Monday, August 31, 2009

Stop Air Leaks for an Energy Efficient Home

Summary: Air gets into and out of our homes from a wide range of places. Many of these can be fixed with some simple do it yourself handiwork. Undertake any of these and you'll start to realize instant energy savings on your Texas electric bill.

According to the U.S. Department of Energy, American homes lose energy from the following places (in decreasing order of importance): floors, ceilings and walls (31%), doors and windows (21%), heating/air condition ducts (15%), fireplaces (14%), plumbing penetrations (13%) and all others (6%). Recognize that these numbers may vary based on home type, age, geographical region and other factors.

For some of these problem areas, better insulation or more energy efficient windows or doors may yield significant savings on your Texas electricity costs. But, these can be costly. Instead, why not take a few simple steps to eliminate those pesky air leaks plus go to and sign up for a lower rate.

One of the easiest things one can do is recaulk windows and doors. In addition to eliminating air leaks, this can also eliminate water leaks. To do this, first remove existing caulk (don't just recaulk over existing caulk). You may need to use a putty knife, a window scraper, other blunt scrapper tool or even a screwdriver to loosen and remove the caulk. Be careful not to gouge the framing. Then clean the entire window or doorframe with rubbing alcohol or other cleaning compound to ensure good adhesion.

Reapply caulk (pushing the bead to ensure it gets into gaps). Be sure NOT to caulk window weep holes (small holes at the bottom of the window that allow for any condensation to drain). It's best to apply the caulk when outdoor temperatures are between 50 and 70 degrees Fahrenheit. In most locales, this is when most building materials are at the midpoint of their contraction and expansion range.

Choose the type of caulk and color that is best suited to your home and any associated remodeling activity. But in most cases, a paintable, light-colored caulk is what you'll want.

What works for windows and doors, also applies to skylights and any other places where gaps may occur. This can include places where air conditioning, phone or electric lines enter your home. You can now find special cover plates that be placed over the once massive caulked or sealed areas. You'll still need to seal these, but it looks a lot more attractive.

In your attic, crawl space and/or basement, you should plan to seal all air conditioning and heating ducts. Instead of caulk, however, duct tape can be used to seal seams of exposed ducts.

An even better approach (one that can reach all ducts) involves injecting an aerosol sealer into the ductwork. During the course of the process, the sealant collects at any leak sites, sealing them.

Finally, address weather stripping along the bottom of doors and windows. This can become brittle and/or damaged over time. Sometimes you can simply slide in a replacement piece. At other times you may have to tip out the window or remove the door from its hinges and then physically remove and replace the entire weather stripping unit.

Another easy-to-do sealant project involves eliminating leaks around electric outlets or switches on outside walls. Turn off electricity and carefully remove switch plate or plug covers. Feel for air leaks (especially in colder months). Then use foam inserts to cover much of the opening. You may also want to stuff insulation into gaps along the outside edges of the electric box or spray in some foam sealant. Wait a few moments and feel again for air leaks.

You can also undertake some temporary fixes, but nothing beats fixing leaks outright. Once you do, you'll start saving real money, really quickly on all of your Texas electric costs.

Friday, August 28, 2009

New Rules for Texas Electric Deregulation

In August of this year, state regulators have tightened the reigns on guidelines and rules for Texas electric retailers that deeply benefits the consumers and makes retailers face stricter financial standards to remain in operation. From the implementation of these new rules, Texas electric customers will be allowed a 14-day minimum notice before their contracts expire. Additionally, the Texas Public Utility Commission reduced the time it takes to change electric providers from up to 45 days to no more than 7.

Texas regulators decided to make these deregulatory changes in a direct response to problems stemming from last summer's loss of several electric companies after the wholesale power markets spiked. Loss of such companies caused Texas consumers to switch to plans with other electric providers, sometimes at significantly higher rates. It is worth mentioning that this occurred during some of the hottest weeks of 2008.

The New Rules

In order to remain in compliance with the new industry standards, electric retailers will now be required to maintain at least $1 million in equity. Additionally, they will also be required to show proof of investment grade debt ratings or that they hold at least $500,000 letters of credit. (Before, it was just $100,000.)

The changes don't come to just financials, either. The new rules also stem into the management branch of the electric companies. It is now required that company management have a specified amount of experience (in years) in the industry. To tighten the rules even further, regulators have mandated that someone on the Texas electric company staff must also have experience in both risk management and commodity hedging.

These requirements are based on the fact that many of the companies that went out of business in 2008 relied too heavily on a balancing market. The Texas power industry, though relatively small, can be quite volatile with drastic jumps. These businesses lost when they posted collateral based on the market which jumped causing the capital requirement to spike as well. It was a challenge that a handful of electric companies simply were unable to meet.

What Customers Will Note

The new rules for Texas deregulation will not only affect customer rights and companies from being sucked into the virtual black hole of a fluctuating market; it will affect the wording on their contracts and bills as well. Part of the new rules requires that the contract expiration be clearly explained and identified. The rules also require companies to clearly spell out fees, costs, and electric rates right on the monthly bill.

Though some Texas electric companies won't have to do much, as a few have already adopted such tactics before the rules became official, others will have plenty of work before them. The standardized communication will help consumers become better customers and improve their ability to compare one electric company to another.

What the Texas Public Utility Commission Does

The Texas Public Utility Commission (PUC) is responsible for regulating terms and rates for intrastate transmission services and distribution in relation to customer choice. It also monitors and oversees the market, fees, and industry standards. The PUC is also responsible for protecting the consumer through the adoption and enforcement of retail competition and renewable energy rules.

Wednesday, August 05, 2009

How Texas Electric Deregulation has helped Texas businesses and consumers

Texas Electric deregulation in Texas came into effect as of January 1, 2002. The deregulation itself is going to be phased in over several years, but the result of the deregulation itself is that most Texas power customers can choose where they get their electricity from, from a number of what are called "retail electric providers," or REPs. The so-called "incumbent utility" in an area still maintains and owns the powerlines, and it's the one you call if there is a power outage. That particular company is not subject to deregulation. To date roughly 85% percent of industrial and commercial customers have taken advantage of deregulation by switching providers at least on one occasion. Over 50% residential customers have taken advantage of the deregulation to switch to a competitive REP. What's so special about deregulation? Deregulation ensures that no single buyer or seller is going to have an unfair advantage in the market, basically a sort of "anti-monopolization" movement that helps ensure competitive pricing on Texas electricity.

Within deregulation was a concept known as the "price to beat," or PTB, a regulated rate concept that determined the pricing behavior of ex-utility providers. Typically, prices would have been determined by a transparent market and in fair fashion, not by an academic or political body. However, this wasn't quite going to work in Texas' deregulation, because incumbent electric companies could instantly cut their own prices to beat those of new deregulation entries, therefore in effect preventing competition and continuing in the monopoly. To that end, the deregulation in Texas also had a phase-in period whereby a price floor was established for incumbent electricity companies so that this sort of continued monopolization could not occur and new competitors could become established themselves. This was to last until January 1 of 2007.

Benefits to businesses: No bottlenecking, no loss of profits by being "down"Deregulation helps ensure that "bottlenecking" won't occur such as happened in the 2003 North American blackout and in California's electric crisis. And of course, this benefits businesses because they don't lose profits by going "down," as is inevitable during the times of these types of outages. With the Texas electric market deregulated, new firms have been able to enter into the marketplace, thus helping ensure an end to bottlenecking. Specifically, more than 60 startup firms have been established to date, nearly equally split among firms that are almost entirely focused on commercial usage and those that are focused on residential usage. In addition, deregulation has been of benefit to consumers because aggregators have advocated for consumers to negotiate low rates on the markets; these lower cost than get passed on to consumers with lower pricing.

With last summer price rises, is deregulation still a good deal? Spikes in Texas' electricity prices lst summer caused many to question deregulation's impact in a positive sense. However, even though previous assertions that deregulation would lower prices for businesses and consumers, more competition has probably meant that prices themselves HAVE indeed remained lower than they would had deregulation not been instituted. It should also be noted that wholesale electricity prices actually took a drop between 2005 and 2006, several years after the inception and implementation of the deregulation. In addition, even though some electricity comes from (currently cheaper) coal plants, Texas electric companies have to set their prices at the higher natural gas production level, because natural gas power plants are needed to supply growing demand. And again, as demand grows, natural gas is going to become an increasingly important supplier of electricity.

What cost savings has this had for consumers and businesses? When deregulation was implemented, prices are still somewhat less than they would have been had deregulation not occured. In addition, it should be noted that electric companies are still absorbing some of the price increases, since prices went up for customers an average of 43% between the years of 2002 to 2004, even though input costs, such as those from natural gas, rose by 63%. Therefore, you can see that some of these costs have been borne by the electric companies and not consumers, because of the increased competition. With the Price to Beat Program enforced through January 1, 2007, new competitors could enter the market safely without fear that incumbents would undercut them in price. This has also controlled prices and increased competition. And of course, that benefits both businesses and consumers because with lower Texas electric prices to pay, businesses can keep their own overhead costs low, and pass the savings on to consumers.

Environmental impacts: Deregulation has also allowed businesses and consumers to begin to take advantage of more environmentally friendly electricity suppliers, such as the wind turbine companies that have begun to jump on board. What this means, of course, is that these businesses have impacted the environment favorably -- but have been able to participate entirely because of the deregulation, which they may not have been able to do had it not happened. As of 2006, Texas surpassed California in its use of clean electricity generated from wind turbines. Other alternative energy sources are also in development, including solar and hydropower, biomass, and landfill gas.

Less electric consumption altogether - As electric prices have risen (even though, as stated previously, they would have arguably risen more in a market dominated by incumbents with no competition), consumers and businesses alike have jumped fully into conservation mode. This is something that may not have happened were electric prices not to have risen so substantially. And with businesses modeling this type of good behavior to consumers, this is truly responsible behavior that can only bring about good overall.