Login

Tag: Armbruster

Sustainability…What the wha?

Posted on by m.usman@jjtestsite.us

by Scott Armbruster

kermit-the-frog-sustainability

 

Sustainability is a word that over the last 5 years has taken the energy industry by storm.  Merriam-Webster defines sustainability as:

“1: capable of being sustained.  2a: of, relating to, or being a method of harvesting or using a resource so that the resource is not depleted or permanently damaged. 2b: of or relating to a lifestyle involving the use of sustainable methods “

We hear this term from our clients at least once a day, and accept this as perceived path of business. This pressure to enact a “sustainability program” can come from many areas, whether internally or externally.  Bottom line is that these initiatives are here to stay, and we spend significant amount of time with our clients to initially map what the goals and objectives are of the initiative.  Focusing in on a specific area of sustainability can help pin point resources, achieve the required goals, and determine the most cost effective avenues to fulfill any sustainable energy plan.

Sustainability can typically be grouped into 3 main buckets.

  • Renewable Energy
    • Renewable Energy Credits (RECs)
    • Asset Ownership/Power Purchase Agreement (PPA)
  • Energy Efficiency
    • Process improvements/Load Optimization
    • Infrastructure Improvements/Capital Expense
  • Load Response
    • Critical Peak Load Management
    • Demand Response

Here at Choice Energy Services we understand every facet of sustainability.  We are here to be an extension of your staff, provide education, and leadership to help define and map your company’s sustainability initiative.  With multiple solutions, state programs, and federal incentives continually changing, successfully managing a sustainability program can be intense. Clearly defining what sustainability actually means to your organization is of upmost importance, because heading off blindly into the direction of environmental stewardship may hurt the ability of your business to sustain profitability.

Confidential: Choice Energy Services Retail, LP.

Are We There Yet?

Posted on by m.usman@jjtestsite.us

by Scott Armbruster

Are we there yet? …Are we there yet?…I’m Hungry!….Are we there yet? Yes, its vacation season. It’s time to continue the American tradition of hitting the road on long car trips while listening to your kids ask a hundred times…“are we there yet?” This simple, four word question coming from the back seat can increase most everyone’s level of frustration, and possible cloud your decision making. This same type of thought process is how I see the current state of renewable energy in the US. Some believe the trip is taking too long, and as a result believe that incentivizing and or forcing the switch to renewables is the way to get there quicker. Others believe we shouldn’t take shortcuts. They believe the market itself should determine the appropriate timeline being careful not to intentionally burden the fragile economy. This division will likely continue well into the future, and will especially be prevalent in this election year. While we all can agree that renewable energy is the future, how we get there, and how soon we get there has yet to be determined.

Renewable energy resources are great, technology has come a long way, and both wind and solar have shown that they are here to stay. One of the biggest unanswered questions relating to this technology is how do we generate electricity during those times where the wind is not blowing or the sun isn’t shining? Relying on Mother Nature and human predictability has its risks, and when the Federal and State governments layer on incentives the competitive advantages created by the market are disrupted. This only further exacerbates issues increasing the probability of having a reliability issue or adding price volatility.

States continue to implement stringent Renewable Portfolio Standards, picking and choosing the renewable technology they feel will be best. Those decision makers have done little to address the potential supply gap left from fossil fuel assets exiting market. It is clear that renewable generation is still long way away from providing base load generation, with most renewable solutions continuing to require significant incentives to remain competitive. Let’s not forget that this doesn’t address the fact that we cannot “make” the wind blow or the sun shine.

From my view point, incentivizing renewables that are dependent on unpredictable primary fuel sources come with both price and reliability risks. Without having economically viable solutions for storing electricity during times of plenty, we may see increased price volatility in some markets and of course higher costs as the economy is forced to adopt renewable energy, artificially inflating energy costs. From my desk I think additional focus needs to be on global participation, making other nations support this renewable push, because why should we as America hamstring our own companies further when competing globally against countries who don’t share the same environmental objectives.

Confidential: Choice Energy Services Retail, LP.

What’s This in My Supply Contract?

Posted on by m.usman@jjtestsite.us

by Scott Armbruster

What the hell are these terms listed in my electricity supply contract? It lists many different cost components such as: Capacity Performance, FERC 745, Nodal Congestion, Winter Reliability, Transmission Enhancements, Line Losses, Auction Revenue Rights, Material Adverse Change and that’s just half of them. Are these included in my price? Do I need my legal team to review this?

Electricity supply agreements can get a little confusing, especially when reviewing these agreements are not your primary job responsibility. An all in fixed price consists of several cost components that can be: included, passed through, adjusted, or not even applicable. And that is just for pricing. This doesn’t include the default language, limitations of liability, material adverse change, change in law, etc.  It can be so confusing that many customers try to utilize in-house legal teams to review energy contracts.  But is that the best option?

It has been Choice Energy Services experience that utilizing customer’s internal legal team can be an ineffective process. These legal teams understand legalese and standard contract provisions, but typically do not have experience with the energy related provisions of a contract. This may significantly hinder contract review efficiency and may end with the energy related contract provisions being misinterpreted or skipped over completely. Proving to be an inefficient use of a counsel’s time, which as well all know is not inexpensive.

Unlike natural gas, there is no North American Energy Standards Board (NAESB) contract, so each retail supplier’s contract should be reviewed for non industry standard provisions.  It’s understandable that all retail suppliers strive to protect themselves from unforeseen price risk relating to FERC approvals, customer load profile changes, and other unavoidable changes. These contracts typically change annually as the retail suppliers continue to adapt to the ever changing market. Having an experienced energy consultant to help interpret the contract, quantifying risk, and recommending a path forward is a key part to any energy strategy.

Confidential: Choice Energy Services Retail, LP.