CAI-NJ Feb. 2019

ENERGY... from page 22.

For example, variable rate contracts and contracted usage limits could result in higher-than-expected charges. Factors Affecting Rates Many variables determine how util- ity rates are set for one association

or cooperative versus another and no two buildings are alike. First, the base price of electrici- ty in PJM (the regional transmission organization for the Northeast) and most other power pools throughout the country is usually established by the price of natural gas (NG). Even though NG prices are relatively low now, it is the highest-priced fuel used to generate electricity in PJM. Additional factors affect each custom- er’s specific pricing, including capacity, transmission and lines losses. Capacity charges are determined by the five highest hours of usage in PJM from June 1 through Sept. 30. The average demand of an account over these five hours is known as the peak load con- tribution (PLC). Typically, the five PLC hours occur on hot summer afternoons between 3 and 6 p.m. Therefore, it’s important to minimize electric usage during these times if possible. Similarly, transmission obligations are calculated during utility peak hours, but on a cal- endar-year basis. Line losses depend on the service voltage from the local utility on an account. Line losses for primary service (high voltage) customers are about 6 percent less than those for secondary (normal residential voltage) service customers. Credit is another factor. If an asso- ciation has fallen behind on its utility bills, this creates some risk, which suppliers will build into the rate. State taxes or tax credits are also added in, depending on the state and the customer’s business category. Proactive Measures Organizations can use demand response (DR) programs to help lower CONT I NU E S ON PAGE 59

Suppliers offer many different types of rates, and if a manager is not careful, the energy could end up costing sig- nificantly more than was anticipated.

tech touch value LEVERAGING TECHNOLOGY TO STREAMLINE COMMUNICATION, OPERATIONS AND REPORTING. CULTIVATING RELATIONSHIPS TO ENSURE HIGHLY SATISFIED ASSOCIATION RESIDENTS AND STAKEHOLDERS. PRESERVING AND ENHANCING VALUE THROUGH BEST-IN-CLASS SERVICES.

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Financial services Management services Communication services Construction & maintenance management Transition management services Emergency management Consulting Community Association Management

To learn more, visit IntegraMgtCorp.com or call Edward San George, MPA, PCAM at 973.770.1500 .

Corporate Office:

South Jersey Office:

364 North Main Street (Route 9), Suite 5 Manahawkin, NJ 08050 T (609) 660-0208

200 Valley Road, Suite 203 Mt. Arlington, NJ 07856 T (973) 770-1500

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