Commercial and industrial customers of Consumers Power Co. paid almost $500 million above their actual cost of service to subsidize residential customers over the past five years, claims John W....
Energy Choice via Internet Gas Now, Power Later
TWO WEB SITES ARE VYING FOR THE TITLE OF "FIRST Internet-based market for energy," one on the East Coast, the other out West. When last we checked, each traded only in natural gas, but each had plans in the works to expand to include electricity.
STILL TRADING BY PHONE. Southern California Gas Co. and Pacific Gas & Electric Co. went live on Nov. 19 with their on-line, shareholder-funded, "retail shopping center for natural gas," known as Energy Marketplace ( www.energymarketplace.com). Six suppliers were registered with the site as of mid-December (Cook Inlet Energy Supply, Enserch Gas Marketing, National Gas & Electric, Poco Petroleum, SCANA Energy and UtiliCorp Energy Solutions) and two more (em Coral Redwood LLC and Public Service Company of New Mexico (em had signed letters of intent. Suppliers pay a subscription fee to participate.
The two host utilities are only bringing together prospective customers and suppliers; they will not participate in the market. Customers can view a rank-order summary of bids and click on the one they like. The deal is completed off-line, which is the way SoCalGas likes it, explained Eric Baty, business information manager. The company isn't interested in "interfering with the customer-supplier relationship," and doesn't want to take title to the gas or be responsible for ensuring delivery or payment.
SoCalGas sees the online matchmaking as a logical extension of the Core Aggregation Transportation program, which began in 1991 and is open to all residential and natural gas-vehicle customers and commercial and industrial customers using less than 250,000 therms annually. However, SoCalGas Project Manager Ron Kent, said, it's not clear yet how eager suppliers will be to respond to residential requests for proposal.
So far, only Californians can enter and submit an RFP (based on their choice of indices, with or without a price cap) on the Energy Marketplace, but SoCalGas and PG&E "definitely" are thinking about expanding the site to make it nationwide and to include electricity providers, SoCalGas says. Preliminary user data shows the site received approximately 6,000 "hits" in its first three weeks, with at least 100 of them registered users, said Baty.
BLIND BIDDING ON-LINE. A joint product of North American Power Broker Inc., a power marketer based outside Boston, and Per-Se Technologies, an information technology company, goes a step beyond Energy Marketplace. The World Wide Retail Energy Exchange ( www.wwrex.com) allows real-time, contractually binding, transactions. System trials for natural gas began in October 1997 and real-time transactions began Dec. 1. Real-time electricity transactions were expected to begin in late January or early February.
According to NAP President John Gaus, 28 suppliers already regularly bid through REX. They only pay a transaction fee if they're the winning bidder. NAP currently has exclusive rights to serve 600 natural gas and electric meters, from small commercial businesses to Fortune 500 manufacturers, in California, New York, Connecticut, Massachusetts, Virginia and Rhode Island.
Late last year, the company was negotiating to source supply for several natural gas local distribution companies, Gaus said. Commercial and industrial customers are the targeted primary user, although Gaus noted they