Hedging programs promise protection against energy-market price spikes, and they can be important to the regulatory goal of sustainable, lowest long-term service cost. But how much price...
The 1998 Gas Industry Executives Forum Mapping the Universe of Natural Gas: Closed, Shrinking or Expanding?
what your reliability is, I know what Brooklyn Union is and I'm going to stay there."
I think the answer [to value for consumers] lies in a national or international movement to give choice to customers (em [the idea] that competition is better than trying to have regulators decide what the market wants. And that trend is a broad, sweeping trend and it's certainly not just in our industry. Our own surveys indicate that customers do want choice¼ but don't force them to go there. Don't take away the choice that they have from the utility.
A PIPES COMPANY? One of the core competencies that Brooklyn Union felt it had was managing its supply portfolio. Therefore, why would we outsource that to Enron? Well, we were managing in a pretty good way. We made about $10 million a year on [sale of excess supply] and we shared that with our customers (em our customers got 80 percent of that, and our shareholders got 20 percent. When Enron came to us they had two things we didn't have: an enormous core competency in trading and arbitraging. We were not prepared to invest the hundreds of millions of dollars that Enron was to get that expertise. That enabled them to give us an offer that was much better than what we were doing ourselves, so that we could assure our customers that they would save more money by having Enron manage those assets and our shareholders would have an incremental benefit.
We position ourselves as a regional energy player (em [our territory] eventually will be all of Long Island after our merger with LILCO, and hopefully beyond that.
Some say, "Let the LDC be a pipes and wires company (em and the relationship with the customer we'll give to the marketer. Let the gas marketer send the customer bills and everything." I'm not in that camp. I don't know how these marketers will fare; some will fail, some will succeed. Not all of them have the customer relationship in mind like we do. We have an extremely high level of customer satisfaction, almost 95 percent. Before I'd willingly give it up because of any national trend to unbundle, I want to treat that like very precious cargo, making sure I'm still serving that customer in any way that I can as an LDC.
In fact, many utilities (em I will admit our own motives here as a corporation and a holding company (em want to provide a full range of services to our customers, but we can only offer some of those services as a regulated utility. Many marketers want to do the same thing (em to offer customers bundled services. But the way to get access is to unbundle the utility and then marketers get their foot in the door by selling just gas or electricity as a commodity; and then some of them want to bundle services. Now, not many want to do it the way we do. I don't know of a marketer, for example, that wants to go into the