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Texas officials and suppliers proclaim electric deregulation a success thus far


AUSTIN, Texas, Feb. 28, 2002 — Over half of the electricity purchased by large customers in Texas now comes from competitive suppliers rather than the local utility, a panel of Texas energy suppliers revealed Tuesday at an energy forum sponsored by XENERGY in Austin.

At least 750,000 Texans will switch their electric suppliers by the end of the year, predicted Texas Public Utility Commissioner Brett Perlman.

These optimistic assessments were presented at XENERGY’s Thirteenth Executive Forum, held at Austin’s Four Seasons Hotel on February 26-27. XENERGY is a national energy consulting firm that has performed over $10 million of research thus far on retail energy markets throughout the country.

The forum featured a “who’s who” list of speakers including Texas Public Utility Commissioners Rebecca Klein and Brett Perlman, Electric Reliability Council of Texas (ERCOT) CEO Thomas Noel, former Texas Senator David Sibley, New Power Vice President Kathleen Magruder, Centrica Senior Vice President Nick Fulford, Reliant Energy Solutions President Jim Ajello and Sempra Energy Solutions President Robert Dickerman, and XENERGY experts.

Labeling Texas deregulation a success thus far, Commissioner Klein described the market as “healthy” and told attendees that customers switching electric suppliers are already seeing savings of up to 12%. Residential switches are likely to increase this spring and summer when the state unfolds a multimillion dollar consumer education program.

XENERGY CEO Kelly Warner praised Texas for “continuing to search for the promise that’s inherent in deregulation” as he opened the conference. “All eyes are looking at Texas,” Warner said, noting that Texas offers “one of the best chances for competition to really work.”

ERCOT CEO Thomas Noel told conference attendees that “This is not a sprint — this is a marathon.” He referred to electric deregulation as “a work in progress” but observed that results to date are well ahead of most people’s expectations. He noted that “Texas is not California” with regard to electric deregulation and also stated that Enron’s recent problems will not greatly impact the ERCOT market.

Former Senator Sibley, one of the main architects of Texas’ deregulation bill, noted the savings that consumers can receive under the new law. “Residential customers must win with deregulation or else it will be a failure,” he said in a luncheon address. He indicated that if deregulation does not succeed in Texas, it is not likely to succeed elsewhere.

New Power VP Kathleen Magruder stated, “Texas got the vast majority of the rules right. Overall, we think the deregulation program is a good one.” Centrica, Britain’s largest natural gas company (which also owns Energy America), this week announced it would acquire New Power. Centrica Senior VP Nick Fulford told forum attendees that his company would bring scale and financial strength to New Power while building brand recognition in North America.

The Austin forum was held in conjunction with XENERGY’s Retail Energy Markets (REM) 2001 study, a , syndicated strategic information service for stakeholders in restructured energy markets. Authors of the REM study announced that New Power, Reliant, TXU, and Green Mountain currently hold the largest residential market share in Texas, while TXU, Reliant, AES NewEnergy, Dynegy, Strategic Energy, Calpine, First Choice, and Sempra are the suppliers to large customers.

For more information, visit XENERGY’s web site at www.xenergy.com.