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Capacity Energy Solutions has a unique process to legally purchase power on the wholesale market, significantly reducing the supply cost.
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Ideal Customer
Deregulation Background
Sample Payback
Three Phases
Alternate Options
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Purchase Electricity on the Wholesale Market
Buying power on the wholesale market can save as much as 75% on generation charges
Businesses who spend more than $1 million annually in one utilitary should consider purchasing power on the wholesale market. Multiple locations or meters can all benefit from the low rate.
Contact Us today for more information and for a free overview to see if your facility would benefit from purchasing power on the wholesale market.
Electricity Deregulation in Ohio
In 1999, Senate Bill 3 was passed in Ohio deregulating the power industry, introducing competition into the power industry. This opened the market for many alternate suppliers to purchase wholesale power and sell at a deeply discounted rate from the regulated utility. A Certified Retail Electric Supplier (CRES) License is required from the Public Utilities Commission to buy on the wholesale market.
There are high fixed costs to get into the market, including large credit requirements and annual fees to brokers and other necessary services. As a result, a CRES generally sells generation for 80% to 150% of their purchase price. Especially in south western Ohio, market penetration is high, and many customers have switched to an alternate supplier, saving considerable money. For customers who use more than $1 million of electricity annually, there is a substantial savings available to obtain a CRES license and subcontract brokerage services.
Sample Payback Analysis
About one third of electricity costs are fixed, non-bypassable charges that cannot be reduced. Most of the annual brokerage fees are fixed, therefore the more power a customer uses in a year, the more the potential savings. The numbers above are for a $900,000 per year customer.
The Three Phase Process
Phase I - The Feasibility Study
- Detailed utility bill analysis
- Jurisdiction analysis
- Corporate structure
- Generate financial statements for credit estimate
- Determine cost
- Outline timeline
- Determine savings and project payback
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Phase II - Application Submittals
- CRES Application to Public Utilities Commission
- MISO Application to purchase power
- File motions for privacy
- NERC Application
- Set up an EDI portal
- Secure back-up generation
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Phase III - Financial Planning
- Credit Requirements (Set up escrow)
- Hedge price of power (How much to hedge?)
- Daily and weekly look-ahead reports
- Power Broker
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We have a team of highly experienced experts to take you through this difficult licensing and brokering process.
Additional Methods of Utility Cost Reduction
Do you
need help reducing your energy rates? Capacity Engineering can help:
Our energy
consultants are industry experts in power distribution regulations and will work
with you and the utility companies negotiate a utility rate that benefits
everyone.
Energy
procurement in a deregulated market:
Ohio, Pennsylvania, Illinois and Michigan are all deregulated, meaning you have a
choice to shop around for a better price for power.
Are you
located in a regulated service area? We can help:
Often your utility company’s rate structure does follow how they are being billed for power
from the power generator. Capacity Engineering can help you negotiate a new
rate structure that is mutually beneficial for both you and the utility
company.
Reducing
your rate without changing utility companies:
In many cases
by purchasing additional equipment you will qualify for a lower rate with your
current utility provider. We consider all of these options in our analysis.
How did you choose your electricity supplier? Could you have a better rate?
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