Over the years I have tried my best to help manage your electricity and natural gas supply costs. Utilizing multiple suppliers, our goal is to lock in supply costs at favorable rates, for specific timeframes, based on commodity pricing and other factors such as weather forecasts, production and generation levels and personal experience in the energy industry. Since 1995 I have been involved with New York’s energy deregulation process, and began my career in energy sales in 1999. Thanks to all of you, I’m still in it, alive and well.

With 2018 upon us, I have simple and straightforward advice: consider locking in your electricity and natural gas rates for five years or for “as close as possible to five.” Circumstances warrant this action, pricing is attractive. For example, a look at today’s monthly NYMEX gas settlement prices, through 2022, range from 2.66/Dth to 3.11/Dth. Low. What a tight range over five years. This does not often occur, and we’re at the onset of winter to boot. This can change “overnight” with sustained cold weather in the Northeast, affecting commodity pricing, triggering seasonal undersupply of natural gas for electricity generation and heating needs, resulting in price spikes.

Significant potential for upside pricing exists, limited potential for downside.

Another factor to consider, for electricity, is closure of Indian Point nuclear power plant in lower Hudson Valley by 2021. This plant currently produces 25% of electricity needs for New York City and Westchester County. This represents a tremendous amount of power that needs to be replaced. And how will that happen? From where? Your guess is as good as mine. What I do believe is, this in itself will cause volatility prior to 2021 and beyond.

My recommendation is to avoid volatility and lock in today.