Provider of Last Resort (POLR) is the function a utility usually serves in markets that have opened energy supply to competition, serving customers who do not choose a competitive supplier.  What will the POLR of the future look like? (more…)

When Texas opened its ERCOT marketplace to choice in 2001, they pushed all their chips into the middle of the table.  The ‘affiliated retail electric providers’ AREP were split from the existing utilities – renamed ‘Transmission and Distribution Service Providers [TDSP]  to reflect their new responsibilities – and these new AREP’s were given a period of time where they served as the default electric provider.  With default rates set high by the PUCT, energy consumers were incented to find a new electric retailer.  Eventually the burden of providing default power was spread across a broader group of REP’s.

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.

Starting 2/1/2010, Texas meters are moving to the head of the class.  Smart Meter Texas, a website/webservice collaborative of the big four TX TDSPs (AEP, Centerpoint, Oncor, TNMP), goes live that Monday providing energy consumers, REP’s, and other parties access to both data and features that raise the bar in smart grid world.  Where other states and markets are dipping their toes into these future capabilities, Texas is diving head first.

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I remember once reading an article in a major newspaper proclaiming that a good indicator of growth in the economy was the growth in number of packages delivered by FedEx and UPS. This obviously makes sense since consumer purchases represent approximately 70% of our GDP and a significant percentage of the goods purchased are delivered by overnight couriers. A similar analogy can be made for measuring growth in the retail energy industry. (more…)

ConEd hosted a ESCO meeting to announce some initiatives rolling out shortly.

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

Attached below is FE’s summary of FE’s UCBRR solution.

Summary:  FirstEnergy-UCBRR-Summary-20090917

Links:

• Website, Rate Form for Met-Ed/Penelec:  http://www.firstenergycorp.com/supplierservices/files/Supplier_Registration/Ratedesignform%20rev%206%2021%2007.xls
• Website, Rate form for Penn Power:  http://www.firstenergycorp.com/supplierservices/files/Rates_and_EDI/suprates.pdf

The PA PUC ordered both PPL and PECO to prepare a report for how they would do Rate-Ready in their marketplaces.  PPL is leading a collaborative of LDC’s, suppliers and service providers through the requirements needed to make this happen.  Combined with POR, these markets in PA should be busy!  Notes:

• PA markets Duquesne, PennElec, MetEd, Allegheny Power and Penn Power all provide Rate Ready already.
• Most expect the new RR solution to look alot like the existing RR solutions already in place in PA
• PPL and PECO started with Bill-Ready in 1999
• To join the fray, contact Bruce Bolbat at PPL
• A report is due to the PA PUC by 11/9/09
• ESG is helping to coordinate Suppliers in this effort.  If interested, contact George Behr at ESG

Hot off the presses, these will certainly share equal-billing with that last Harry Potter novel you are still trying to finish.

PJM IG’s 2009-08-08

Want to sign up a customer in PPL for January 1, 2010?  You will need to start the testing process by 9/4/09 which gets you in production approx. 11/23/09.

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

NYC local taxes changed on 8/1 to 4½%.   Notes:

• Mayor’s proposal to charge the sales tax on ESCo charges and raise $83 million dollars was passed by the City Council in June
• New taxes for NYC go to the state legislature as well, known as a ‘home rule’.

KED

• In KED, ESCo’s have to calculate a 4 1/2% tax on charges and submit them for bill presentation as a separate line item.
• In KED POR program, KED purchases this tax along with the rest of charges.
• In KED POR, ESCo’s remit full tax amount to proper taxing authority.

ConEd

• In ConEd, the new tax is for both gas and electric.
• As in the past, Con Ed will buy the new NYC local taxes receivables as part of POR
• In ConEd, ESCO’s need to send in an 814 Change file to change the tax rate (use AMT*9M)
• As in the past, the ESCO is responsible for reporting and paying taxes to appropriate tax agency.

Miscellaneous

• If the meter is read on or after August 1, 2009, and the number of days from August 1, 2009, to the date of the meter reading is more than half the total number of days covered by the bill, report sales of these services at the new residential rate of 4½% or the nonresidential rate of 8 7/8%.  If the meter is read on or after August 1, 2009, and the number of days from August 1, 2009, to the date of the meter reading is more than half the total number of days covered by the bill, any sales of the services of transporting, transmitting, distributing, or delivering gas or electricity, even if made by someone other than the vendor of the gas or electricity, must be reported at the new rate of 4½%.

Related Resources:

PSC Notice: http://www.tax.state.ny.us/pdf/notices/n09_12.pdf