{"id":529,"date":"2012-12-06T08:25:47","date_gmt":"2012-12-06T14:25:47","guid":{"rendered":"https:\/\/allenergyconsulting.com\/blog\/?p=529"},"modified":"2012-12-06T09:23:35","modified_gmt":"2012-12-06T15:23:35","slug":"trashing-of-qe-plug-in-energy-wasted-mechanism-to-choose-power-providers","status":"publish","type":"post","link":"https:\/\/allenergyconsulting.com\/blog\/2012\/12\/06\/trashing-of-qe-plug-in-energy-wasted-mechanism-to-choose-power-providers\/","title":{"rendered":"Trashing of QE – Plug In Energy Wasted? – Mechanism to choose power providers"},"content":{"rendered":"

A very poignant <\/span>article by Citi<\/span><\/a> supports my underlying thesis that QE will not be effective enough to outweigh the long-term implications.\u00a0 In summary the article highlights the adaption of people.\u00a0\u00a0 The reduction of yield creates multiple choices, not a single choice of investment.\u00a0\u00a0 Case in point is the VIG ETF, those stocks with high dividend are being rewarded as they have been seen as the \u201cnew\u201d investment vehicle relative to the treasury.\u00a0 <\/span><\/span><\/p>\n

\"\"<\/a><\/p>\n

As noted in the article; \u201cIt seems that the market is sending clear signals to companies “if you want your shares to outperform then distribute, don’t invest.<\/strong>” I would also add the traditionally larger and stable stocks are given an extra \u201csafety net\u201d as one could consider them too big to fail and we have seen what the government does for those types of investments.\u00a0\u00a0 My own investment habits have changed and I am to be a \u201cproud\u201d owner of VIG as I just can\u2019t have my money \u201cSAFE\u201d earning less than 1% in the bank.\u00a0 Also not noted in the article is the explosion MLP traded stocks.\u00a0 These stocks are forced to distribute earnings and investors are diversifying their portfolio with this type of stock as they give you significant yield.<\/span><\/span><\/p>\n

QE is borrowing from the future growth.\u00a0 In some sort of selfish way one could justify it, assuming it was producing enough bang for the buck to reduce the near term misery in order for the future to have growth.\u00a0\u00a0 However, I believe time will show that it will not be worth it.<\/span><\/span><\/p>\n

On a lighter subject matter I came across <\/span>this article<\/span><\/a> largely from a tweet indicating \u201cwasted\u201d plug in power.\u00a0\u00a0 What I found fascinating is the number one plug-in was aquariums.\u00a0\u00a0 I consider myself an aquarist.\u00a0 At one time I had almost 10 aquariums active in my house with a large 75 gallon salt water tank.\u00a0\u00a0\u00a0 I had to get rid of most of them as I have become very busy.\u00a0 The \u201cwasted\u201d statement really struck me.\u00a0\u00a0 To put the connotation of waste on using energy to have an aquarium is questioning discretionary entertainment.\u00a0\u00a0<\/span><\/span><\/p>\n

Many would consider driving to a theater \u2013 whether movie or play \u2013 a waste of energy and money.\u00a0 In addition in the grand scheme of things in order to have something that entertains you year round, the energy portion of the bill is around $250 a year (2190kwh *0.15-0.10 $\/kwh).\u00a0 A true aquarist would tell you the energy portion represents a very small part of your cost structure. \u00a0\u00a0They also note the high consumption of video game consoles XBOX and PS3.\u00a0 Of course the footnote on those are assuming you left them on 24X7.\u00a0 If we assume a more reasonable level of half that time we are looking at entertainment cost of less than $80\/year.\u00a0\u00a0 This amounts to much less than a weekly trip to Starbucks.\u00a0\u00a0 I do agree with their one conclusion \u201cIndividually, the energy-savings opportunities of any given single plug load tend to be relatively small; only in aggregate do efficiency gains really start to make a difference.\u201d\u00a0\u00a0<\/span><\/span><\/p>\n

My other conclusion from the report is to highlight the value of electricity and how it has allowed entertainment to drift to the household in a very cost effective manner.\u00a0 Before we had to drive and gather significant funds to go to the arcade, zoo, aquariums, or theater now we can do much more in the comfort of your own home.\u00a0 Those wanting the quickest solution to being less \u201cwasteful\u201d need to think about increasing the cost of power.\u00a0 Based on my years of experiencing forecasting load for all parts of the country, electricity is one product which can buck the trend of economic growth, but at certain price levels people will change their behavior.<\/span><\/span><\/p>\n

Last but not least, this relates to a recent job I did for my client.\u00a0\u00a0 I had a client who was a relatively large energy consumer.\u00a0\u00a0 I structured a quite competitive RFP for his energy load and saved them millions a year.\u00a0\u00a0 Alternatively they could have gone to broker and had them help them.\u00a0 However the broker would have made the deal with his incentive tied to the provider plus have taken a much larger share of the savings.\u00a0\u00a0 Case in point is <\/span>this article describing<\/span><\/a> the Belleville city aggregation which they later approved.\u00a0 I believe the statement made by the \u201cconsultant\u201d is misleading \u2013\u201c Good Energy does not charge the city for its services, McMorris said. The company’s consultant fees are factored into suppliers’ bids.\u00a0 “Our company is on your side… We are negotiating for you with the energy supply company,” McMorris said.\u201d\u00a0 <\/span><\/span><\/p>\n

Based on the statements, the \u201cconsultant\u201d gets nothing unless the deal goes through.\u00a0\u00a0 They are not acting as consultants, but I consider them aggregators\/brokers.\u00a0 A real consultant will tell you the best decision for you AND not be incentivized to make you do something versus status quo.\u00a0 This is the position I have taken.\u00a0 I am trying to engage people and help them evaluate their energy planning decisions.\u00a0\u00a0 And I want no part in getting compensation from the entity that has the greatest stake in making you change.\u00a0\u00a0 Shopping your load is smart but you got to do it and to understand all the issues.\u00a0 If you are thinking about shopping your load AND you have significant quantities of load, please give me a call and I could save you millions \u2013 614-356-0484.<\/span><\/span><\/p>\n

I had a great year and have much to give, thanks to Thanksgiving.\u00a0 As always please do keep All Energy Consulting in mind for all your energy consulting needs \u2013 from market outlooks, to training , to engineering issues, and to energy planning.<\/span><\/span><\/p>\n

Happy Holidays from Your Energy Consultant,<\/span><\/span><\/p>\n

David K. Bellman<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A very poignant article by Citi supports my underlying thesis that QE will not be effective enough to outweigh the long-term implications.\u00a0 In summary the article highlights the adaption of people.\u00a0\u00a0 The reduction of yield creates multiple choices, not a single choice of investment.\u00a0\u00a0 Case in point is the VIG ETF, those stocks with high […]<\/p>\n","protected":false},"author":1,"featured_media":267,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,6],"tags":[34,42,184,369,183,182,181],"class_list":["post-529","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insights","category-power","tag-economy","tag-efficiency","tag-plug-power","tag-power","tag-provider","tag-qe","tag-quantitative-easing"],"_links":{"self":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/comments?post=529"}],"version-history":[{"count":5,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/529\/revisions"}],"predecessor-version":[{"id":533,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/529\/revisions\/533"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media\/267"}],"wp:attachment":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media?parent=529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/categories?post=529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/tags?post=529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}