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This hedging strategy is an aspect of the market timing piece of our turnkey energy management solution, Whole Energy Health. Over time, we lock in market lows to build your future contract piece-by-piece. market watch’ is exactly what it sounds like: we watch the energy markets closely every day to identify smart purchasing opportunities. These include Liquified Natural Gas (LNG) exports, NYMEX market, the economy, legislation, historical price patterns, weather forecasts, ISO Locational Marginal Price (LMP), and much more.

With a new focus on sustainability, how could the cost of renewable energy and energy legislation impact retail energy prices? This shift at the federal level has turned an eye onto renewable energy laws. With these changes coming down the pipeline, the cost of renewable energy and its infrastructure could have implications for retail energy prices. At the federal level, experts and analysts believe that the government shift could lead to more aggressive carbon reduction policies.

In states where energy is deregulated, businesses have a choice of who they purchase their energy from: the utility or a 3rd party supplier. If they don’t choose to buy through a supplier, buildings on the grid are automatically entered into the utility’s service program, which is often referred to as ‘default service’ or ‘last resort service’. These are 3rd party suppliers, also referred to as retail energy providers or alternative suppliers, that supply electricity and/or natural gas contracts to buildings on the grid. Although energy deregulation was partly born out of driving down prices by creating market competition between energy providers, when you decide to purchase directly through a 3rd party supplier, no competition for your load takes place.

In broad strokes, let’s say the city was supposed to receive $1,000,000 in credits annually with a 30% discount for the credits being paid to the solar developer. Per the original terms and usage patterns, the city would pay $700,000 annually for the $1,000,000 in credits, saving 30% or $300,000. In this situation the initial savings of $300,000 actually turns into a net even exchange ($1,000,000 credits – $300,000 savings = $700,000 credits – $700,000 actual costs). Although they could roll those $300,000 extra credits over, their fiscal year was coming to an end in June and, even with the virtual net metering program in place, they were ultimately paying the same amount since they were still paying the developer for their credits in addition to their own energy bills.