What does deregulation means to my business?

If you are asking yourself this question, you are not alone. Many people don't understand how to it works and more importantly how to benefit from it.

Deregulation in Texas may be slightly different than deregulation in other states, but the principal idea is to bring prices down by giving you alternative providers. Just like telephone, cell phone and long distance services have in the last couple of decades.

I know deregulation works. I was paying a big amount of money per month 15 years ago for international calls to Mexico, but now pay only a few pennies per minute. If I get the right promotion I can get a bulk amount of minutes included in the regular price of my phone service.

Just like in the telephone deregulation scenario, you need to keep your eye on the market for opportunities. Evaluate the rates, contract term length and termination penalties. This last one, Termination Penalties, is a particular area to consider if you are planning to move or to close a branch office.

Unlike telephone services, the energy business can't make up discounts based on the latest feature or craze, instead the difference in price comes mainly from their ability to purchase energy at a low rate and sell it to your with a marginal markup (their profit).

So, how do you find opportunities?

In the energy market opportunity are directly related to the cost of producing energy, which for all intents and purposes is driven by the future market for Natural Gas. Not all energy is produced with natural gas, but it is common practice among energy retailers to price their offerings based on the cost of Natural Gas for each of the months in your contract.

They look at today's price for Natural Gas "Future" on Wall Street for each month in which you are requesting service (quote), then factor in the price of getting energy to your office or business, they add their margin and give you the magic number.

Given the above process, if the price of Natural Gas is going up in Wall Street you can be sure the price of electricity will do so too. It works the same way on the way down.

Like any commodities market the price of Natural Gas fluctuates daily, actually is fluctuates all day long (during market hours). You can see a recent energy price chart on our home page.

Now, the "Futures" market for Natural gas has contract for every month in the future for the next 10 years, and they are prices independently from each other based on available production expectations, so hurricanes season and summers are usually higher in price because production may be disrupted by a Hurricane and because there is more demand for Energy in the summer, which drives demand for Natural Gas.

Contrary to that factor, there is less demand in the winter (even if you use Natural Gas for your furnace), unless forecasters anticipate an unusually cold winter.

In order to find opportunity, you need the following factors coming together:

• Timing.. Best timing is when you are opening a new location or your current contract is up with-in the next 3 months, or you are currently on a month-to-month plan.   TIP:You can get a contract for energy service that doesn't start immediately; it can start up to 3 months in the future.
• Market Conditions.  If the market is going up, you may want to secure an energy contract as soon as possible. If the market is going down, you may want to wait a little. But DON'T wait until last minute for service to a new location.

For your existing locations, you will be requesting a "Switch" of Retail electric provider. A switch would take place on the day your meter is read (normal schedule), so you need to get a contract at least 45 day before the end of your current contract.

For a new location the service can start on a preselected date, but you should allow at least 3 to 5 business days for your new Retail Electric Provider to submit the order to start your service. If you wait for last minute and you need the service started in less than 3 days you may have to pay an "Emergency" hookup service fee. So plan ahead.

You know when your current contract expires or when you are moving into a new location; now you just need to check if the Natural Gas market is going down or up. If the market is going down and you have plenty of time, you may want to wait and see if the price drops a little more before signing a contract. If the market is going up, and you are with-in 3 months of your current contract expiration or your move in date, you may want to sign the contract now with a "Delayed" start set for the date your contract expires or you move into the new location.

A note on new locations, you need to wait until you have the lease agreement in place before requesting service, this will keep you from having cancelation fees charged if you don't actually move in after all.

With this new knowledge at your service, check your Timing. If the timing is favorable, request a fully automated quote using our web site and see if the market is smiling for you.

There is no obligation, and there are no pesky sales calls. Just you and the computer.

If you have questions we will be more than happy to assist you by e-mail or by phone at 1-800-MyEnergy during business hours.