Although the nation is enjoying lower gasoline prices at the moment, the chair of the state House Environmental Resources and Energy Committee is warning that Pennsylvania electricity prices are poised to go way up--even double--in the next two years, thanks to a 1996 price deregulation law that is about to affect the entire state.
But amid dire predictions of rate increases, two up-and-coming Pennsylvania companies are prepared to help businesses and consumers save big bucks on their utilities when deregulation comes--and poised to prosper in the process.
Rep. Camille George of Houtzdale has noted that utility rates in western Pennsylvania, where electricity suppliers were allowed to deregulate earlier, have already jumped as much as 130 percent. In the eastern half of the Commonwealth, where deregulation will roll in at the end of 2009 for a few utilities and the end of 2010 for most, George is predicting price increases as high as 63 percent.
So if you're in the business of making electric utilities more affordable, business is looking good.
"Both 2009 and 2010 are aligning to be very dynamic years for us," says Scott Stiner, COO of
Taylor Consulting and Contracting in Avoca, just outside of Scranton.
Taylor, a utility management company, was founded in 2004 and released its first product in January 2008--UtilityModule, which tracks day-to-day energy consumption and helps increase efficiency. The company also offers Energy Auction Software for online reverse auctions, through which customers can offer individual gas and electric loads or aggregated loads for sellers to bid on.
"We're expecting to have gone from zero utility meters to 20,000 meters by the end of this year," says Stiner. "We expect next year… to be somewhere around the 75,000 to 100,000 [meter] range. Utilities are something [businesses] have never been able to manage to this degree."
Taylor's customers include large apartment buildings, retail locations and a national biotech company. Their highest profile deal was just announced by Boston Mayor Thomas Menino last month. The company was chosen as the energy broker for the new Boston Buying Power program, which will allow groups of small Boston businesses to secure a more affordable energy supply by contracting together for a long-term fixed price.
"Part of our success and strategy with our Boston program," Stiner says, "is getting the word out through trade associations to reach a broader range of customers, and that strategy would certainly work as effectively in Pennsylvania as it does in Boston."
In fact, he adds, "We're initiating conversations with local cities" about creating the same arrangements. "The early feedback has been very, very positive."
Coupled with new products Taylor will roll out in 2009, Stiner expects the company to be well positioned to help ease the impact of electricity deregulation on the state's utility customers.
He also expects Taylor to double or triple its current 24 employees next year and probably max out its current Avoca space by 2010. "In an area that's been hit with some bad news," Stiner says, "we're one of the few companies that is actively and aggressively growing. We're excited about not only pulling such talent in but about growing the company as quickly and effectively as we can do it."
In another corner of the state, CEO Bret Grady has positioned Erie's
eDynaQuote to take advantage of energy deregulation as well. The company, founded in 2002, was bought in June by Grady and a group of investors who have kept the company moving into energy procurement--electricity, natural gas, gasoline, diesel and coal--throughout the country.
The effort is becoming an offshoot of their main business: outsource sourcing for small to medium companies.
"We help them buy things for a better price," Grady explains. And they help companies develop better relations with current vendors, find new vendors and create better purchasing processes. eDynaQuote either handles the procurement services itself or finds strategic sourcing for one-off initiatives (say, buying all the office supplies for a company's many offices and outlets).
"I think we'll see a lot more clients be interested in our ideas on how to save money when they buy energy" after deregulation, Grady says. "Especially the large manufacturers, some of the hospitals, some of the universities. Any state that goes through deregulation is a state [where] we can help drive down their energy costs.
"The sexy thing to talk about is when we save a company money," he adds. But sometimes the best thing they can do--the thing customers appreciate most--is to hold off on an inevitably higher price."
Marty Levine is a Pittsburgh freelance writer trying to cover the waterfront from the water. Send feedback here.To receive Keystone Edge free every week, click here.
Photos:Scott Stiner, COO of Taylor Consulting, speaks with consultant Jack Walsh and IT Director Nancy Close in his Avoca office.
Stiner goes over ideas with Walsh.
Karen Tomaine, Esq, works with the Taylor Consulting company.
All Photographs by Aimee Dilger