It is Time to Start Controlling Your Station’s Energy Costs
November 11, 2022
This is not the time to be subject to the most volatile and high cost energy markets we have seen in years. Driven by war in Ukraine, runaway inflation, looming recession, and increased demand for gas from both Europe and electric power generation, natural gas charges from your utility have doubled in the last year and are projected to go still higher.
Fortunately, MAB, working with EnStar Energy, MAB’s Energy consultant, can help members control their energy costs and reduce the impact on their budgets.
With regard to natural gas, EnStar suppliers are currently offering natural gas at competitive fixed pricing for the upcoming heating season and beyond. Through EnStar, members can obtain fixed, multi-year agreements priced at or below current charges for gas from your utility, This is a great opportunity to control a major component of your Station's operating budget and protect your company from the very real risk of price increases in the near future.
Locking in a fixed price agreement insures there are no surprises, especially critical during the upcoming winter months when most stations consume 70% or more of their natural gas. These are not teaser rates, like those offered by some suppliers, that will go to a much higher rate in the near future. The contracted price would be locked in for the duration of the contract with a supplier EnStar has thoroughly vetted.
A typical MAB Station, using, for example, 4,000 cubic feet of natural gas per year would save $1,000 to $5,000 per year depending on the Station’s utility and the length of the agreement. Larger Stations would save much more.
For Stations located in Wayne or Washtenaw county there is a very special added opportunity. Because of your Station’s location, you qualify for a unique program, saving significant dollars on DTE’s utility charges as well as the gas commodity.
Specifically, wherever Detroit Edison's electric service and the former Michigan Consolidated Gas service territories overlap, Constellation Energy (an EnStar supplier), offers significant savings on utility distribution costs as part of a U.S. Department of Justice agreement to approve the merger of those two utilities.
Purchasing your gas through this program provides the following savings:
- No customer charge -- ($225/month on S Station or $40 on GS-1 Rate)
- No surcharges-- no UTEM, IRM or other surcharges
- No energy waste reduction charges-- ($0.5540 per MCF)
- Distribution charge discounts (15% or $.41 on S Station rate accounts or $0.57 on the General Service GS-1 rate)
- No GCR reservation charge-- ($0.45 per MCF)
These add up to almost $2.00 savings per thousand cubic feet of gas purchased (MCF). The savings available are fixed They do not vary from month to month. They are only available through Constellation. Neither DTE or any other alternative (choice) gas supplier in Michigan can offer any of the above savings. In addition, under this program you also can also lock in a gas commodity rate that is competitive with DTE’s GCR charges and is fixed, protecting your budget from future DTE price increases.
Natural gas supply is far from EnStar’s only service to MAB members. Given that electricity prices have seen price increases similar to natural gas, electric costs need to be addressed as well. In the last year, electric utility costs have risen to all time highs as coal plants are retired and replaced with higher cost renewable and natural gas generation. Electric purchases from an alternative supplier are capped at 10% in Michigan with a waiting list of thousands. Still, there are things a MAB Station can do to cut those costs.
For example, all MAB member station broadcast studios are eligible for sales tax exemptions on the portion of both their electric and gas bills used to produce their broadcast or to heat and light the areas where broadcast activity is taking place. Nevertheless, many members are still paying the full 6% rate. EnStar can help such members get the exemption they are eligible for and get a refund of the amounts that would have been exempt in the past 4 years. This requires a detailed review of the energy uses in the studio but EnStar has done dozens of such reviews. There is no reason every MAB station should not be exempt. Unfortunately, transmitter towers, a major electric cost for most stations, are considered shipping and not production by the Department of Treasury. As such, they are not eligible for an exemption.
EnStar also offers a no cost utility bill review and onsite energy audits. Changes in operating conditions and utility rate changes for both natural gas and electricity have left many station accounts on the wrong utility rate offering. Getting on the right rate results in instant savings. This often amounts to thousands of dollars saved annually.
Upgrading to LED lighting is another way for stations to reduce their electric costs. EnStar can help evaluate the savings potential of lighting and other energy conservation measures. If the savings potential looks promising, EnStar will work to arrange for a qualified contractor who will work with your Station to find the appropriate solution and provide your Station with a quote on the cost of the measures at no cost. Yes, this is a capital budget item, but the payback is typically short making such expenditures a really good investment.
For those Stations lacking capital, there is a loan program available from Michigan Saves, a lending institution whose purpose is to provide loans for energy efficiency improvement measures. These loans are heavily subsidized by the state’s utilities through the Energy Waste Reduction surcharge on your utility bill and are intended to create a positive cash flow. That is the borrower saves more than the cost to repay the loan even while the loan is being paid back. The concept is to provide an incentive for the utility’s ratepayers to go forward now and help the utility reduce its need for new plant.
MAB encourages you to investigate how to save under the program. To find out how you can reduce your energy costs, simply contact MAB or Don Johns at EnStar Energy L.L.C. You can contact Don by email at firstname.lastname@example.org or call EnStar Energy at (517) 694-2510. Email a copy of a recent gas bill for each of your natural utility accounts to MABEnergySavings@EnstarEnergy.com. Don and or his staff will be happy to answer any question you may have about the program.