The electric utility industry offers up a wealth of ideas on how the Federal Energy Regulatory Commission might reform its policy, adopted under FERC Order 679 in 2006, of granting financial...
NEV?s Mike Peevey: Meters Make the Market
to help make the commodity buying decisions, or do you make all the calls at NEV?
We make all the decisions. But we commit in writing in a contract to them that they'll never pay more than they would have paid if they had stayed with their UDC. Now, most of them buy on a share-the-savings basis where if we can save them so much below the PX price then we keep a percentage and the bulk of it goes to them. A few others have bought on a fixed-price basis.
Then, the higher the PX price goes, the better it is for you, potentially? Is that correct?
Well, it depends on what we're getting the commodity for itself. If we're buying at $20, and the anticipation is that the PX will be $25, but instead it ends up at $27, it's better for our customers and for us. The CTC [competitive transition charge] is small, because rates are frozen.
Venturing to Other States
What about activities in other states? Have you seen the same opportunities elsewhere as in California, where you can install a meter for your customers to give them enhanced service?
Don't misunderstand me. Everybody over 50 kilowatts that's going to participate in direct access has to have a new meter in California. So, anybody below 50 kW (em and it will probably eventually be below 20 kW (em will be load profiling. We have to go out and put in new meters. We're serving only those we've actually installed the meters for. We have a lot of other people that because of utility foot-dragging we haven't got the meters installed yet. You follow me? It takes a little time for people to get their load data in, so there's always a lag here, but some of it, I think, is deliberate. So that's the situation in California. But it's not necessarily the situation elsewhere. And we will adapt to whatever the market is, as long as there's an opportunity to save people money.
So you've got sales in Pennsylvania and New York, but none in New Hampshire?
None in New Hampshire. We had sales last fall in Rhode Island, but we pulled out of that market last year because the public utilities commission changed the rules.
We're active in New York state, right now, and we have three, four offices on the East Coast. We have an office in Boston, New York, and upstate New York (in Rochester) and also in Philadelphia. We have customers in Pennsylvania that we're providing electricity to as we speak and we have customers in New York that we're providing electricity to as we speak.
Are you providing both commodity and metering services in New York or Pennsylvania? Your service in Pennsylvania and New York is not quite the same as in California?
These are pilot programs. So I'm sure we will eventually. California just kind of went cold turkey and jumped into this thing. But these other states have decided to make it a much more drawn-out process with pilots. I don't