their historical usage, and there is even a program that offers price certainty while allowing customers to take advantage of a reduction in wholesale energy prices. Your supplier should offer to conduct an analysis and help you identify ways to lower your total energy costs that exceed a reduction in your basic energy rates.

What trends should businesses be paying attention to in the energy sector?

Unlike the old days, executives need to monitor the underlying commodity prices monthly or quarterly so they can spot opportunities to extend and renew their energy rates and contract terms. If you don’t have time to monitor the wholesale market, select a supplier that will do it for you and contact you when an opportunity arises.

Energy companies competing for business in a competitive, open marketplace foster innovation and technology developments, so be on the lookout for products and services that will help you monitor and control your daily usage and forecast your future needs. Don’t hesitate to suggest a new product from your supplier.

The key is selecting a trusted supplier that is compatible with your company’s culture and business objectives, because Pennsylvania business executives no longer have to settle for the status quo.

What makes PPL EnergyPlus different from other energy suppliers?

We’ve been in Pennsylvania for more 90 years so we understand our customers’ needs and the nuances of each city. At the same time, we offer the security of a multinational Fortune 500 company with a strong balance sheet. Our in-state network of power generation plants creates operating efficiencies by allowing us to deliver energy across very short distances.

But our greatest differentiator is our business model and our commitment to customized service instead of taking a one-size-fits-all approach. We consult with business managers and recommend specific ways to use power more efficiently before suggesting a customized slate of products and services

PPL EnergyPlus, LLC is an unregulated subsidiary of PPL Corporation. PPL EnergyPlus is not the same company as PPL Electric Utilities. The prices of PPL EnergyPlus are not regulated by the Pennsylvania Public Utility Commission. You do not have to buy PPL EnergyPlus electricity or other products in order to receive the same quality regulated services from PPL Electric Utilities.

Robert D. Gabbard is the president of PPL EnergyPlus. Reach him at RDGabbard@pplweb.com or (610) 774-4168.

Published in Philadelphia

Smart Business spoke to Edward Kubiak, Executive Vice President of Sales & Marketing at Phoenix Energy Technologies, about why now is the time to investigate sustainability initiatives to reduce energy use and costs in commercial buildings.

Nowadays, it’s no secret that getting hip to being green is good for business. And, when you’re delivering a consumer product, the eye-catching appeal of green materials, green packaging and green marketing makes good sense. However, in a B2B environment, and more specifically the commercial real estate market, leveraging green marketing to drive business development and customer retention leaves many unsure where to begin.

In a perfect world, electricity in your buildings would run using solar panels. You’d build exclusively with sustainable materials, and plant with indigenous landscape. Your tenants would vehemently recycle. And, they wouldn’t run the lights and HVAC system carelessly and unnecessarily.

But, just because the world isn’t perfect (there will always be those who bypass the recycle bin for the garbage can), doesn’t mean it’s time to throw your hands up in the air. Because, there are sustainability initiatives that not only improve public perception through environmental and corporate stewardship, they also save you money (big money) down the road. In fact, in the case of sustainable energy initiatives it can be a very short road, with ROI happening in a matter of months, not years.

As social, economic and regulatory pressures mount, commercial building owners are increasingly asked to do more with less. Only, as it turns out, when it comes to energy, “asking” building owners to do more with less is quickly giving way to public policy that demands a new way of doing things. Enter the Commercial Energy Rating & Disclosure Policy, legislation that targets the single largest consumer of energy in North America. Consuming two-thirds of the nation’s power supply and emitting 40 percent of the nation’s greenhouse gases, this policy aims to bring energy transparency to the commercial building market for the first time ever.

I recently came across a report from BuildingRating (www.buildingrating.com), which I found to be compelling in more ways than one. In essence, the report details a framework for implementing a commercial energy rating and disclosure policy, indicating that systems which capture energy data are quickly evolving from a “nice to have” to a “have to have” for commercial buildings in major markets. The legislation, which has been passed in five cities and two states (New York City, Seattle, San Francisco, Washington D.C., Austin, California and Washington State), requires that commercial building owners post their facility energy-performance data via the Web, enabling potential tenants, peers, investors, and the general public to access building energy data. While these policies are currently in their infancy, as an energy veteran, this transformation in the commercial building space is nothing short of revolutionary. Building ratings, data transparency that could influence customer and prospect behavior, and a new sense of accountability further drive commercial building owners to seek energy management solutions that facilitate compliance and drive a competitive edge.

Back in August, Phoenix Energy Technologies provided a Smart Business Insights article on enterprise energy management, detailing the ways in which technology can be leveraged to turn sustainability challenges into increased profit and reduced costs. This latest legislative development only augments the increasing need for such technologies in the commercial space.

The power of an EEM system lies in that historical data that is collected and benchmarked (a requirement of the passed legislation). Then, real time data is gathered, normalized for variables such as weather and schedules, and analyzed, allowing users to compare past use to current use in order to identify potential issues. Most importantly, with this information easily accessible and in an easy-to-interpret format, Facility and Operations personnel are empowered with the data they need to take action that reduces consumption and costs.

In terms of the U.S. Commercial Energy Rating & Disclosure Policy legislation, an enterprise energy management system is worth its weight in gold. Absent an energy management system, the process is tedious, laborious, and error heavy (we’re only human). On the contrary, utilizing the technologies available in the rapidly expanding EEM market, an automated data collection process facilitates compliance with the most stringent of standards.

With many vendor solutions available, I encourage you to explore the marketplace to find the solution that best fits your needs. With rapidly evolving standards, you would be wise to consider those vendors that offer a nimble solution that is capable of evolving and changing with the times. Most often, I have found software solutions, as opposed to hardware solutions, to be ideal under these circumstances.

There are cases in which being fashionably late to the party makes good sense. In the case of energy management, delaying a good, hard look at your current energy strategy — an inevitable consequence of this fledgling legislation — only delays significant, long-term savings potential. To view a complete copy of the report referenced in this article, please visit:

http://www.buildingrating.org/Building_Energy_Transparency_Implementation_Report

Edward Kubiak is Executive Vice President of Sales & Marketing at Phoenix Energy Technologies. Reach him at ekubiak@phoenixet.com.

Published in Orange County

Business owners everywhere are hearing more about renewables. Whether it involves solar, wind, biomass or hydro, the notion of new and renewable forms of energy is becoming mainstream.

But how can the average business enter into the renewable energy fray and reap the benefits of cleaner energy while also maintaining a stable cost structure?

Smart Business learned more from Steven Gabrielle, the director of Asset Management and Development for PPL Renewable Energy, about how businesses can make the new world of energy options work for them.

How can renewable energy help businesses achieve their operational and environmental objectives?

A growing number of businesses are exploring renewable energy options as a way to meet their business objectives for sustainability and social responsibility, generate a portion of the electricity they use and reduce their carbon footprint. Businesses also may be interested in the government incentives and tax credits being offered for renewable energy development.

PPL Renewable Energy and PPL EnergyPlus offer a range of alternatives for businesses interested in renewable energy. We have a successful track record of developing and operating renewable energy projects. For businesses that may not be looking to build generation on-site, our companies offer renewable energy supply and renewable energy credits for businesses looking for a ‘greener’ energy supply that would like to encourage more development of solar, wind, biogas and other renewable sources.

How can working with a renewable energy provider help businesses achieve their greener goals?

With our combined expertise, PPL Renewable Energy and PPL EnergyPlus can help businesses with everything from building a renewable energy project at their site, to purchasing renewable energy credits generated by existing projects. Businesses looking to ‘grow greener’ have a lot of options. PPL Renewable Energy and PPL EnergyPlus can support whatever option interests them.

PPL Renewable Energy owns and operates nearly 50 megawatts of solar, wind and biogas projects in Pennsylvania, New Jersey and New England. PPL EnergyPlus has agreements in place to purchase electricity generated by two wind projects in Pennsylvania, and purchase half of the renewable energy credits from a wind project in West Virginia. Those projects total 132 megawatts of clean generation.

These renewable energy projects offset millions of pounds of carbon dioxide — the equivalent of planting tens of thousands of acres of trees or removing thousands of cars from the road.

We are proud to say PPL Renewable Energy and PPL EnergyPlus are helping businesses to be successfully green. PPL Renewable Energy has been honored by the Environmental Protection Agency for our strong commitment to partnerships and the environment, and recently received an award from the environmental organization Penn Future.

How do customers buy renewable power?

Businesses can purchase energy generated directly by renewable projects, or they can purchase renewable energy credits. These credits are a mechanism established to support the further development of renewable energy projects by giving developers a sellable commodity in addition to the electricity they generate.

Credits can be purchased in the voluntary market, where businesses pay a green energy adder that is provided with their electric bills, or in the compliance market, where credits are tracked for compliance with state renewable energy requirements. PPL Renewable Energy and PPL EnergyPlus are committed to increasing the availability of renewable energy and increasing the diversity of generation sources to meet electricity demand.

We believe the future of renewable energy is bright, and demand will increase as the cost of renewable energy becomes more competitive with other forms of power, and as government mandates require a more diverse and more secure energy portfolio to meet future demand.

What characteristics should business customers look for when choosing their renewable energy supplier?

If you are looking to develop your own renewable generation, look for experience. You want a partner with a proven track record of success in siting projects, obtaining permit approvals and building projects on time and within budget.

On both counts, PPL EnergyPlus and PPL Renewable Energy have a strong presence in the renewable energy market. We have a record of performance and service. We have renewable energy assets. We have built and operate successful projects. We are part of a strong and stable company that has been generating, selling and delivering electricity for nearly a century.

PPL EnergyPlus is not the same company as PPL Electric Utilities. The prices of PPL EnergyPlus are not regulated by the Pennsylvania Public Utility Commission. Customers do not have to buy PPL EnergyPlus electricity or other products in order to receive the same quality regulated services from PPL Electric Utilities.

Steven Gabrielle is the director of Asset Management and Development for PPL Renewable Energy, a subsidiary of PPL Corporation. PPL EnergyPlus markets this green energy for PPL Renewable Energy. PPL Renewable Energy funds, develops, constructs, owns and operates renewable energy facilities in Pennsylvania, New Jersey and New England. To learn more, visit www.pplrenewableenergy.com.

Published in Philadelphia

Executives can’t control the fluctuating economy, rising cost of raw materials or shifting customer preferences. But savvy leaders are taking control of a key business cost — energy — by choosing an energy supplier, selecting a product structure to support their business needs and eliminating financial uncertainty by negotiating long-term energy supply contracts that provide them the price and product structure that meets their needs.

Reducing energy costs by even a small percentage can create a hefty competitive advantage. According to a 2011 report by Aberdeen Research, energy costs make up 25 percent of total operational costs in large U.S. plants, and IBM says that office buildings account for 70 percent of U.S. energy use. The authors note that managing energy costs is a top priority for 68 percent of business executives, and while the top-performing companies are exceeding their goals by 20 percent, the laggards are falling short by almost 11 percent.

“In Pennsylvania, it’s hard for executives to control operating costs if they purchase energy from their regulated utility because their default service prices, in many cases, change every 90 days,” says Annette Durnack, director of Retail Energy for PPL EnergyPlus. “Pennsylvania companies that purchase their energy from a competitive supplier can lock in rates for a term that meets their needs and select from a variety of cost-reducing products, rather than only one product offered by the utility.”

Smart Business spoke with Durnack about how to create a competitive advantage by choosing an energy supplier and complementary product structure.

Why should businesses be thinking about their energy supply?

Energy costs are a significant portion of total business costs for many companies. In Pennsylvania, businesses are not at the mercy of regulated utility rates. Opportunities abound to reap savings by choosing an energy supplier in the competitive market and to realize additional savings by requesting quotes now because prices have dropped 25 percent since the market peaked in 2009.

In addition, businesses choosing a competitive supplier can benefit from a customized slate of products and services that support their business plan. For example, if a company wants to woo new customers by launching a green initiative, it could partner with a supplier that offers renewable energy sources and agree to purchase a portion of its supply from a renewable component. Or if a customer needs to lock in the price of the product they produce for three years and energy is a big part of that cost, locking in an energy supply price can help achieve that objective.

When is the best time to buy energy?

The spring and fall months are traditionally the best time to buy because prices drop as demand ebbs. Beyond optimizing seasonal price differences, companies can garner additional savings by choosing an energy supplier in the competitive market. Companies that don’t choose a supplier will see energy rates fluctuate because regulated utilities change their rates for default service — the service you get if you don’t select a competitive supplier — every three months.

In turn, businesses may have to raise prices for goods and services, which can impact customer loyalty, revenue and margins, and create a climate of financial uncertainty. Companies that partner with a competitive supplier enjoy a competitive advantage because they can contractually lock in prices for 12, 24, 36 months or longer, and choose a product structure to meet their unique business needs.

What products and services can providers offer beyond energy supply?

A competitive supplier can offer renewable energy options that help businesses reduce their carbon footprint, run a green operation and market their environmental stewardship to the community. Some providers also offer companies the opportunity to earn revenue or credits by participating in demand response programs if they are willing to curtail consumption when high electricity use strains the power grid. Companies can select a demand response product that best suits their needs and earn consistent, predictable revenue, even if an energy curtailment event never materializes. Some providers also offer weekly market updates so companies can stay on top of trends in the energy market, request quotes and time their energy purchases to capitalize on falling energy prices.

How can a demand response option benefit businesses?

Companies know the prices they’ll be charged and the discounts they’ll receive when they sign a long-term contract with a supplier and select an appropriate demand response program. And because energy costs make up a significant portion of a company’s operating budget, long-term contract pricing allows them to confidently forecast future expenses and bolster revenue by consummating multiyear deals with their customers. Not every state has a competitive electricity market, so companies that take advantage of Pennsylvania’s open market and demand response programs can get a leg up on the competition.

What are the advantages of bundling energy supply and energy services?

Buying bundled services provides the convenience of one-stop shopping and the opportunity to negotiate an advantageous deal by leveraging your total energy expenditures and purchasing power. Partnering with a supplier offers additional benefits, as a partner is more likely to build a relationship, understand your business plan and challenges, and then recommend a customized slate of services and products that will help your company compete. And an energy partner will help your business tailor your energy purchases to best meet your individual needs.

PPL EnergyPlus, LLC is an unregulated subsidiary of PPL Corporation. PPL EnergyPlus is not the same company as PPL Electric Utilities. The prices of PPL EnergyPlus are not regulated by the Pennsylvania Public Utility Commission. You do not have to buy PPL EnergyPlus electricity or other products in order to receive the same quality regulated services from PPL Electric Utilities.

Annette Durnack is director of Retail Energy for PPL EnergyPlus. Reach her at AMDurncack@pplweb.com or (610) 774-3182.

Published in Philadelphia

Smart Business spoke to Nicole Cinquini-Bray of Phoenix Energy Technologies about how the right technology can help trim your business's energy budget.

In just a few short years the Enterprise Energy Management (EEM) market has gone from baby to boomer, projected to grow from an estimated $0.7 billion in 2010 to $3.6 billion by 2015, according to a recent report from Forrester Research. A rising star in the sustainability and clean tech spaces, in the wake of economic crisis this emerging market has significantly upped its pace and its client base in 2010 — and it appears that this is only the beginning.

While the technologies available are nothing short of sophisticated, the premise behind EEM couldn’t be simpler. EEM helps businesses get smarter about how they’re using energy.

In terms of expense, energy most often ranks as the second or third largest operating expense for multi-site enterprises. And, while executives are accustomed to managing other major expenses like inventory and human resources using business intelligence and enterprise resource planning (ERP) software systems, few resources have been available to turn energy into a strategic resource flow. EEM software systems are rising to the occasion, giving enterprises a wide range of solutions in a diverse field of players ranging from global enterprises to small and medium businesses to startups.

If you’re currently responsible for a multi-site operation and have an energy spend of $1 million or more annually, now is the time to tune into the green-versation about Enterprise Energy Management systems. Bear in mind, this isn’t a hard line. However, with just a few buildings and a smaller energy budget, a robust EEM system is likely not the right fit for trimming the fat from your energy budget.

How it works

First, determine where and how energy is being used within your facilities. Next, identify areas of waste. Then, course-correct to save on energy consumption and costs. As an added bonus, by reducing energy consumption you’ll not only reduce costs, you’ll also improve your sustainability efforts, reduce your carbon footprint and bolster positive perceptions about your company and brand.

An EEM system automates the collection of critical data sources, meaning all of the data sources that impact energy consumption and costs. This might include building automation system data, meter data, weather feeds, occupancy and scheduling data, generator or renewable energy sources, billing data and budgets.

Once the data collection process has been automated, the data is cleansed, structured and normalized (meaning it is adjusted for weather and other outside variables to compensate for variations), and it is pushed out through a software application. Software applications will vary vendor by vendor, but the essence is consistent. These software applications enable key operations personnel, such as facility maintenance managers and energy managers, to interpret energy data, rooting out the highest energy and cost savings potential.

Most often, seemingly “obvious” adjustments make the most significant impact on the bottom line. However, absent transparency in your energy data, the energy savings potential for these adjustments are never realized. Changes as minor as adjusting temperature set points by a few degrees or adjusting a lighting schedule can have an equal or greater impact than a costly capital expenditure project. That’s not to say that efficiency measures in the form of capital projects aren’t an excellent form of energy savings over the long haul. However, in today’s economic climate, the cost of these types of projects can be a deterrent.

Case in point

As an example, Phoenix Energy Technologies recently engaged in a pilot program with a national retail account. During the pilot, the PhoenixET EEM system was implemented in 150 locations throughout the United States. Among the energy savings opportunities identified was the adjustment of temperature set points in 23 of the 150 locations.

At the pilot onset, overnight temperatures were set to 78 degrees in store. However, the energy consumed each morning as equipment worked hard to bring stores back down to a comfortable 72 degrees was actually greater than the energy it would take to simply set the overnight temperature to 74 degrees. Estimated annual savings chain-wide based on this adjustment alone were more than $200,000.

In other cases, a piece of faulty equipment or a scheduling bug that causes lights to turn on in the middle of the night — issues that might otherwise never be discovered — are discovered and corrected. When you aggregate these savings opportunities over multiple buildings, and over a period of time, the potential to reduce costs and environmental impact is significant. Some businesses have reported up to a 30 percent reduction in their total energy spend when an EEM system is implemented.

EEM certainly isn’t for everyone, and is largely targeted at the multi-site user. However, if you think there could be a fit, it warrants investigation. Energy prices are said to be rising faster than inflation. The social, economic and legal pressures relative to energy will continue to mount. There is a better process for managing your energy spend, and finding the right solution for your business is certain to have a positive impact on your bottom line.

Nicole Cinquini-Bray is director of marketing at Phoenix Energy Technologies. Reach her at ncinquinibray@phoenixet.com.

Published in Dallas

Are we entering a golden age of gas? The International Energy Agency seems to think so, citing the environmental qualities, ease of use and competitive prices of natural gas in a recent report.

New technology is creating plant efficiencies and the evolution of shale harvesting is increasing supply and reducing transportation costs, says Terry Crupi, director of Natural Gas Marketing and Trading for PPL EnergyPlus.

“Natural gas is increasing its prominence in the U.S. energy landscape,” says Crupi. “And Pennsylvania executives have an added advantage, because the region offers a straightforward platform for choosing a provider and managing energy costs.”

Smart Business spoke with Crupi about the evolution of natural gas and what it means for Pennsylvania business.

How is natural gas evolving to meet rising energy demands?

Traditionally, natural gas served as a home-heating fuel and feedstock for the industrial manufacturing sector, which caused demand to soar during colder months in northern regions of the country and highly industrialized cities. By the early 2000s, there was a dramatic surge in the construction of gas-fired power generation facilities, many of which use modern, fuel-efficient, combined-cycle technology. As a result, power grids rely on gas-fired power plants nearly as much as traditional baseload generation facilities fueled by nuclear fission and coal.

This dramatic increase in demand for natural gas has altered consumption and changed the way gas is used by region and season. Although summer demand used to be driven by the need to fill storage caverns for peak winter months, peak flow conditions along the pipeline now occur in summer as well as winter, as gas-fired power plants are used to meet rising summer electricity demands. This has greatly increased the importance of natural gas in our country’s overall energy picture, and lower prices are causing many customers to switch to natural gas. Also, the momentum toward natural-gas-powered vehicles offers tremendous potential for gas to increase its prominence in the U.S. energy landscape.

How do Pennsylvania businesses purchase natural gas?

The structure of the region’s natural gas market has been in place for several decades and provides customers with the opportunity to choose a competitive gas supplier and manage their energy costs. The regulated side of the market includes pipelines and local distribution companies that transport natural gas to end-users, but their rates and returns are controlled by state or federal agencies.

Customers of all shapes and sizes can optimize savings by purchasing natural gas from unregulated companies, because they aren’t required to purchase gas from a local utility. Gas suppliers typically collaborate with customers to develop a flexible pricing structure that meets their needs and optimizes current market conditions.

What should customers look for when choosing a natural gas supplier?

Because the composition of natural gas doesn’t vary, customers should select a supplier based on other characteristics, including:

  • License. Suppliers should be licensed by the state regulatory commission.
  • Financial stability. Assess a supplier’s tenure, history and financial health, as well as the financial condition of its parent, because it needs excellent credit to procure large quantities of gas at favorable prices in the wholesale market.
  • Customer service. Ask to see a sample invoice and review the supplier’s responsiveness to orders for triggering or fixing prices and process for issuing confirmations. Will the supplier help you set hedging strategies? Who will be servicing your account? Remember, the salesperson may not be your contact once you’re a customer.
  • A straightforward contract. Make sure there are no hidden renewal options in favor of the supplier and that any index pricing is appropriate and utilizes standard industry publications. The tone of the contract is indicative of a supplier’s approach, so take note if it seems one-sided.

How can natural gas consumers protect themselves from pricing volatility?

Natural gas is an actively traded and highly volatile commodity, which helps customers lock in favorable prices, but that also makes it difficult to craft an effective risk mitigation strategy. Some customers set price targets that align with corporate budgetary objectives, while others study the market and determine pricing points to capitalize on dips in the market. Still others are simply content to receive market-based pricing by purchasing gas at index-related prices. Customers can employ options to establish some limits on gas price floors and ceilings, but the best practice is to set a strategy that aligns with your risk appetite and execute it well.

How will Marcellus Shale natural gas production impact Pennsylvania energy?

Pennsylvania gas consumers are already seeing benefits from the Marcellus Shale, because the increased supply and proximity to the market is lowering transportation costs and overall natural gas prices. In terms of the total energy picture, it’s also having an effect on electricity markets because plentiful natural gas, coupled with increasing costs of coal, is causing many older coal-fired plants to retire in favor of gas-fired generation. In fact, Pennsylvania is becoming a prominent natural gas producing state, largely due to the Marcellus Shale.

PPL EnergyPlus, LLC is an unregulated subsidiary of PPL Corp. PPL EnergyPlus is not the same company as PPL Electric Utilities. The prices of PPL EnergyPlus are not regulated by the Pennsylvania Public Utility Commission. You do not have to buy PPL EnergyPlus electricity or other products in order to receive the same quality regulated services from PPL Electric Utilities.

Terry Crupi is director of Natural Gas Marketing and Trading for PPL EnergyPlus, a competitive gas supplier serving industrial and commercial customers in Pennsylvania, New Jersey, Maryland and Delaware. Reach him for wholesale and retail inquiries at PPLRetailGas@pplweb.com or (610) 774-2310.

Published in Philadelphia

The introduction of Pennsylvania’s competitive energy market in 1996 was intended to aid businesses (and consumers) that were hampered by electricity rates that exceeded the national average by as much as 15 percent.

But despite the fact that companies have been able to request bids from competing suppliers and purchase electricity supply at lower prices, many continue to pay more than they need to because they haven’t shopped for services or capitalized on falling energy prices by requesting new quotes from competitive suppliers.

“Pennsylvania’s energy market has come back with a vengeance since 2009, but optimizing the potential savings requires new habits and a changed mindset,” says L. Gene Alessandrini, senior vice president of marketing for PPL EnergyPlus. “Just getting online and requesting a quote from trusted suppliers can produce substantial savings for businesses with very little risk.”

Smart Business spoke with Alessandrini about the opportunities to immediately reduce your company’s electricity costs and control future costs by shopping the retail market and partnering with a savvy provider.

Is this a good time to be shopping for electricity?

Absolutely. Wholesale power prices have dropped in 2011, as new companies enter the market and the state-imposed temporary rate caps expire.

Companies that initially shopped the market and signed contracts back in 2009 or 2010 may be able to obtain lower electricity supply costs today by requesting new bids, while companies that haven’t shopped for services can reap immediate savings of 5 percent to 20 percent by doing so. Once they select a provider and sign a contract, smart business executives can turn their attention toward continuous improvement and controlling future costs by finding ways to increase efficiencies and reduce energy consumption. And because companies can lock in electricity rates and easily create energy savings, they free up cash for reinvestment purposes.

How can businesses save money on their energy bills by shopping for supply?

The move to a competitive energy market affords businesses greater control over their operating costs. Today, businesses can select from more than 25 providers in many parts of Pennsylvania and partner with a suitable supplier who understands their business and works with them to make it more successful.

Competitive electricity suppliers are still licensed and regulated by the state, but they are incentivized to purchase energy at the lowest possible price and offer customers top-notch service, as well as education and energy-saving recommendations and tools, because they have to market their services and compete for customers.

But the process could be overwhelming for small to mid-sized companies that aren’t used to vetting suppliers and requesting bids for services. That’s why it is a good idea to secure quotes from a handful of trusted suppliers and then sign a contract to get the ball rolling. Achieve the savings available to you today and then work to improve your knowledge and use of the competitive market.

What do businesses need to know before they shop for electricity?

Buying electricity in Pennsylvania now encompasses three phases. First, buyers request bids to garner immediate savings. Next, they work toward future cost reductions by considering investments in lighting systems, new heating and air conditioning systems or more efficient manufacturing equipment.

Finally, executives should monitor the energy market and request new pricing during the contract term to see if they can secure even lower rates by capitalizing on Pennsylvania’s competitive market.

How do businesses go about shopping for electricity?

The website for the Pennsylvania Public Utility Commission (www.papowerswitch.com) offers buyers a wealth of information, but it’s easy to navigate the procurement process by following these easy steps.

  • Briefly research the market, then complete the online authorization form and request bids from two to three suppliers that you know and trust.
  • Suppliers will be able to review your company’s historical energy usage and expenditures and will discuss with you your company’s projected needs and service requirements.
  • After reviewing the bids, simply select the provider and service package that best meets your company’s needs, then make note of the renewal date and be sure to repeat the process during or prior to the contract expiration.

What should businesses look for in an electricity supplier?

First, executives need to be concerned with business continuity and the financial strength and stability of their electricity supplier. But you should also select a savvy partner that offers more than a commodity. You should look for educational programs, a variety of product and service options and a consultative approach to suggest industry-specific, energy-procurement and energy-saving ideas.

There’s too much opportunity available to businesses for them to sit on the sidelines when, with a little hard work or even just a few clicks of a mouse, they can yield immediate and substantial savings on electricity.

L. Gene Alessandrini is senior vice president of marketing for PPL EnergyPlus. Reach him at lgalessandrini@pplweb.com or (610) 774-4483.

Published in Philadelphia
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