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

Fortnightly Magazine - January 1 1997

He says he guesses that residential customers might "save a little bit" through choice, maybe a few percentage points off their bills.

"It depends on where the market goes," he explains. "New England was in better shape a few months ago than if you look at the current problems with nuclear facilities. And clearly, that could have an impact on the rates at which power is being traded.

"Some [consumers] want to pursue it as something new and different and exciting to do (em this may be me speaking more than anyone (em but if you were going to save 10 percent, or had the impression that you might save 10 percent or more off your bill, you might go after it," he says. "If it was going to be a lower percentage than that, I know that I would wonder if it would be worth the trouble."

But Abbanat says savings aren't expected to be 10 percent, so the experiment may not give a true picture of how motivated customers are to choose an electric supplier.

Looking at New Hampshire, he says, customer confusion engulfed the pilots and left "unfulfilled expectations."

"Maybe a pilot program represents something of a risk in that a customer goes forward and views the program as a company program, and the opportunity for customer dissatisfaction might be something they would want to worry a little bit about," Abbanat cautions. "I suppose the flip side of that is it may be the competitive market that will be assigned fault for whatever dissatisfaction a customer experiences."

So a pilot's success or failure, under Abbanat's theory, could be blamed on a utility or the competitive market. Although it may be too early to tell, blame also could lie with allowing utilities (em not commissions (em to set the rules of the game.

Whatever the case, whether the pilot is stipulated or ordered, the result will be: Someone will win advantage . . . or no one will. In the luckiest outcome, the consumer gets to choose and save (em even if it is just 6 cents a month. t

Joseph F. Schuler, Jr. is an associate editor of PUBLIC UTILITIES FORTNIGHTLY.

Do customers come first?


"As in other competitive markets, [electric] competition merely answers the question of which suppliers are willing to absorb margin or to invest in efficiency measures in order to gain access to the customer."

(em Robert O. Viets,

Chief Executive Officer, CILCO

New Hampshire

"The minimum point that people make decisions seems to be at least 5 percent of their total bill. You have some customers who just don't like their local utility, they don't like the prices ... and as such were willing to make a change without much savings."

(em Kathy Therrien,

Principal, XENERGY, Inc.

New York

"We're not offering incentives to people to switch. [It's] an experiment. It's even been stated in some of the commission writings that customer choice is in and of itself a goal. So we said, 'OK, we'll try it out.' It's not a program designed to