Audin is president of Energywiz, Inc. (www.energywiz.com), a New York-based consulting firm that helps commercial/industrial clients get the most out of the competitive energy market. He was formerly energy manager for Columbia University and founded the New York Energy Buyers Forum.
Choosing when to buy natural gas or power from a competitive supplier (i.e., not your local utility) presents unique risks and opportunities. A few lessons from wholesale markets may help.
The run-up in fuel prices following Hurricane Katrina pressured utilities to pass along to ratepayers the high costs they incurred to provide power and natural gas during the winter.
Opportunity knocks when least expected, but only those who are prepared will reap its benefits. One example is the recent reversal of natural gas and oil prices.
Trying to get the boss to invest in energy efficiency upgrades is often an uphill climb, but channeling such efforts through a quality management process may help level the field. By portraying energy waste as a "defect" requiring correction, some have used such methodologies (e.g., TQM, ISO 14001, Six Sigma) to secure superiors' support. Each process includes problem definition, measurement, analysis, and continuous improvement. All involve senior management personnel as part of a team approach.
Federally chartered independent system operators (ISOs) now control the power grids and wholesale markets for more than half the retail power customers in the U.S. In such areas, electric bills may soon (or already) include a charge to pay for keeping installed generating capac-ity (ICAP) available regardless of how much electricity it actually produces. While that ICAP charge is controversial (some regions avoid or have fought against it), power customers having backup generators may also be able to make money from it.
Think twice before jumping on that next "upgrade."
Hey, don't get me wrong. I am fully in favor of energy efficiency. But oversimplifying how savings are projected could result in some major disappointments.