The crazy quilt emerging in restructured markets only impedes competition.
The enthusiasm among energy retailers has become infectious. It grows as each successive state opens its market to competition. Yet behind the promise lies a grim reality.
Retailers struggle against a tide of thin margins, high customer-acquisition costs, inconsistent rules and regulatory prescriptions for the unregulated market. With all the rulemakings and workshops, the dollars budgeted by utilities to implement retail choice rise above even the level of spending to eradicate the Y2K millennium bug. Corporate strategy slips back and forth as if caught between the flippers in a pinball game. And customers, the target of all the economic affection, often seem aloof - torn between the safe haven of consumer protection and the allure of risk-based pricing. In short, customer choice experiences make apparent the need for new approaches in order for the larger market to succeed.
One problem is the diversity in approaches to information handling among restructured states. Lack of a coherent model for information processing, transfer and optimal use for market operations marks a key failing for which a remedy must be found, and soon. To the extent that can be done, the odds will improve that direct access will deliver economic benefits to customers. Failure to standardize the information architecture almost certainly will spell the demise of many competitors and delay the next stage of energy deregulation.
Patchwork of Markets