Energy Explained

Understanding Energy Costs

energy-explained

Energy Basics

You probably use two main types of energy: electricity and natural gas. Both are normally subject to market fluctuations from supply and demand.

Electricity, unlike other commodities, can’t be easily stored. It’s measured per kilowatt hour (kWh), and traditional electric bills are based on consumption, which fluctuates.

Natural gas is transported using an infrastructure of pipelines, which takes the gas from drilling sites and delivers it to your home or business. It’s traditionally measured on utility bills per dekatherm (DTh).

In general, the energy prices are driven by two main cycles:

  • The season: Energy prices tend to be higher in the summer and winter, as more heating/cooling is needed.
  • The energy market:

How Does Energy Pricing Work?

What Is Deregulation?

While the idea of Astral Energy potentially reducing your energy costs seems like magic, we can demystify it all for you so you have an idea of how it works.

Before energy deregulation, your utility company had two roles in bringing energy to your home or business:

  • Supplying the energy: physically having the quantities of the energy sources.
  • Distributing the energy: routing the energy to your home to power your lights, televisions, stoves, and more.

Your utility company bills you for the following every month:

  • supplying the energy,
  • distributing the energy,
  • and applicable taxes.

This is where Astral Energy comes in.

With deregulation, your energy supplier and distributor can now be two separate entities, which gives the customer the power of choice. Astral Energy takes over the first role: the role of supplying the energy. Your local utility still has the second role of distributing the energy.

Astral Energy supplying you with energy may give you advantages.

  • You may be able to obtain competitive market rates on your supply of energy from Astral Energy.
  • With the energy choice program, you can negotiate your energy supply rates.
  • Even with the above two facts, you will still be serviced and billed by your utility company. Astral Energy would be your energy supplier.
  • Your utility company will continue to distribute the energy, which Astral Energy supplies to your home or business, and will continue to handle all billing.

After deregulation

Your bill will continue to come from your utility company and will look almost exactly the same with two exceptions:

  • A line item that now says that Astral Energy is your supplier of electricity or natural gas
  • Your overall bill will change every month due to usage, variations, and market conditions, but over the course of the year, Astral’s goal is to obtain value for its customers by offering competitive energy supply.

If this all sounds great to you and you would like to sign up today or have any questions, you may click here or call us today 888-850-1872! One of our representatives will walk you through how you can learn whether Astral Energy can start lowering cost on your energy bill today!

Terms You Should Know

Electricity

The state agency that regulates electric utilities and competitive power supply sales. (For those states that have deregulated power, the DPU may just be the distribution channel rather than both supplier and distributor.)

Opening a market whose practices and prices were previously regulated by the government to competition.

Your local electricity utility is the distribution company that delivers power to your home or business.

An entity eligible to sell electricity and/or natural gas to customers using the transmission or distribution system of a utility.

The federal agency that regulates energy transmission, sales and so on between states.

The process by which certain types of energy, including renewable sourced energy (i.e. wind, solar), fossil fuels, and/or nuclear energy is turned into electricity.

The standard unit of electricity measurement.

Any fuel that can be used to produce electricity. This includes fossil fuels (i.e. oil, coal, natural gas), nuclear, and renewable energy resources (i.e. wind, solar, hydro. etc.)

The state agency that regulates electric utilities and competitive power supply sales.

Power that is produced from “clean,” environmentally friendly power sources such as solar, wind, and hydro.

The process by which electricity is delivered from a generator to a local electric utility/distribution company over high-voltage power lines.

Gas

The reading from your gas meter.

The amount of natural gas a Natural Gas Distribution Company (NGDC) receives to deliver to a customer or group of customers, and the amount of gas that customer/ group uses.

The amount of heat necessary to raise the temperature of one pound of water by one degree Fahrenheit.

Determined by the physical limits of a gas transportation system, capacity is often divided among several parties along the interstate transportation system. Each party holds a contract for a specific quantity.

Natural gas sold either by volume or heating value.

The most common unit of measure of gas volume; One cubic foot roughly equals 1,000 BTUs. You might also see Centum Cubic Feet (Ccf) as a standard gas measurement of 100 cubic feet.

A measure of the heat content value of gas, equal to 10 terms or one million BTUs. Gas usage is determined by multiplying the Mcf used by the heat content value of the gas.

Delivery of natural gas via a local pipeline.

Federally regulated, large capacity pipelines that transport natural gas across state lines from areas that produce the gas to end-use markets.

A standard gas measurement of 1,000 cubic feet of gas.

State regulated natural gas utility that owns the gas lines and equipment that are needed to deliver natural gas to customers.

An entity that sells natural gas to customers (which is then delivered through the distribution lines of an NGDC).

The movement of natural gas through the interstate pipeline system for delivery to the distributor (NGDC).