Myth 1. RTP increases the utility's costs and revenue requirements. %n1%n
Reality 1. A well-conceived RTP program reduces the utility's costs and revenue requirements.
quality services and strategic services. Greatest opportunity seen in energy management, power quality, risk management and asset monetization.
Says Chamberlin: "The key to our success is putting a bundle together for a customer, which really focuses on financial opportunities. That's partly why I resist talking about sort of a typical product line. I think most of us in the business are doing similar things with the individual parts of the potential sale."
Scott W. Gebhardt, company president and CEO, has said that the corporate hierarchy is willing to take a $100-million net income loss to fund employment rosters, new offices, ads and marketing and product development. "It's [a lower figure] than what the competitors are spending," Chamberlin notes.
But the national market, as he sees it, is moving quickly, so the investment doesn't come too soon. "Delivering an integrated set of values to customers is really difficult and I think a lot of people talk about it ¼ the test of that is whether or not we're able to build a relationship with a customer and build that value over a long period."
The Customer's Middleman
Xenergy Inc., Burlington, Mass.
Ownership: A subsidiary of NGE Enterprises Inc., an unregulated subsidiary of New York State Electric & Gas Corp.
Employees: 200, supplying services in California, Massachusetts and New Hampshire.
Business Volume: 200 MW, $30 million in estimated gross billings; revenues are about $40 million annually across all business lines.
Goal: To supply consulting, engineering, information technology and energy supply services throughout its target markets.
Largest Customers: The Massachusetts High Tech Council, The Massachusetts Office Supply Division.
Competitors: Strategic Energy Partners Ltd., National Energy Choice, New Energy Ventures.
What Defines the Company: Its record of understanding how to analyze energy usage information and how to present information to energy suppliers.
Company/Product Sketch: Though registered as an ESP in several states, Xenergy doesn't sell energy commodity. Its Energy Supply Services business unit consults on how to "package" electric and gas bills.
"We're an agent," says James Ferro, senior vice president. "We don't sell direct. We go out and find [energy] for you."
Xenergy tries to help clients understand what their risk factors are. Are they willing to take more risk on for a lower price? It examines what it can do with equipment to position clients for a better rate. Ultimately, clients' packaged bills interest suppliers because they can understand load shapes, power factors and other issues.
Company also conducts rate analysis and rate negotiation. Claims to save clients an average of 14.5 percent on energy bills.
Ferro says the company's goal is to be profitable: "If we can be the agent to a couple hundred million dollars worth of energy supply a year in the early stages, that's a nice goal."
Xenergy recognizes that some markets don't allow energy services companies to make money. Although it registered as a Pennsylvania ESP, it chose not to do business there because "more people were losing money than making money" in an early pilot, Ferro says. "The idea of selling at a loss goes kind of against