Chairman, President, and CEO, PNM Resources
Richard Stavros is Fortnightly's Executive Editor.
Fortnightly: What are your views on retail competition as a viable concept and your view of Texas as a viable market for growth?
Sterba: In the face of all of the things that have happened with natural gas, I view retail competition as still being a viable path under the appropriate market structure and the right regulatory discipline. By that, I mean the discipline not to mess with the market. Texas is probably the best model that I know of [that] has a long-term chance of success. Not without pain. Obviously, rates have moved up sharply in Texas, but through those price signals we start to see consumers changing behavior. It is one of the few markets where you have many competitors. There are 55 or so competitors in the marketplace.
As the price-to-beat come off at the end of 2006, the marketplace will demonstrate those customers who have previously not chosen to go to the competitive market are still going to get a fair shake and find a reasonable deal. But also, the market is seeing immediately the affects that natural-gas price movements are having.
Fortnightly: What is your view of recent state movements to extend rate caps or even reverse deregulation where it previously existed? Do you think retail competition is possible in a high-priced commodity environment?