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“CQI Associates Energy Currents” January 2011
Market rates for electricity and natural gas have been dropping to record lows this fall. Compared to the prior three years, electricity and natural gas prices are 18% and 45% lower, respectively. Members of the commercial and electricity cooperatives managed by CQI Associates have been able to lock into contracts equal to and in most cases lower than the prior contracts issued in 2008 and 2009. Energy rate budget stability and savings for most of our clients extends to 2013; a favorable outcome as we all struggle with the slower than anticipated economic recovery.
However, I have observed in the past four weeks the first solid and sustainable increases in market rates that may be a sign that rates will begin a slow but steady increase over the next 12 months. We expect rates to increase by 7% based on current data. If industrial production increases and energy demand increases, especially for natural gas, prices will go up even more than projected.
Energy Tip of the Month:
Businesses and homeowners who have florescent light fixtures that use T-12 bulbs have until December 2011 to convert them to the current T-8, T-5, or LED light bulbs. T-12 bulbs will go out of production this year. After January 2012 it may be difficult to find the bulbs and by 2013 we do not expect any options other than to replace the fixtures. Now is the time to consider replacing the fixtures. Two benefits of this are: a 12% reduction in energy costs this year, and qualification for utility EmPower Maryland program, if the fixtures are replaced in 2011. The incentive can be up to 80% of the cost for qualified small business customers located in the distribution service areas served by BGE, PEPCO, Allegheny Power, and DELMARVA. An additional benefit is the reduction of mercury in landfills from disposed T-12 bulbs.
If you have any comments or questions send them to me at email@example.com.
Richard Anderson, Principal, CQI Associates