Knowledge is the most valuable power

Top 10 Most Common Energy Purchasing Mistakes for Schools and Municipalities: Mistake #6 – Not Understanding How “Rachet Demand” Affects Your Cost

2012-02-20T07:01:00.000-08:00

Top 10 Most Common Energy Purchasing Mistakes Causing Governmental Organizations to Overpay:

1. Using a traditional RFP process (a virtual guarantee that you will overpay)

2. Adding or deleting meters to your contract without shopping or considering penalties

3. Waiting until near the end of your contract to start shopping

4. Using Interlocal agreements that do not shop your bids

5. Bundling energy and delivery (regulated wires) costs together

6. Not understanding how “ratchet demand” affects your cost

7. Hunting with a committee

8. Drowning in a pool

9. Signing an energy contract without the advice of a professional

10. Overlooking other savings/income opportunities

During these times of budget crunches, Texas Energy can show consumers how a little knowledge will reduce energy costs with just a little education:

All electric meters have a mechanism that measures kilowatt hours, similar to a car’s odometer. Commercial “demand” meters also have a “speedometer,” which measures your monthly peak when the most power is flowing at any given time.

The regulated portion of your bill, referred to as demand, delivery, or TDSP charges, are based upon your annual peak, not just what you use in any given month. Your minimum delivery charge is “ratcheted” at a minimum of 80% of that peak charge.

This is why baseball and football fields often pay hundreds or thousands of dollars each month in electric delivery costs during months when they have zero usage. This also causes schools to pay high delivery charges all summer long based on a peak they may have hit in May, August or September. The biggest problem is that few customers are aware of these rules, and they do not take steps to address this or avoid setting new peaks.

This also means that if a tenant moves out of a building but keep the meter energized, he will still pay based upon the last year’s peak, even if no energy is used. Few customers know that they can request a reset on that meter at no charge to drastically reduce delivery charges. If customers can cut their peak by half, they can also have the peak demand reset.

For nearly eight years, Texas Energy has spearheaded legislation to fix this unfair system that disproportionately affects churches, schools, performing arts and athletic facilities. We are proud to announce that this law finally passed in 2011 as HB 1064. It will reduce charges by millions of dollars across the state for meters with a low “load factor” (average usage compared to peak usage).

Texas Energy is actively engaged in testimony before the Public Utility Commission to ensure that consumers’ interests are served. It could still take years in some cases before each utility has reviews before the Public Utility Commission to rework rate tariff formulas, and customers actually see the effect on their bill.

In the meantime, consumers can avoid “turning everything on at once” on any single meter and hitting high peaks. Texas Energy can provide a detailed usage history report showing when these peaks occur, how to avoid them, and help you to quantify the actual costs in making these changes. The team at Texas Energy also works with facilities people to explore other options that can reduce these charges, such as re-metering, purchasing your own transformers, computer controlled systems, etc. We do not sell equipment or engineering services, so we can give you unbiased feedback from our clients regarding realistic returns for making these changes.

Top 10 Most Common Energy Purchasing Mistakes for Schools and Municipalities: Mistake #5 – Bundling Energy and Delivery Costs Together

2012-02-09T07:43:00.000-08:00

Top 10 Most Common Energy Purchasing Mistakes Causing Governmental Organizations to Overpay:

1. Using a traditional RFP process (a virtual guarantee that you will overpay)

2. Adding or deleting meters to your contract without shopping or considering penalties

3. Waiting until near the end of your contract to start shopping

4. Using Interlocal agreements that do not shop your bids

5. Bundling energy and delivery (regulated wires) costs together

6. Not understanding how “ratchet demand” affects your cost

7. Hunting with a committee

8. Drowning in a pool

9. Signing an energy contract without the advice of a professional

10. Overlooking other savings/income opportunities

Many energy companies or State approved pools, such as the GLO are selling “bundled” contracts with “price certainty” by assuming the risk that changes in your usage will cause your delivery costs to increase. While this is a simple way to achieve some overall price certainty, it is a fear-based approach that has a cost premium attached to it.

Reasons to avoid this option:

· Competition has reduced profit margins among providers who have found new ways to greatly increase their margin by insuring level delivery costs.

· Risk always increases cost. Providers look at your historic delivery costs and add some “padding” to be sure they will not lose on any deal.

· Delivery costs are still regulated. They are easily calculable and any changes in laws can typically take years before being enacted, well beyond the end of your energy contract. Many bundled contracts still allow providers to pass any regulatory increases to the customer, without necessarily giving you the benefit of any decreased costs.

· Recent legislation in HB 3693 requires school and municipal customers to reduce energy consumption by 5% each year. You may be unknowingly giving your provider a large portion of your realized savings from these efficiency measures.

· Texas Energy Aggregation spearheaded recently passed legislation (HB 1064), which will significantly reduce delivery costs, especially on athletic facility lighting. The fine print of some bundled contracts may allow your provider to capture these savings, while passing any regulatory increases along to you.

Understanding what affects delivery costs and taking steps to control them is crucial. Knowledge and expertise are always preferable to a fear-based decision making. A qualified electricity consultant, working with your facility managers, can offer valuable advice and a superior contract management strategy to help you reduce, control and accurately project these costs.

Top 10 Most Common Energy Purchasing Mistakes for Schools and Municipalities: Mistake #4 - Using Interlocal agreements that do not shop your bids

2012-02-03T13:18:00.000-08:00

Top 10 Most Common Energy Purchasing Mistakes Causing Governmental Organizations to Overpay:

1. Using a traditional RFP process (a virtual guarantee that you will overpay)

2. Adding or deleting meters to your contract without shopping or considering penalties

3. Waiting until near the end of your contract to start shopping

4. Using Interlocal agreements that do not shop your bids

5. Bundling energy and delivery (regulated wires) costs together

6. Not understanding how “ratchet demand” affects your cost

7. Hunting with a committee

8. Drowning in a pool

9. Signing an energy contract without the advice of a professional

10. Overlooking other savings/income opportunities

Interlocal agreements can save you a lot of time and money, but many have already selected a single energy provider before offering you a price. Why would any electric provider give you their best price when they have no fixed profit margin and if they’ve already been selected before locking in your price? Once a customer has committed to doing business with a provider, the provider’s incentive to offer the best deal diminishes.

All interlocal agreements are not created equal. The first question to ask is, “Was my pricing was ever competitively bid?” Should you consider using one of these pools, just make sure that you check for competitive pricing.

Prices have steadily declined over the last several years, so the single bid they offer probably looks great compared to what you have been paying. However, you are almost certainly leaving money on the table if you sign an exclusive agreement with an organization that does not compare multiple offers down to the final minutes of bidding.

Some organizations pledge to do everything in their power to provide the customer with an “apples to apples” comparison of bids, yet only offer bids from a single provider. If you are not receiving multiple bids from reputable and competitive providers then you are most likely using interlocal agreements that are not shopping your bids.

Ways to avoid making mistake #4:

· The more the merrier. Make sure that you are comparing pricing from multiple providers before locking in your rate - some organizations like the General Land Office (GLO) and Texas Association of School Boards (TASB) have already selected a single “approved vendor” before they ever offered you a price.

· Be sure before you sign. Once you have signed an exclusive arrangement with one brokering organization, you have to take whatever price they offer.

· Don’t be fooled by fees. Every pool pays a consulting organization a fee for their services, along with a fee to the political subdivision that conducted the RFP for the interlocal agreement. Most are not transparent about these fees. Ask if the fees are built into your price or if they are added on top of your offer.

· Trust experience. Texas Energy has won several interlocal agreements bidding for price, qualifications, and experience. We then take it one step further and take pricing bids from as many as twenty of the most reputable and competitive providers. We are unique in that none of these providers know who will win until the final minutes, making for lower risk for the providers and real price competition.

Top 10 Energy Purchasing Mistakes for Schools and Municipalities: Mistake #3 - Waiting until near the end of your contract to start shopping

2012-01-26T11:51:00.000-08:00

Start early. While immediate start contracts have been at slightly lower rates in recent years, don’t allow yourself to get pushed against a deadline and be at the mercy of the markets - smart customers should be in a position to act upon market opportunities at any time during the final year of their contract
Set a target. Set a realistic price target and begin monitoring the market prices and trends
Think of the factors. Keep in mind that there are many factors aside from natural gas futures that affect prices, such as unpredictable weather extremes, volatile heat rates, looming regulatory threats, lack of market liquidity, competition and access to credit in financial markets
Monitor daily. Enlist an experienced professional who watches pricing daily or set yourself up on a daily pricing email monitoring list

Instead of waiting for their electricity contract to expire, customers should keep an eye open for opportunities like a dramatic drop in natural gas prices. It is never too early to start shopping.

Top 10 Most Common Energy Purchasing Mistakes for Schools and Municipalities: Mistake #2

2012-01-19T09:50:00.000-08:00

Top 10 Most Common Energy Purchasing Mistakes Causing Governmental Organizations to Overpay:

1. Using a traditional RFP process (a virtual guarantee that you will overpay)
2. Adding or deleting meters to your contract without shopping or considering penalties
3. Waiting until near the end of your contract to start shopping
4. Using Interlocal agreements that do not shop your bids
5. Bundling energy and delivery (regulated wires) costs together
6. Not understanding how “ratchet demand” affects your cost
7. Hunting with a committee
8. Drowning in a pool
9. Signing an energy contract without the advice of a professional
10. Overlooking other savings/income opportunities

Most people do not fully understand their electricity contracts, bills or even know where to start. Because of this, they choose to work with companies they perceive as trustworthy in the hopes that their best interests will be kept in mind. Unfortunately, many school and municipalities overlook simple ways to cut costs.

So how can you know if your electricity provider is trustworthy and looking out for your best interests? Avoid mistake #2: Adding or deleting meters on your current contract without shopping or considering penalties

Ways to avoid mistake #2:
• Follow the rules. A good rule of thumb is to call your current provider and see if they are willing to add new meters to your current contract. If they will, don’t do it! Pricing has most certainly dropped.

• Shopping vs. Adding. A smart consultant will compare your existing contract to current market rates, and advise whether it is smarter to shop for a new contract or add it to your current deal if terms allow. New contracts can be set at any length to co-terminate with your existing contract. They then can be renewed as a group.

• Monitoring saves money. Rates have plummeted over the last few years. If your current energy company or consulting agency has not been managing your contract by offering new contracts on new meters, their lack of service has likely cost you thousands of dollars.

• Avoid penalties. Always check with your consultant or carefully read the terms of your contract before calling your provider to delete meters. Doing so could help you avoid incurring a penalty.

• Reputation matters. A reputable energy consultant representing hundreds of customers often will have enough ongoing clout with energy providers to arrange creative load swaps between clients, expedite issues or navigate unforeseen challenges. We routinely fix problems for our clients that they could never have had the experience, insight or influence to resolve on their own.

The electricity market is always changing which means your purchasing options should too. Managing and minimizing your electricity costs boils down to one word: TRUST.

How to Avoid the Top 10 Most Common Energy Purchasing Mistakes for Schools and Municipalities: Mistake #1

2012-01-11T14:17:00.000-08:00

Most of us are certain of only two things regarding electricity:

· Don’t grab both wires at the same time
· Pay the bill or they cut it off

Beyond these basic truths is often a sea of questions, fear and frustration. But don’t feel bad – it’s by design that you don’t understand our cable, cell phone, or electric bill. These providers gain great profit from your confusion. If you understood your bills and contracts, you could dispute charges and objectively compare offers.

Based on years of experience in this industry, here are the Top 10 Most Common Energy Purchasing Mistakes Causing Governmental Organizations to Overpay:
1. Using a traditional RFP process (a virtual guarantee that you will overpay)
2. Adding or deleting meters to your contract without shopping or considering penalties
3. Waiting until near the end of your contract to start shopping
4. Using Interlocal agreements that do not shop your bids
5. Bundling energy and delivery (regulated wires) costs together
6. Not understanding how “ratchet demand” affects your cost
7. Hunting with a committee
8. Drowning in a pool
9. Signing an energy contract without the advice of a professional
10. Overlooking other savings/income opportunities

This week we’ll be focusing on mistake number one: Using a traditional RFP process.

The traditional RFP process is fundamentally flawed for energy purchasing. This is like going hunting but having to decide weeks in advance at what time you will pull the trigger.

Reasons why this is a mistake:

It’s unnecessary. The RFP process was already conducted and satisfied by several reputable political subdivisions and the State of Texas. These interlocal agreements make an additional RFP unnecessary and a waste of time.

Timing is everything. Energy is the most volatile commodity in the world. Unlike purchasing tires or desks, the price of energy fluctuates every few minutes. Timing is THE most important factor in getting the best price. Pre-selecting an arbitrary date and time to renew will strip you of your greatest tool in achieving the best price.

You’re on your own. RFPs require you to figure out the best available terms without discussing them with experienced pros. Energy bidders will game the system with artificially low offers just to get into the final round of bidding.

Not a good fit. Many of the strongest and most competitive energy companies bow out of RFP bidding altogether because it places too many unnecessary constraints on their standard approved business risk models.

All contracts are not created equal. The rules, offers and parameters for energy contracts can change radically in just one year.

There is no reason that anyone tasked with the challenge of purchasing electricity must take a beating from profiteers in a rapidly changing industry.

Electric monopolies vs. competition

2009-04-23T07:48:00.000-07:00

Contrary to recent misleading headlines and editorials, opening the electric monopolies to competition has greatly benefited Texas consumers and our economy. You now have a tremendous opportunity to control your electric expenses and lock in the lowest rates since before deregulation.

Energy is the most volatile commodity in the world. Prices change every minute. You now have the ability to control your own costs by locking in an electric rate when prices drop.

Imagine if you could put enough gas in your car to drive it for several years; when you filled up your tank would be more critical than where you filled it up. I paid over $4 per gallon for gasoline last July, and by December it was under $1.40 at the same gas station.

Now that prices are down, imagine this: you agree to buy all of your gasoline from the same store for a year or more, and they would sell it to you at $1.40 per gallon, regardless of what OPEC, the oil companies, or speculators do to the market. This is the opportunity that Texas’ electric deregulation has given you.

Texans blazed a new trail with their dereg model, and we are improving it. Thirty new energy bills are on the table this legislative session to strengthen customer protections.

A recent news story by Jay Root used a headline citing a study commissioned by Cities Aggregation Power Project (CAPP) stating that rates were “up 64% since deregulation enacted”. Their study quoted residential prices between 1999 and 2007. The only problem is that retail deregulation began in 2002, and the report also ignores that rates have tumbled through 2008 and 2009 to the lowest rates in years.

The attorneys who commissioned this report refer to themselves as a "non-profit consumer group" and also fail to mention that they have collected millions of taxpayer dollars for bad advice. They now seek to blame the entire system using old and misleading data to dupe an uneducated public. Jay Doegey then wrote an editorial accusing others of the same thing.

He said, "They finance weighty-looking reports and skewed polling data. They hide behind the very complexity of the market in an attempt to explain away its flaws"

This is clear, pure, intellectual dishonesty, Mr. Doegey, and it only contributes to customer confusion. How do you sleep at night? I would like to publicly challenge you to a debate on the topic in person or in print to clarify these issues for the public. Maybe we can do in front of City Managers and taxpayers whose money you have taken.

CAPP’s concern that large energy consumers would relocate their business in other states was also without merit, as quite the opposite has happened. My own large commercial clients can now find deals at or below when dereg began.

Renowned economist Ray Perryman quotes that Texas is leading the nation in job creation, with 58% of all new business investment in the nation in 2007 alone, and the largest portion is in the energy sector. Private investors have pumped over $40 billion into building more than a hundred new generating plants to better position us to continue that growth.

Texas has now surpassed California to become the #1 wind energy producer in the country, making the US the top producer globally. The former regulated monopolies had absolutely no incentive to control costs or invest in smarter, greener technology. With diversification from overdependence on natural gas and a few more customer protections, we will continue to lead the nation in growth and innovation.

(T.J. Ermoian, Jr. is a licensed aggregator and President of Texas Energy Aggregation, a Waco-based energy consulting firm)

Pending energy legislation will save millions for Texas schools and non-profits

2009-04-23T07:23:00.000-07:00

The lights may soon be shining again for thousands non-profit athletic facilities. Little Leagues, schools and other occasional-use facilities have been paying thousands of dollars for electric delivery service, each and every month, even when they use no electricity. Two bills have been filed in this legislative session to address the problem.

HB 1374 by Rep. Charles “Doc” Anderson of Waco and HB 230 by Jim Pitts of Waxahachie would exempt “certain schools and non-profit athletic or sports associations from certain demand charges by transmission and distribution utilities”.

Electric delivery charges are still regulated in Texas, ensuring that meters will be read and poles and wires will be maintained by a single reliable company. Current regulated utility guidelines use a “ratchet demand” rule that affects commercial customers with “demand” meters. Stadium lighting typically uses a high “peak demand”, and if a customer hits a peak just once, they must pay a minimum of 80% of that peak charge, every month, for the next 11 months.

Several little leagues chose to call games on darkness rather than turn on the lights and pay year round to only use them for two months.
T.J. Ermoian, a Waco-based electricity aggregator and consumer advocate, serves several hundred commercial customers including many schools, churches and other non-profits. He has been working on getting the rules changed since the problem came to his attention in 2004.

“We saw one of our little league clients that had to sell the equivalent of 2.5 tons of cookie dough to cover the cost of electric delivery during months with no electricity usage. That time could have been better spent doing homework or playing ball. Nobody understood the rules, and those that did were silent.”

Ermoian contends that the rules, as written, disproportionately affect organizations making some of the greatest contributions to our communities, such as schools, athletic fields, houses of worship, special event facilities, and fraternal lodges. He also believes that the delivery companies have done a poor job of educating customers about the ratchet demand provision while profiting from the confusion.

“Many of these organizations also have annual changes in volunteer leaders, accompanied by fresh confusion, frustration and disbelief each year. Deregulation has allowed them to get a contract for only 7 cents per kWh for the energy, but over the course of the year, they may average more than 10 cents per kWh for the regulated delivery costs. These customers slipped through the cracks in the system. This rule needs fixed and should also include all non-profits using power off-peak times.”

Prior to 2002, when Texas electric deregulation began, such facilities had a special “Time of Use” exemption that gave a break to non-profits that used most of their power at off-peak times on the evenings and weekends.
Ermoian began getting signatures from schools and little leagues and brought the topic to the attention of Rep. Jim Dunnam of Waco. As minority leader in the House, Dunnam chose a stealth approach so as not to alert the powerful lobbies for electric delivery companies such as Oncor and Centerpoint. The language was inserted as an amendment to another energy bill which passed the House in the 2007 session, but was subsequently killed in a Senate conference committee.

Not content to wait two more years for the next legislature, Ermoian brought this issue before the Texas Energy Professionals Association (TEPA). With the valuable assistance of Paul Smolen, TEPA Legislative Committee Chairman, we have now found an audience with the incoming Chairman of the Public Utility Commission Barry Smitherman. They were successful in getting a docket opened to discuss the issue among interested parties. The Texas PUC reports to the Legislature, so it is likely that action will be taken on the issue this year.

UPDATE 4-09
Both Pitts’ and Andersons’ versions of the bill went before the State Affairs Committee for review on March 10, 2009. Mr. Smolen and I were both requested to testify before the committee. Finally, our day had arrived, and I had the choice of testifying on the bill that we have worked toward for so long – or canceling a vacation and airline tickets with family. I collected quotes from several affected individuals and organizations and put these into writing for the committee. I wanted to be there, but time with family is short too, and by now we have many good people on board.

Rep. Doc Anderson has thrown his support behind Jim Pitts’ version of the bill. Rep. Pitts was appointed Chairman of the powerful Appropriations Committee and is in a better position than Anderson to get the bill passed. Harry Truman said, “You can accomplish anything in life provided you don’t mind who gets the credit.”

HB 230 went to the calendars committee and will hopefully head to a vote. Please write your representative in support of this common-sense legislation.

Resources:
· PUC Docket 35855 regarding ratchet demand:
http://interchange.puc.state.tx.us/

· Jim Pitts’ bill: http://www.jimpitts.net/index.php?option=com_content&view=article&id=67:rep-pitts-files-first-bills-for-81st-legislative-sesson&catid=1:latest-news&Itemid=60

· Doc Anderson’s bill: http://www.legis.state.tx.us/BillLookup/History.aspx?LegSess=81R&Bill=HB1374

· T.J. Ermoian Jr., President, Texas Energy Aggregation: Office: 254-751-0364, Cell: 254-723-2231. TJ.Ermoian@TexasEnergyAggregation.com, www.TexasEnergyAggregation.com

· Paul Smolen, Chairman, TEPA Legislative Committee, Fox, Smolen & Associates: (512) 322-9090 (888) 822-9090 smolen@foxsmolen.com

· TEPA President, Saint Clair Newbern IV: Stclair@liveenergy.com

Electric rates in Texas have plummeted

2008-12-22T12:03:00.000-08:00

Rates are coming down in Texas, just like gasoline. When Texas deregulated wholesale generation of power in 1995, there were over 80 new generating plants built, and all of them were natural gas-fired. Natgas was under $3 MMBTU then and it made sense, but now we are overly dependent on a commodity whose price is being manipulated without proper oversight. It went over $12 this summer. It is back under $6 again, after new legislation was passed and pessimistic speculators exited the market. We are now seeing some of the lowest fixed rates again in over 4 years, with businesses getting back into the 6-8 cent range, especially on 12 month deals. If we see the capital market loosen up again, customers with good credit should be able to lock in these rates for 3-5 more years.

For more in-depth discussion on this topic go to my blog below:

http://texasenergyaggregation.blogspot.com/

TJ Ermoian,
President,
Texas Energy Aggregation

Oncor pitches no-hitter against Little Leaguers

2008-09-15T08:30:00.000-07:00

Watching the Olympics made me proud of the young athletes and the great sacrifices that they made along with their families, coaches, and supporters. However, those who make such accomplishments possible are being systematically overcharged for their electric delivery charges in Texas.

Seasonal-use facilities like Little Leagues and schools are paying thousands of dollars for electric service, each and every month, even when they use no electricity at all. Deregulation has given informed customers a great opportunity to control rising energy costs, but state-regulated delivery charges are stacked against many customers, and they need fixed.

Current guidelines have a “ratchet demand” rule that affects commercial customers with “demand” meters. Residential electric meters have what looks like an odometer that measures kilowatt hours. Most commercial meters also have the equivalent of a speedometer, which measures the volume of electricity flowing during any 15-minute period. If a customer hits an unusually high peak just once, they pay a minimum of 80% of that peak charge, every month, for the next 11 months.

Those most disproportionately affected are often those with limited resources, yet these very same organizations make some of the greatest contributions to our communities, such as schools, athletic fields, houses of worship, special event facilities, fraternal lodges, and small businesses. Even more inequitable, most of these non-profit customers use their energy on evenings and weekends, which is “off-peak”, meaning they place no additional strain on our electric grid.

Regulated electric delivery companies like Oncor (formerly TXU) must provide the same equipment and services as for their more profitable customers, but new laws make customers pay a greater cost for new construction and equipment to offset most of that cost.

Oncor has done a poor job of educating customers about this 80% ratchet demand provision, and has profited from the confusion. Many organizations also have annual changes in volunteer leaders, with fresh confusion, frustration and disbelief each year.

One local Little League has chosen to play without lights, calling games on darkness, and creating potential safety issues for children and parents. Their players would have to sell the equivalent of 2.5 tons of cookie dough to cover the cost of electric delivery during months with no electricity usage. That time could be better spent doing homework or playing ball.

I approached State Rep. Jim Dunnam about correcting this situation before the last legislative session, choosing a stealth approach so as not to alert the powerful lobby representing energy delivery companies. Rep. Dunnam was successful in getting proper language attached to an energy bill to remove ratchet demands for non-profit athletic facilities. Although it passed the House, the bill was subsequently killed in a Senate conference committee. Virtually none understood it. Rep. Doc Anderson has also expressed enthusiastic support for carrying such legislation.

Not content to wait two more years for the next legislature, we began circulating a petition among school superintendents and little leagues, and brought this issue before the Texas Energy Professionals Association (TEPA). We have approached the incoming Chairman of the Public Utility Commission and were successful in getting a docket opened to discuss the issue among interested parties. We have now published our own comments, assisted in writing TEPA’s comments, and will continue to aggressively pursue the issue.

Those interested in helping save millions of dollars for Texas taxpayers, schools, athletic associations, houses of worship, performance venues, and other non-profits, can acquaint themselves with the issue at http://interchange.puc.state.tx.us/, Docket 35855 or contact our office at 254-751-0364.

TJ Ermoian, Jr. is a PUC-licensed Electricity Aggregator and board member of the Texas Electricity Professionals Assn.

The stars have aligned...

2008-06-23T06:48:00.000-07:00

I have been crying like a voice in the wilderness about this for over a year and been ignored by the all of the mainstream outlets. I started this blog to help get this story out. This is further evidence of the liberal bias in our press.

For months, John McCain has been the only one of the presidential candidates to talk about speculators as the culprit for high oil prices, but now, apparently, the stars have aligned and the press is picking up on the story, here is why:

1. Billary is out of the race
2. Sen. Obama is talking about it
3. A Republican scapegoat tied to John McCain has been named – Phil Gramm

I predict this will now be considered news. I also predict that this will become one of the biggest stories and scandals of the election year – the fleecing of America. I have been blogging it everywhere. To trace it to its’ source, google “behest of Enron”.

The Enron Loophole and Energy Prices

2008-06-06T14:29:00.000-07:00

I own a successful Texas company that specializes in helping businesses get the best possible electricity rate from dozens of energy providers.

In Texas, electricity prices are closely tied to natural gas prices, so we have been watching the market movement throughout each day since 2002.

Over the last 7 years, our supplies of oil and natural gas have grown equal to or faster than demand, yet our prices have nearly tripled from what they were in 2000. Oil companies are not the cause, but they sit silently by and reap the benefits. Commodities traders are making millions while our national interests are being auctioned off. A 60 page, bi-partisan senate report in June of 2006 confirms the cause, yet it has received little or no media attention. As senators, all three presidential candidates understand the cause.

For decades, the cost of commodities has been driven by supply and demand. Balancing supply with demand of necessary commodities like food and fuel is key to any healthy economy.
Most Americans may not understand commodity futures, so here’s a simple explanation: Modeled by the ancient Greeks, the first modern futures exchange was founded in 1848 in Chicago, bringing together buyers and sellers to agree on prices on future dates and to coordinate distribution of cattle, grain and shipping and delivery of volatile or perishable basic commodities like cattle, grain, or gasoline. By agreeing to a future selling price weeks, months, or even years away, distribution and commerce were stabilized and thrived.

Variables like harsh weather could constrict the supply of corn or increase the demand for heating oil, driving up the short-term prices, and mild weather could drive prices downward. Enterprising financiers would sometimes purchase a futures contract, betting that prices might move up, and then sell that contract shortly before delivery – hopefully at a profit. Although these traders added some padding to overall prices, they also served as a stabilizing factor to absorb some of the risk and volatility in the market. Rules were established and a board elected to oversee trading and prevent organized manipulation of prices. For the next 150 years, U.S. trade and commerce have flourished with only short blips caused by major supply and demand changes.

Fast forward to December 21, 2000; In the final hours of his presidency, along with some highly questionable pardons, President Clinton signed into law the Commodities Futures Trading Act of 2000. Enron had applied heavy pressure to exempt government oversight from electronic trading of commodities and was finally achieved success with this act. One month before, “Enron Online” had been launched to allow electronic trading of energy commodities, and the effect was immediate.

In only a few months, billions of dollars in electronic trading of commodities was taking place with virtually no oversight, and energy commodities futures prices on natural gas, oil, began a sharp, steady climb. Prices collapsed at about the same time as Enron’s demise at the end of 2001, but as Enron’s tricks and traders fanned out into other companies, prices took off again.

International market manipulation
In 2006, the Commodities Futures Trading Commission decided to allow the Intercontinental Exchange, the world’s largest electronic energy exchange, to use its terminals to trade U.S. energy commodities. Now, foreign investors can also join in manipulating our energy markets without oversight of any American regulatory body. It is estimated that over one-third of all U.S. energy trading has no oversight, and Enron is still in the game as it operates DealBench, a remnant of its oversight-exempt electronic energy trading.
It is now estimated that more than half the cost of a barrel of oil goes to futures speculators who are able to make long runs on prices.

The brilliantly devious Bill Clinton left America a parting gift that was certain to get pinned on his successor and pave the way for Hillary. The Bush administration has been negligent in allowing our markets to continue to be manipulated. The oil companies, while likely not the main cause, remain quiet as they profit from the increases.

Anyone with an internet search engine can investigate these facts in a matter of seconds by googling the “Commodities Futures Trading Act of 2000”, or the “Enron Loophole” as the senate referred to it. AmericanThinker.com has one the best articles on the subject.

Oversight of the banking and basic commodities is essential to our economy. Educate yourself, speak out, and vote for character in our leaders, because issues change and politicians from both parties are selling out our beautiful nation to the highest bidder.

TJ Ermoian

Welcome!

2008-05-06T06:23:00.000-07:00

Electricity - we all use it, we all need it, but only an obscure few understand how it is sold, metered, distributed, and what factors affect our monthly energy bill. That's why I have a job.

People want straight talk from an advocate that will take care of details or problems to help them minimize their energy bill.

Most of all, I like knowing that because of the assistance that we gave to a small business owner, we helped make the difference between his company hiring a new person or having to let somebody go. Or the difference of a church being able to support a missionary or having to cut benefits to their staff. Our largest single category of customers is churches & non-profits.

Our advice is free. We just want the opportunity to earn your business and help you get the best energy contract and rate available.

Much more coming soon.

T.J. Ermoian
President
TexasEnergyAggregation.com
254-751-0364