RoundRockPower No Comments

What is a Provider of Last Resort (POLR?)

So you’ve received a notice that you will be switching to a Provider of Last Resort and now what? Well, the Provider of Last Resort is who will be temporarily taking the place of your current electricity provider. Why? Because your current electricity provider is no longer in the market of providing you with electricity. The Provider of Last Resort ensures that there is no interruption of electricity service to your business or home. Think of the POLR as a backup parachute, you appreciate that it is there but hope that you never have to use it. The Provider of Last Resort is high-priced due to the risk of taking on an uncertain amount of customers and an uncertain amount of electricity loads. The current POLR rates are approximately two to three times the current market rates.

Who decides who the Provider of Last Resort is?

The Public Utilities Commission of Texas (PUCT) decides which certificated Retail Electric Providers will be the Provider of Last Resort.

How do I know this is not a new scam?

The Public Utilities Commission of Texas (PUCT) will be contacting you by mail, e-mail, and/or phone to inform you. Your current provider or broker might also reach out. But always ask for a call back number or PUC registration number and verify it. Or call us 512-240-2929.

What should I do know? I don’t want to use a POLR.

Give us a call, send us an email or fill out the quote request. We are here to help you in every way we can to maximize your electricity savings and mitigate and risks.

Learn more about POLR policies in case your REP goes out of business, you are welcome to read this document from the Texas PUC.

RoundRockPower No Comments

Predominate Use Study

Stop Paying Sales Tax on Your Company’s Electricity: Get A Predominant Use Study.

Do you want to stop paying sales tax for your company but not sure what you need to do to get exempt or even if you would qualify to be exempt? Well, you would need to get a predominant use study. And yes, we can help you with that.

What is a predominate use study?

A predominant use study is an audit or evaluation of your company’s electric and/or natural gas consumption. That then determines if the majority (over 50%) of your consumption is used during the production of product(s) or residential property for sales-tax exempt purposes. If you qualify for sales tax exemption with the study, you then get a certificate. This certificate is important because is provides proof to any government entity or organization that you qualify for sales tax exemption.

Refund!

Let’s talk about getting some money back! If it is found that you qualify for sales tax exemption then you might qualify for a refund of up to 4 years (48 months) back. And yes that is something that is handled as part of the use study. Then, moving forward the predominant usage study also proves to the utility the company is eligible for the refund. In addition, the government now has proof that the company is legally eligible for sales tax exemption on their electricity.

What types of companies are eligible for sales tax exemption?

Commercial:

In the state of Texas there is an incredibly wide range of manufacturing companies are eligible for sales tax exemption on their electricity bills. Some of the manufacturing and fabrication industry include, but are not limited to:

  • Agriculture
  • Audio Recording Production
  • Bakeries
  • Beverage Processors
  • Chemical Plants
  • Clay Shops
  • Electronics
  • Food Processors
  • Golf Courses
  • Horticulture
  • Medical Devices
  • Mining
  • Oil & Gas
  • Pharmaceuticals
  • Print Shops
  • Refineries
  • Steel Mills
  • Textile Operations
  • Video Recording Production
  • Wood Shops

Residential:

When it comes to residential, there are also many eligible to receive the sales tax exemption. Some of the buildings include but are not limited to:

  • Apartment Buildings (with a master meter)
  • Assisted Living Facilities
  • Condominiums (with a master meter)
  • Mobile Home Parks
  • Nursing Homes
  • Retirement Homes

How Can I Become Sales Tax Exempt?

Well, by law, the only way for a company to become exempt in Texas is to obtain the Predominant Use Study (see the Texas Administrative Code, Title 34, Rule §3.295). In Texas “a registered engineer or a person with an engineering degree from an accredited engineering college” is the one to submit the results of the study to the appropriate utility. And to become sales tax exempt you must prove that you use at least 50% of your electricity consumption for the manufacturing business or residential property is consumed during the production of the product(s).

Ready to move forward?

Contact us today! We work with a trusted partner to get you the predominant use study you need to be certified and get your money back.

RoundRockPower No Comments

Why should businesses use an energy broker?

Whether you are a Small, Medium or Large business in Texas a respectable and independent energy broker and consultant can prove to be valuable to your business. With growth in the energy markets and multiple options available to you, it can be complicated for companies to chose their best option to mitigate their energy risks and expenses, therefore using an electricity broker has become a necessity for companies who value their time.

An energy broker acts as a middle person between the energy suppliers and business. Their role is to obtain the best contract and electricity option for their clients. However what does an energy broker offer that makes them so vital to any business?

Energy Brokers have a deep understanding of the energy market and brokers like Power Round Rock constantly monitor gas and electricity market prices, enabling our clients to make an informed business electricity buying decisions.

Retail Energy Suppliers are more likely to offer a competitive prices to a broker, because not only do they know they are competing for the business, but also because they know competitive pricing through a broker will get them the opportunity for more business from the broker. This competitive adge will bring down the provider’s profit margin and ultimately lower your electricity cost.

In addition electricty brokers and consultants like Power Round Rock ensures that their clients can focus on the day to day running of their business, so they provide on-going support and deal with any questions, changes or issues that may ensue in running a business.

Sounds good? Then contact us today and we can save you and your business money and time.

Texas Nodal
RoundRockPower No Comments

What is Nodal

Nodal History

On December 1st, 2010, the Texas electricity Grid changed to a revolutionary new design that took it from what the industry knows as “Zonal” to “Nodal”. The development of this project began back in September of 2003 when the Public Utility Commission of Texas (PUCT) required the implementation of a new market design. From 2003 to 2010, a lot of work was done to create a market that serves Texas electricity customers better than ever.

 

How It Works

This means that generators, utilities, retail electric providers and customers will buy and sell power based on a much more specific region of the state and have costs (such as congestion charges) distributed much more fairly as well.

With this new way of managing the power grid, resources such as cheap wind power in the West Zone, cheap nuclear power in the South Zone and cheap coal power in the Houston electricity zone will be cheaper to distribute nearby and more expensive to distribute farther away.

With the old system, there was no way to send electrons from one generator to an area any more precise than the whole zone (e.g., West Texas). With the new system, for example, the STP Nuclear facilities 90 miles southwest of Houston can dispatch generation to a specific node(s) in Houston rather than simply the entire Houston Zone. With the new nodal system, power generation will benefit all of the customers, including residential and small commercial, and as a result of generation facilities being dispatched into the market and onto the grid at a much more nodal level as opposed to just turning on a generation unit for an entire zone. Why? Because the congestion costs will be reduced, and that affects everyone that buys power in deregulated markets.

 

How has the Zonal to Nodal transition affected your electric bill?

For most consumers, it hasn’t. The PUC of Texas ordered that any customer under 50 Kilo-Watts of demand should not have any additional charges passed-through. So, while over time you will see the market reflect the costs or savings associated with Nodal, nothing is going to change on your bill. However, for customers that have a demand greater than 50 KiloWatts (which translates into a monthly usage of approximately 15,000 KiloWatt-Hours or $1,000 – $1,500/month depending on your electric rate plan), there will be changes to your bill.

Most energy providers have a “change in law” provision for customers over 50KW. This Public Utility Commission of Texas has agreed that Zonal to Nodal constitutes a change in law giving Retail Electric Providers the right to pass-through this added cost. Good thing too, because if that didn’t happen many providers would have gone out of business in 2010 (as it was, some still did as a result of unpreparedness for costs related to Nodal). Different Retail Electric Providers in Texas will be accounting for nodal costs differently on their bills. Some of the differences are related to what type of energy product you are on (MCPE with or without fixed adders, fixed price with pass through, heat rate with pass-through, etc).

 

Nodal Specific Terms You Should Know:

RUC (Reliability Unit Commitment) – This is the cost incurred as a result of ERCOT ordering specific electricity generation units that are offline to turn on to maintain grid reliability when there isn’t enough generation online to meet demand. The cost is paid to ERCOT directly by a QSE (Qualified Scheduling Entity) at a formulaic rate that is inherently higher than where economic offers have recently cleared for other generation already online. The charges paid by the QSE are passed on to the Retail Electric Providers and are either absorbed or passed-through on your bill, depending on how your electric company has prepared for Nodal or depending on your preference if you want it passed through or included in your Kwh rate.

Trade Hub to Load Zone – This is often referred to generically as “Nodal Charge”. This is basically the price difference between energy price at the source (the generator) and energy price at the destination (the load zone, which is an average price of nodes in a zone).

 

In conclusion: Zonal to Nodal & You

The shift of the Texas energy market from a zonal to nodal design was one of the most influential changes since the actual deregulation of the Texas market in 2002. This change is yet another way that Texas customers can experience innovation when it comes to buying electricity. And if you are looking for the best rates contact us!