ENERGY YESTERDAY _ TODAY_ AND TOMORROW by malj

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									ENERGY YESTERDAY, TODAY, AND
        TOMORROW
          J. MICHAEL LOVE
     President of J. Michael Love
              Consulting
  We are Going To Talk About Saving
      Money and Energy Today
• If you have money you don’t want then
  consider donating to Haiti instead of wasting
  the money.
• As an orphan who was adopted myself, I wish
  to point out to you that prior to the most
  recent earthquake there were 300,000
  orphans in Haiti.
• Now there are many more after the
  Earthquake. Maybe as many as 20,000 more.
        Thank You Gov. Rendell
• Bringing 54 orphans to Pittsburgh was a
  wonderful humanitarian gesture.
• Many if not most of the children were already
  adopted.
Now You Need to Adopt a wise Energy
             Strategy
• PPL has been urging people to shop for
  generation suppliers to offset some of the
  increase in their generation rates for years.
• The Public Utility Commission, the Consumer
  Advocate, and the Secretary of the DEP have all
  urged the same action: Namely shop for a new
  generation supplier to save money.
• The Patriot News, WGAL, the Central Penn
  Business Journal and Capitolwire have all run
  stories on the reasons to shift.
     Indeed these Efforts Have Been
               Rewarded
• While Chairman Cawley will have more recent
  numbers, somewhere between 18% and 20% of
  PPL’s customers have switched Generation
  Suppliers away from PPL.
• It is a tribute to PPL, the PUC Commissioners ,
  The Consumer Advocate and the DEP Secretary
  and the media that this dwarfs the usual 2% to 3
  % found in other states.
• The multiple suppliers have brought down
  generation prices from what one would have
  paid.
  How much money can people save?
• Depending on the offer, the length of the
  offer, the source of the generation, you can all
  save at least 5%, more likely 10% and possibly
  as much as 15%.
       Why Electric Restructuring of
               Generation
• Retail customers had experienced both significant
  and often steady rate increases.
• Both in PA and elsewhere there were cost
  overruns associated with generating station
  construction.
• Generating Stations had relatively poor
  operational experience.
• Higher fossil fuel increases, little to no alternative
  energy.
• Increased pollution control measures and ever
  increasing demand for electricity.
 1996 Electricity Generation Customer
     Choice and Competition Act
• Ratepayers are no longer bearing the risk of
  generation construction overruns, rather those
  that construct units bear all risks.
• Owners of generating plant assets are paid when
  the generating units run which has led to
  significant operating ratios and improved
  efficiency.
• Diversity of supply options with offerings
  including alternative energy , demand side
  management and demand response.
         Quantifiable Benefits
• Nuclear Plants under regulated generation ran
  about 59% of the time, now in the competitive
  world 93.5% of the time. $125 Million.
• Consumer demand side management programs
  have flourished under PJM. $650 Milliom.
• Our generation mix has greater diversity, and
  thus more competitive.
• Wind construction, solar and natural gas
  encouragement, biomass economics , nuclear
  rated capacity and hydroelectric expansions.
 Poor Comparisons Between So Called
  Restructured and Regulated States
• States are assigned incorrectly
• Other Factors are at work such as Gas Prices,
  coal % of generation, environmental policies,
• State Policies on Hydroelectric, Rate Design,
  Assignment of low cost coal plants
• Fossil Fuel Prices went up significantly
• Generation Mix
• Tax Policies on Energy
New Construction of Generating Units
           is expensive.
•   Nuclear
•   Solar
•   Coal
•   Hydroelectric
Demand Response , Energy Efficiency,
   and Conservation Make $ense
• Go To Vendors at this conference.
• Get an Energy Audit.
• Energy as it reflects new costs will be more
  expensive and measures to use less or use
  energy more efficiently become more
  economic with the passage of time.
          Just Around The Corner

• Home and business sales will need an energy
  audit to move the property to a sale.
• Smart meters and two way communication
  between utility and consumer will lead to a
  greater diversity of rates and energy efficiency
  incentives.
• Residential Class is a huge unknown.
• Old customer classes of industrial, commercial
  and residential are too general in this new data
  driven world.
 Market Driven Price Signals Will Lead
 to more Economic Decision Making
• Rate Caps discouraged conservation and
  energy efficiency.
• Price of Natural Gas is the Wild Card.
• Rate Caps discouraged hiring.
• Federal and State Tendencies to Tax energy is
  a concept worthy of being revisited.
          Challenges Lie Ahead
• We say we want Wind as an alternative energy
  source yet local authorities are shooting down
  projects with greater frequency.
• We say we want Hydroelectric as an alternative
  energy source yet Pennsylvania leads the nation
  in the retirement of hydroelectric facilities.
• We say we want conservation and energy
  efficiency but elimination of analog signal TV’S, 7
  hours and 38 minutes of children used electric
  powered devices and 3-D TV offerings all say no.
      THE PUC HAS DELIVERED
• Ridge and Rendell appointed strong, smart
  energy policy Commissioners that has
  allowed us to avoid the mistakes found in
  California ,Michigan, Delaware, Maryland,
  Illinois and elsewhere.
 PUBLIC EDUCATION CHALLENGES
• 20% is better than other states 2%
• 20-40 Competitors is a good sign
• Time of Use Rates, Smart Meters, Automated
  Demand Reduction, Behavior Switch on
  Energy and also Demand Usage requires an
  attentive public.
• Voluntary measures will not be enough.
                     Goals
• We need to educate the young like we did
  with smoking and seat belts. All energy does
  not cost the same.
• With our wind resources, our gas resources ,
  our governmental encouragement of
  conservation ,solar, and demand response,
  our coal resources, there is no way we should
  still have oil fired electric generation in this
  state.
           Electricity Markets
• We have seen favorable response and dollar
  savings from PJM demand curtailment.
  However, the residential class is yet to be
  seriously engaged.
• Electricity Storage is a great unknown.
• Fuel Substitution has both plus and minus.
• Environmental and Tax policies are an
  unknown.
           Price of Natural Gas
• The greatest unknown and biggest factor
  impacting the price of electricity is the price of
  natural gas.
 Rate Caps Coming Off Elsewhere
• Met Ed and PECO and Allegheny will all be
  different from each other and PPL.
• Act 129 as discussed by Chairman Cawley is a
  game changer.
• The more informed, the more energy efficient
  our population is , the better we all are.
• The vendors at this wonderful event are a
  place to start.
  Exercise of Sound Judgment and
 Reduced Consumption =Energy Diet
• 5% energy reduction could make a world of
  difference.
• We have been adding energy pounds for
  years.
• We need to review all programs for their
  impact on energy consumption.
• We have an old housing stock.
• Paddy is a good example.

								
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