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Who is affected by deregulation?
What does deregulation mean for businesses?
Will deregulation mean lower electric prices?
What makes electricity different from other commodities?
What is aggregation?
What is an aggregator?
What experience does AP have with the deregulation?
Should businesses adopt a wait and see approach in this new market?
What should businesses do to secure the best rates and terms and conditions possible?
How do I aggregate my electric load to save money?
Why should I join AP?
Why should I join AP if a retailer has already offered me a good price?
Why should I join AP instead of another aggregator?
What are the steps in AP’s competitive procurement process?
Why should I pay for profile analysis?
Once I join AP, who will bill my electric usage?
Who do I pay?
Will there be a switch gap?
What happens if my power goes out?
How does a business join AP?
Who is affected by deregulation?
All customers of TXU, Reliant (HL&P), CP&L, WTU, and TNMP and any other investor owned utility. For now, businesses served by rural co-ops and municipally-owned utilities are not affected.
What does deregulation mean for businesses?
In 1999, the Texas Legislature deregulated the Texas electric retail industry starting January 1, 2002. This means that businesses now have the ability to shop for electricity to secure the best rates possible.
Will deregulation mean lower electric prices?
Deregulation may or may not mean lower prices. It will mean, however, that there will be good deals and bad deals. Larger consumers are in a better position to secure lower rates than smaller consumers.
What makes electricity different from other commodities?
Unlike almost all other commodities, electricity cannot be stored, but has to be used when it is generated. This means that there is significant risk for power suppliers. This accounts for one of the fundamental truths about the electric market—it is about risk and risk management for all the parties involved. In the new Texas retail market, these risks will be borne by consumers who do not negotiate a contract with a retailer.
What is aggregation?
Aggregation occurs when a group of entities join together to purchase electricity as a group, thereby securing better contract terms than individual members could procure on their own.
What is an aggregator?
Aggregators are entities that assemble customers together to seek better deals than the customers could get on their on. An aggregator may not take title to electricity except in very limited circumstances. Aggregators work with members and negotiate for them to obtain the best deal possible. Perhaps the closest analogy is a buyer’s agent in a real estate transaction.
What experience does AP have with the deregulation?
AP staff provides professional support to Public Power Pool, which negotiates electricity contracts for over 100 local governments in Texas. These contracts save the members over $38 million annually compared to previous rates and are negotiated using the same techniques available to AP members. Not only do these governmental entities save money, but they will receive their electricity under highly favorable terms and conditions. AP staff also placed local governments in the pilot program, saving them an average of 16% on their electric bills.
Should businesses adopt a wait and see approach in this new market?
Absolutely not. The time to act is now and businesses who are not prepared and do not negotiate favorable contracts for electricity risk putting themselves at a competitive disadvantage.
What should businesses do to secure the best rates and terms and conditions possible?
Businesses should begin by understanding their electric usage and investigating possible options. One option that appears to produce very good results is aggregation.
How do I aggregate my electric load to save money?
Businesses can aggregate their electric demand by joining an aggregation project, such as Association Power, LLC, or AP.
Why should I join AP?
AP brings expertise and a proven track record in the new market—unique assets that can benefit your business. AP knows that aggregation works and how to do it to maximize the benefits.
Why should I join AP if a retailer has already offered me a good price?
Electricity contracts are about more than just price—they are about risk management. AP’s proven competitive procurement process minimizes risks for all parties, resulting in better pricing.
Why should I join AP instead of another aggregator?
AP has three distinct features that are not widely available in the marketplace.
Proven performance: AP staff has negotiated contracts for millions in electricity in Texas, savings its customers over $50 million
No cross-subsidization: AP uses an unique methodology to avoid cross-subsidization of savings, meaning that you receive the full benefit of your load profile instead of the average benefit available to all members of an aggregation
No surprises: AP members know their total electric costs at all times, meaning that members are fully informed and can make rational business judgments.
What are the steps in AP’s competitive procurement process?
AP uses a four step process to procure electricity at the lowest rates and under the best terms and conditions possible.
-AP gathers load profile data for all of its members and analyzes that data to group its membersinto various pools based on their load characteristics. These pools will be grouped into blocks,which will be how the contract is awarded to retailers.
-AP sends notice to its members that it intends to seek bids from REPs in 20 days. The notice willinclude a minimum savings projection. AP members have 20 days from the date of this notice to withdraw from AP or they are bound for the procurement cycle.
- Once the 20 days pass, AP will seek bids from REPs and begin negotiating with a short list ofsuppliers to improve pricing and terms and conditions.
-Throughout the negotiation process, AP members will be kept updated on the status of contract negotiations. Once AP members feel comfortable with the terms and conditions being offered, AP will time the market to find an opportune time to execute a contract for its members.
Why should I pay for profile analysis?
Electric rates for each electric meter are based upon the load profile for that meter. By obtaining the load profile analysis, you will have the information necessary to shop the market on your own if you should choose to do so. You will also have what is necessary to evaluate proposals from suppliers. The cost for this is $30/meter.
Once I join AP, who will bill my electric usage?
Your electric bill will continue to come from one of the registered Retail Electric Providers (REP) in Texas.
Who do I pay?
You will pay your electric bill to the REP who was awarded your contract. The AP aggregation fee will appear on your billing statement as a line item, similar to a tax. The REP will collect this fee when you mail your payment and forward the aggregation fee to AP.
Will there be a switch gap?
AP cannot guarantee that there will not be any problems when accounts switch from one REP to another. Our experience tells us that there were many problems at the beginning of deregulation with accounts not switching on time, or billing statements not being received for months after contract initiation. Our most recent procurement resulted in a 98% switch rate and members received all billing statements within the time allotted for the contract. AP monitors the switching and billing process for our members to ensure compliance with all contract terms.
What happens if my power goes out?
If you lose electricity due to a downed power line or any other mechanical failure you should contact your transmission and distribution service provider (TDSP). Be sure to tell the person answering the phone that your provider said to call them directly. You will need to have the address of the location experiencing difficulties, as well as the ESID number when you contact the TDSP.
How does a business join AP?
Businesses join AP by signing an Aggregation Agreement which grants limited agent authority to AP to learn about your electric load, to act as your agent for the purchasing of electricity, and paying initial fees.
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