On Wednesday, April 25, many businesses and non-profits across New York found out how much of the electrical power they use would be provided at a discount rate under the “ReCharge NY” program. This economic development plan provides a long-term price signal and commitment (via the state-owned utility NYPA) to employers in that the discounted electricity rate extended to participating companies is available for an initial 7 year period.

As with anything in the energy industry, though, it is not that simple. The allocations provided through NYPA are broken down into two parts:

• There is an allocation for a specific amount of energy through “Hydro Power,” which comes at a steeply discounted rate (a win for all customers)
• There is an additional allocation for a specific amount of energy through a “blended discounted rate” that includes Hydro Power + purchase of market power

What does this mean for you? In our view, customers should seriously consider taking the first option, as these rates are better than what companies can get on the open market. On the second, however, you have options, and are in a unique position to get rates that are possibly better than what is being offered through NYPA. It is important to understand that you are allowed to choose ONLY the “Hydro Power” rate if desired, as this comes with no strings attached.

Most companies have one month to decide what allocation(s) they will take. This puts you in a great position to “test” the market and see what prices you can get outside of what is currently being offered to you by NYPA. By purchasing the balance of the power you will need through a competitive reverse auction, you can have all the largest suppliers in the Northeast bidding against each other to win your business. A hyper-competitive environment, as provided by the auction process, will give you added price discovery, a fair and transparent mechanism for transacting, and, most likely, favorable prices for your energy needs. If you are interested in getting an objective opinion on the rates World Energy is seeing in the market via our reverse auction processes, give us a call (508) 459-8183 or email us at info@worldenergy.com.