When Pennsylvania opened its market in 1998, legislators were not so confident in the hand they were dealt.  They left the ‘default’ commodity providers as a part of the utility, and further hedged their bets with ‘caps’ that served as an ‘emergency valve’ in case energy choice did not work as designed.  After a flicker of hope for choice, higher wholesale costs essentially shut down the PA electric marketplaces.  PA residents benefited from artificially low rates set by these caps, which expire 2010 and 2011.

As these rate caps expire, consumers are getting a taste of what wholesale-market-driven prices are like.  In theory this is not much different from gas for our cars.  The market sets a wholesale price, and retailers offer products based on primarily those wholesale costs.  When prices go really high, people buy smaller cars or hybrids, or they drive less.

The same is true with electricity:  we need to consume less.  Demand continues to grow, and adding supply options in the northeast corridor is difficult , with ‘not-in-my-backyard’ [NIMBY] issues greater due primarily to population density.  Load control and other energy-saving products will grow once customers are more aware of the dynamics of the electricity wholesale markets.

Creativity in solving energy challenges is critical.  Imagine if Bill Gates stuck with his original statement that computers would never need more than 640kb of memory?!  Or if pre-1980 AT&T and Ma Bell’s were charged with deploying nationwide cellular coverage?  We most likely have no idea what the greatest energy saving invention will be in 10 years.   We are more likely to get that invention – and help solve our energy issues – with more cooks in the kitchen, not less.  Relying on a single regulated company – the incumbent default utility – to solve these problems is not the path with the most options.  Instead, let’s have a vibrant, alive, competitive marketplace of energy providers with access to the data and controls needed to offer products that give customers the incentives necessary to change their usage patterns.

Over the next few years we will see if PA’s hedged bet leaving the utility as the default energy provider was the right move.  The proof is in the pudding:  a wide variety of energy providers, products and services to help consumers manage their energy and energy costs, or most consumers on default service from the utility, with state- or utility-driven solutions to energy challenges?

I prefer my pudding with the flavor that comes with lots choices and options, please.

Over the next 3 years ending 2012, nearly all TX meters will replaced by smart meters – meters capable of both (a) recording data at 15-minute intervals to give a detailed picture of energy consumption, and (b) enabling Home Area Network HAN capabilities that move energy controls into the 21st Century.  HAN’s will enable load control and other features state-wide using a single standard.

As with any large deployment, features are being deployed gradually.  On 2/1, REP’s will be able to:

• Get interval data for ESIID’s that have smart meters.  This will most likely be automated through existing usage data feeds.  Contact ESG for more info.
• Establish administrative users that can go online and add ESIID’s, view ESIID usage info, request ad hoc usage information and more
• Establish and manage HAN devices, and control basic features of HAN devices

In Q4 2010, REP’s can throw away their Letter of Authorization LOA devices used to qualify new prospects, and turn on an SMT tool that will enable them to get detailed interval profiles with only the ESIID and the Meter #.

Demand-side management, time-of-use pricing and much much more are in our future, limited only by the imagination of the REP’s and energy providers.  Get out your crayons, and don’t bother staying inside the lines, because the lines are yet to be drawn!

Mandatory Hourly Pricing [MHP]

• MHP for accounts 1000kw – 1499kw total peak demand (not just one meter) begins Nov 2009, meters installed by Apr 2009 (300 customers)
• MHP for accounts 500kw – 999kw begins May 2011, meters installed by Apr 2010 (1400 customers)

PowerMove Expansion

• Allows Customer to choose supplier when they enroll, getting 7% savings immediately
• Expect Jun 2010 implementation pending PSC approval

Automated EDI Testing

• New automated testing process will reduce testing timeline to 10 days
• Web-based testing interface for trading partners; see progress; interact; email updates when files posted, etc.
• Implementation Jan 2010

Miscellaneous

• 600k accounts switched (3.1M total)
• 60 ESCO’s, 15 electric only, 28 gas only, 15 E&G

The next flight after that has a registration deadline of 11/6/09, with production projected 1/25/10.

Other interesting PPL Facts:

• There are 7000MW in PJM’s PPL zone
• All meters in PPL are interval:  1800 Itron MV90 15-minute interval and 1,400,000 Aclara TNS 60-minute interval.
• 1,200,000 Resi Customers, 200,000 Small C&I, 1,200 Large C&I
• Resi price for 2010: 10.298 per kWh; Small C&I: 10.384 per kWh
• SC&I prices going up 45% in 2010
• PPL’s Energy Analyzer let’s all customers see their interval data, and share that data with 3rd parties (suppliers!)

Resources:

• 2009 Test Schedule

• On ’standard’ switch (formerly ‘on-cycle’), a customer’s first-available switch date FASD will be set 3 business days after switch received at ERCOT.  No special fees, no ‘waive notification’ option,
• If the normal read date is -3 or +3 days after FASD, that read will be used.  If outside that 7 day window then a physical read will be made on one of the 4 days after the FASD (TDSP’s have until 12/1/09 to implement).
• The standard switch will be made 4 days after ERCOT receives the switch.
• On ’self-selected’ switch (formerly ‘off-cycle’), a customer is switched on the date selected by the REP, and TDSP fees apply.
• Rescission postcard to customers is replaced by a notification postcard (no option to rescind).
• TDSP’s must have certain percentage of actual reads (reducing estimated reads) by 12/1/2009.

UPDATES:  above includes updates noted by Mike at TES Energy Services

The full order is here:  http://www.puc.state.tx.us/rules/subrules/electric/25.214/36536adt.pdf

Also see:  http://www.puc.state.tx.us/rules/subrules/electric/25.475/25.475.pdf

[Russia] Electric industry restructuring was essentially completed on July 1, 2008 and 20 of the 21 newly-created generation companies are to be privatized with many of them already having been privatized attracting both Russian and foreign (E.On, Enel, Fortum and other companies) investors. Since September 2006, wholesale and retail power markets have also come into force as wholesale electricity (capacity) market transitioned to regulated contracts concluded between buyers and sellers where prices are regulated by the Federal Tariff Service and a spot market-day ahead (DAM) was launched. In April 2007, regulated contracts were due to be replaced by unregulated ones but not until 2011 will electric power be sold at competitive retail prices.

Call ESG today for market pricing!  

• PPL utility president spoke, making it clear that PPL wants customers to switch.
• PUC Chairman Cawley echoes desire to see people switch, PA experiment hangs in the balance of a good showing..
• Many suppliers hosted booths to talk to customers
• PECO, FirstEnergy/Met-Ed/Penelec, Allegheny Power rate caps set to end 12/31/10
• End of Duquesne Power Light rate caps yield 20% shopping, including 50% of electric load
• Several small customers expressed concern over the rate caps ending

Chairman Cawley is going to post his slide deck online, and PCN recorded some of the event.  At time of this post, neither were available online.

Welcome to ESG’s retail energy blog! The goal of this blog is to help stimulate lively discussions and debate on topics critical to success in the retail electric and gas industry. ESG’s senior staff will post comments to the blog that we hope you find compelling, informative and yes even controversial. We look forward to your thoughtful and insightful comments, questions and feedback.