So the Federal Energy Regulatory Commission (FERC) won't break up the electric utility industry. But it may happen anyway (em if not at the FERC's direction, then perhaps under pressure from state...
Who's Who Among Energy Service Providers
Business Volume: 300 megawatts. Includes residential, commercial and industrial customers.
Goal: 1,000 MW.
Largest Customers: San Diego Association of Governments, California Department of General Services, St. Jude's Hospital Group.
Competitors: New Energy Ventures, PG&E Energy Services, Enron Energy Services.
What Defines the Company: Offers 12- to 18-month contract terms on commodity sales, typically shorter than competitors.
Company/Product Sketch: Hit big time when it won the SANDAG contract, worth about $36 million in gross annual billings, about a third of that for the commodity. Has guaranteed as much as 3.5-percent savings, depending on trading in the California Power Exchange. Now claims more than 500 industrial clients. Bloom says company is not yet in Enron's category, but, "We're working on it."
"We are planning on losing money, and any company that expected to start from scratch and make money in the first year [of competition] lives in a dream world," he says.
The company's offerings are primarily billing/metering and commodity products, although it plans to start supply- and demand-side management.
All of its deals are negotiated. Because it seeks short-term contracts with clients, there's more at risk when the pacts end. But the short-term contracts are appealing to customers because competitors offer the same rate for longer terms. "We believe that once we get in there and we've installed the meters and they're getting their savings, it's going to be a lot harder for them to change in midstream, despite the fact the contract might expire," Bloom says. Throwing caution to the wind, the company is prepared to earn long-term business through performance.
Bloom points out that to win 25,000 residential customers in California, he spent $1.5 million. Enron spent $10 million to win 30,000, he notes.
The company's next move is into Arizona and Nevada as those states deregulate in 1999.
A Happy Regional Player
Conectiv Energy Supply Group, Conectiv Enterprises Group, Wilmington, Del.
Ownership: Both are business units of Conectiv Energy.
Employees: More than 275, selling energy services and commodity in Maryland, Delaware, New Jersey, Pennsylvania and Massachusetts.
Business Volume: About $110 million (unregulated business).
Goal: To serve 20 percent of the Mid-Atlantic market.
Largest Customers: R.R. Donnelley & Sons, Bristol-Meyers Squibb, Hewlett Packard Inc.
Competitors: PP&L Energy Plus, Enron Energy Services, Exelon.
What Defines the Company: Its tariff-knowledgeable staff, plus bundled services that include telecommunications.
Company/Product Sketch: With the Energy Supply Group supplying its commodity, CEG's Conectiv Solutions provides oil, natural gas and electricity plus telecom services, HVAC, power quality solutions and metering. Despite this large offering, the companies have decided to remain regional.
M.Q. Riding, marketing manager for Conectiv Energy Supply, says clients seem happy with regional perspective, because they're splitting up energy management by region, despite their nationwide
"What we're starting to see is the larger Fortune 500 companies testing maybe three different entities in three regions ¼ one against the other," says Andrew Bakey, energy manager. "It's almost impossible to know everything that's going on in every single state and to know exactly every tariff."
The two Conectiv executives disagree on how much weight customers