Table of Contents SECTION I ELECTRICITY 1 Regulation of Utilities .3 2 Developing a Strategy for Reducing Electricity Costs .15 3 The Electricity Utility Bill .31 4 Electricity Deregulation .45 5 Electricity Deregulation—The Current Status .93 6 Deregulation—The Process .99 7 Cogeneration .113 8 Natural Gas .121 9 The Natural Gas Utility Bill .149 SECTION II NATURAL GAS 10 Natural gas—An Overview .161 11 Natural Gas Regulation .169 12 Reducing Natural Gas Costs .181 13 The Natural Gas Flow Process .207 14 The Natural Gas Billing Process .225 15 The Propane-Air System .251 16 The Natural Gas Deregulation Process .259 17 The Natural Gas Contract Process .269 18 The Monthly Natural Gas Billing Procedure .303 19 Natural Gas Cost Reduction Strategies .315 SECTION III ELECTRICITY and NATURAL GAS HEDGING STRATEGIES 20 Electricity and Natural Gas Hedging Strategies .323 21 Electricity and Natural Gas Savings Opportunities .331 INDEX .335` vii.
Introduction MAXIMIZING ENERGY SAVINGS AND MINIMIZING COSTS There are so many different (so-called) energy ﬁxes available, that many energy users are hesitant to do anything because of the apparent complexity of these ﬁxes. Many large energy users have completely lost sight of the fact that they may not need (at least initially) time-consuming, large investment ﬁxes. Strange as this may sound, many users have little or no practical knowledge about the basics of their energy purchases.
Chapter 1 Regulation of Utilities UTILITIES—AN OVERVIEW Electricity Many changes are occurring in the electric utility industry. Deregulation of the electricity industry has progressed on a rather ununi- ﬁed state-by-state basis.
Chapter 2 Developing a Strategy for Reducing Electricity Costs THE COST REDUCTION STRATEGY The ﬁrst step in this undertaking is the obtaining of accurate infor- mation relating to the subject being investigated. The ﬁrst step in under- standing begins with the obtaining of data that relates to the pricing on a unit basis of the commodity being purchased. Since all utilities are regu- lated in one way or another, written records of usage and pricing data, as it relates to customers, must be available to any interested party that re- quires it.
Chapter 3 Analyzing the Electric Utility Bill ELECTRIC UTILITY COSTS Analyzing the Electric Utility Bill Since practically all electric utilities utilize different styles of billing formats, as well as types of information displayed on billings, there is no single “ﬁts all’ example. In view of the fact that there is not a single ex- ample that would apply to everyone’s billing design, the following Figure 3-1. Composite Electric Utility Billing Example is shown.
Chapter 4 Electricity Billing Components ELECTRICITY BILLING DETAILS To be able to reduce electricity costs, the billing components that im- pact cost must be understood. There are ﬁve standard items that make up the composite cost total.
Chapter 5 Electricity Deregulation Explained THE BASICS OF ELECTRICITY DEREGULATION Deregulation of electricity is simply the purchase of the electricity commodity by retail customers from a source other than their own serving utility. The process is very similar to retail customer purchase of natural gas; however, the effect on the electric utility is very different from that on the natural gas Local Distribution Company (LDC).
Chapter 6 Electricity Deregulation, The Process CATEGORIES OF DEREGULATED ELECTRICITY This section addresses the two classes of deregulated electricity that are currently the most frequently utilized. An understanding of these classes of deregulated electricity is necessary to be able to cost effectively purchase electricity from other than the serving utility sources.