Residential Pilot Programs: Who's Doing, Who's Dealing?

Fortnightly Magazine - January 1 1997
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Residential Pilot Programs:

Doing,

Dealing?

Customer choice and electric restructuring may appear synonymous to regulators, but for utilities "choice" means "market share."

THERE WERE 19 PILOT PROGRAMS

planned or underway in the United States by the end of November, involving some 500,000 customers in all classes. The goal? To test competition in retail electric markets.

In the residential class, pilots were operating in Illinois, New Hampshire, and New York. Massachusetts expected to roll out its pilot by January 1. Pennsylvania was planning an April startup.

These programs capture market experience for incumbent utilities, their affiliates (regulated and unregulated), and independent marketers. And this experience raises some pertinent questions. But "Who's winning?" isn't one of them.

Better to ask, "How are the players going about attracting customers? What strategies work best? Do any tactics appear unfair or questionable?"

Is anyone making money?

And, oh, by the way, are customers saving money? In New Hampshire, after receiving solicitations from more than two dozen marketers, some customers discovered "choice" came down to a

6-cent-a-month decision, says one supplier.

In Illinois and New York it was the electric utilities who proposed the retail pilot programs. On the other hand, New Hampshire's pilot began by order of the state public utilities commission (PUC). These pilots operate very differently. They adopt varying objectives and offer varying results.

In more than a dozen interviews, regulators, utility officials, independent and affiliated marketers, and a consumer representative fielded these questions and raised other issues:

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