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What you are telling your teams, customers and others about rising energy bills this winter?

JD Saunders's picture
CAM, MidAmericanEnergy

Growing more every day!  Learn daily.  Be better!

  • Member since 2021
  • 2 items added with 1,322 views
  • Sep 22, 2021

I saw this today on LinkedIn and wanted to ask you guys what you are telling your  teams, customers and others?  

Your energy bill may skyrocket

If you haven’t already heard, natural gas prices are surging and they're set to get even worse this winter.



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My experience as an energy consultant for large industrial/commercial/institutional energy users is: tell the customer in a straight forward and simple to understand manner about what's going on even though it is not what they would like to hear!
It is about being honest and most importantly: suggesting options to face the new situation by indicating how to deal with $/MWh when it comes to energy sources contracting and MWh/physical consumption regarding energy conversion processes.
New challenges, new opportunities to strive!

In California, utilities are allowed to pass on wholesale price fluctuations to their retail customers.  That said, if the price of NG doubles retail customers will definitely see an increase in their monthly bill.  But probably not doubled; dependent on the utilities overall NG portfolio.

As far as NG powered power plants are concerned;  most utilities that I am familiar with hedge their 'open' position so that short term market fluctuations don't affect their cost of production prices significantly. 

There is a move in Sacramento to limit NG in new construction.  I'm not so sure this is a good idea.  Since most of our power plants are NG fueled you would need to burn NG anyway to supply the additional electric usage.

We purchase our gas in the off season and store it, so we typically have a price hedge on the inflating market demand.  Not a major issue at this moment.

Larry Kauf's picture
Larry Kauf on Sep 23, 2021

All my clients are locked into contracts in the $2.77 - $3.50/Dth range till 2022/23.

Sometimes the crystal ball works.

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