Energy Markets in TurmoilThe Consumer Perspective

Sonny Popowsky Consumer Advocate of Pennsylvania

Illinois State University

Institute for Regulatory Policy Studies

Springfield, IL

May 17, 2001

PA Office of Consumer Advocate555 Walnut Street

Forum Place, 5th FloorHarrisburg, PA 17101-1923

(717) 783-5048 Telephone(800) 684-6560 (PA Consumers

toll-free)paoca@ptd.net Ž

www.oca.state.pa.us63682

Pre-MergerNational League Standings

2000 Season

W L PCT GB

Braves 95 67 .586 -

Mets 94 68 .580 1.0

Marlins 79 82 .491 15.5

Expos 67 95 .414 28.0

Phillies 65 97 .401 30.0

W L PCT GB

Cardinals 95 67 .586 -

Reds 85 77 .525 10.0

Brewers 73 89 .451 22.0

Astros 72 90 .444 23.0

Pirates 69 93 .426 26.0

Cubs 65 97 .401 30.0

CENTRALEAST

63646.ppt

Post-MergerNational League Standings

May 10, 2001

W L PCT GB

Phillies 20 13 .606 -

Braves 16 18 .471 4.5

Marlins 14 18 .438 5.5

Mets 14 19 .424 6.0

Expos 13 21 .382 7.5

W L PCT GB

Cubs 21 12 .636 -

Astros 17 15 .531 3.5

Cardinals 17 15 .531 3.5

Brewers 17 16 .515 4.0

Reds 16 17 .485 5.0

Pirates 12 20 .375 8.5

CENTRALEAST

“Among states where deregulation has occurred, Pennsylvania has emerged so far as the place where the promises of competition and lower prices are being met most successfully.”

New York Times, “A Dwindling Faith In Deregulation”, September 15, 2000

60674.ppt S2

The Most Important Provisions In The Pennsylvania Electric

Restructuring Law

1. The Rate Cap Provision

2. The Rate Cap Provision

3. The Rate Cap Provision

Retail Competition Actually got off to a Reasonable Start in

Pennsylvania

1.8 million consumers volunteered for the 230,000 slots in the

competitive pilot

Pennsylvania - Number of Consumers ShoppingApril 1999 - April 2001

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

April 1 '99 July 1 '99 Oct. 1 '99 Jan. 1 '00 April 1 '00 July 1 '00 Oct. 1 '00 Jan. 1, '01 April 1, '01

New Power

Industrial

Commercial

Residential

Includes 253,253 customers of New Power under Competitive Default Service

Peak Load Share for Competitive SuppliersApril 2001

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

AlleghenyPower

Duquesne Light GPU Energy PECO Energy* PPL

Per

cent

Residential

Commercial

Industrial

Statewide Competitive Load (mW)

-

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

Quarter

Load

in m

W

July 2001?

Duquesne - Competitive Load by Class (%)

0

5

10

15

20

25

30

35

40

45A

pr-9

9

Jul-9

9

Oct

-99

Jan-

00

Apr

-00

Jul-0

0

Oct

-00

Jan-

01

Apr

-01

Quarter

Per

cent

of C

lass

Loa

d

Residential

Commercial

Industrial

Price per kWh 500 kWh 1000 kWh Price per kWh 500 kWh 1000 kWh

60592.ppt

Average Price to Compare in Cents per kWh 5.65 ¢

500 kWh 1000 kWh First 500 kWh 5.55 ¢ $27.75 $58.80 over 500 kWh 6.21 ¢

Winter: October - May All kWh 5.55 ¢ $27.75 $55.50

Monthly Generation & Transmission Bill

Summer: June - September

PECO Energy Rate R Regular Residential Service

Licensed Competitive Suppliers:

Agway Energy ServicesOffer for non-heating oil customers 5.25 ¢ $26.25 $52.50Offer for Agway heating customers 4.95 ¢ $24.75 $49.50

Allegheny Energy Supply 4.95 ¢ $24.75 $49.50

American Cooperative 5.60 ¢ $28.00 $56.00

electricAMERICA100% hydro 4.80 ¢ $24.00 $48.00

Energy Cooperative Association of Pennsylvania 100% renewable 6.37 ¢ $32.27 $64.12

Exelon Energy 5.58 ¢ $27.90 $55.80

Green Mountain Energy Company 1% renewable Plus $3.95 per month 5.52 ¢ $31.55 $59.15

50% renewable Plus $3.95 per month 6.46 ¢ $36.25 $68.55

100% renewable Plus $3.95 per month 7.09 ¢ $39.40 $74.85

Plus $5 annual fee (waivable for senior cit izens, low income & persons with disabilit ies)

Mack Services Standard 5.49 ¢ $27.45 $54.90 100% renewable 6.37 ¢ $31.85 $63.70

6 month Value Power Plan 4.16 ¢ $20.80 $41.6012 month Standard Savings Plan 4.99 ¢ $24.95 $49.90

OnlineChoice.com Standard Electronic billing only 4.52 ¢ $22.60 $45.2050% renewable Plus $3.95 per month 6.46 ¢ $36.25 $68.55

Power Choice 5.45 ¢ $27.25 $54.50

Power Direct Standard 5.10 ¢ $25.50 $51.00Clear Choice Environmental Option 5.90 ¢ $29.50 $59.00

Utility.com Electronic billing only 4.52 ¢ $22.60 $45.20

--Green-e Certified

New Power Company

October1, 2000

PECO Energy Rate R Regular Residential Service Average Price to Compare

in cents per kWh 5.67 ¢500 kWh 1000 kWh

$27.85 $59.05First 500 kWh 5.57 ¢over 500 kWh 6.24 ¢Winter: October - May All kWh 5.57 ¢5.57 ¢ $27.85 $55.70Competitive Discount Service provided by New PowerNew Power CDS Average Price to Compare per kWh 5.536 ¢

$27.19 $57.62First 500 kWh 5.438 ¢over 500 kWh 6.085 ¢Winter: October - May All kWh 5.438 ¢5.438 ¢ $27.19 $54.38*Price to compare for PECO's Competitive Discount Service provided by New Power effective with April 2001 billing.

This service is available only to preselected PECO/New Power CDS customers.

Summer: June - September

Monthly Generation & Transmission Bill

Summer: June - September

Licensed Competitive Suppliers:

Agway Energy Services Offer for non-heating customers 7.50 ¢ $37.50 $75.00

Offer for Agway heating customers 7.00 ¢ $35.00 $70.00Allegheny Energy Supply 7.35 ¢ $36.75 $73.50electricAMERICA 50% hydro 5.65 ¢ $28.25 $56.50Energy Cooperative Association of Pennsylvania EcoChoice 100% renewable 6.37 ¢ $32.27 $64.12

Standard 5.25 ¢ $26.67 $52.92Plus $5 annual fee (waived for seniors, low-income & persons with disabilities)

Green Mountain Energy Company 1% renewable 5.52 ¢ $31.55 $59.15 50% renewable 6.46 ¢ $36.25 $68.55

100% renewable 7.09 ¢ $39.40 $74.85Plus $3.95 per month

Mack Services 100% renewable 7.53 ¢ $37.65 $75.30

New Power Company Two year plan 7.50 ¢ $37.50 $75.00

Price per kWh Price per kWh500kWh 1000 kWh 500kWh 1000 kWh

April

2001

Suppliers Serving Residential Customers in PECO(October 1999 through April 2001)

0

2

4

6

8

10

12

14

16

18

20

Month

Num

ber o

f Sup

plie

rs

Number of Suppliers Cheaper than PECO

0

2

4

6

8

10

12

14

16

18

Oct

-99

Nov-

99

Dec-

99

Jan-

00

Feb-

00

Mar

-00

Apr-

00

May

-00

Jun-

00

Jul-0

0

Aug-

00

Sep-

00

Oct

-00

Nov-

00

Dec-

00

Jan-

01

Feb-

01

Mar

-01

Apr-

01

Num

ber o

f Sup

plie

rs

Actual Usage and Savings for PPL Residential Customer, All-electric Home Switched to Utility.com

Months in year 2000

Usage in kWh per month

PPL

Generation & Transmission

Utility.com Generation & Transmission

Savings

February 2543 $112.57 $94.19 $18.38

March 2392 106.12 88.59 17.53

April 1440 65.47 53.37 12.10

May 1343 61.33 49.74 11.59

June 1163 53.64 43.08 10.56

July 1286 58.89 47.63 11.26

August 1252 57.44 46.41 11.03

Totals $515.46 $423.01 $92.45

Competitive Residential Electric Price Components - Cents per kwh

Electricity &

Capacity2.50 + .30= 2.8

3.25 + .30= 3.55

4.25 + 1.75 = 6.00

Losses (10%) .255 .325 .325

Wheeling .150 .150 .150Billing, etc. .500 .500 .500

EDI & IT .200 .200 .200Security Pmt. .005 .006 .007

Admin. .350 .350 .350

Profit .200 .200 .200

Billed Amt. 4.60 5.281 7.732

Are You Aware of Customer ChoiceRespondent = "Yes"

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Perc

ent

Do You Know How to Shop?Respondent = "Yes"

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jun-98 Aug-98 Dec-98 Mar-99 Sep-99 Mar-00 Mar-01

Perc

ent

Shopping: Awareness v. UnderstandingResponses = "Yes"

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jun-98 Aug-98 Dec-98 Mar-99 Sep-99 Mar-00 Mar-01

Perc

ent

Are you Aware ofCompetition

Do You Know How toShop

PJM Spot Market Monthly Average Energy Price Results

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100Ja

n-99

Feb-

99

Mar

-99

Apr

-99

May

-99

Jun-

99

Jul-9

9

Aug

-99

Sep-

99

Oct

-99

Nov

-99

Dec

-99

Jan-

00

Feb-

00

Mar

-00

Apr

-00

May

-00

Jun-

00

Jul-0

0

Aug

-00

Sep-

00

Oct

-00

Nov

-00

Dec

-00

Jan-

01

Feb-

01

Mar

-01

$/M

Wh

On-Peak Spot vs. Forward PricesComparison of Last Settlement Price before Contract Month to Actual Avg. Spot Price

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180JA

N99

MA

R99

MA

Y99

JUL9

9

SE

P99

NO

V99

JAN

00

MA

R00

MA

Y00

JUL0

0

SE

P00

NO

V00

JAN

01

MA

R01

Contract

$/M

Wh

Forward Price Monthly Avg On-Peak Spot Price

PJM Forward Market - 1999, 2000 & 2001

-

20.00

40.00

60.00

80.00

100.00

120.00

140.00

Jan Feb Mar April May June July Aug Sept Oct Nov Dec

1999

2000

2001

PJM Daily Capacity Credit MarketJanuary 1999 - March 2001

0

50

100

150

200

250

300

Jan-

99

Mar

-99

May

-99

Jul-9

9

Sep-

99

Nov

-99

Jan-

00

Mar

-00

May

-00

Jul-0

0

Sep-

00

Nov

-00

Jan-

01

Mar

-01

$/m

W-d

ay

PA Gas Switching Statistics as of 04/01/01Company Total Residential

CustomersResidential using Alternative Suppliers

Columbia 355,256 94,466

Dominion-Peoples 325,146 110,399

Equitable 241,699 18,900

NFG 200,211 0

PECO 399,316 0

PG Energy 139,022 0

PPL 65,281 0

T W Phillips 54,723 0

UGI 249,762 0

Valley Cities-NUI 4,412 0

Total 2,034,828 225,765

Henry Hub Natural Gas Spot Prices

$0

$1$2

$3

$4

$5$6

$7

$8$9

$10A

pr-9

8

Jul-9

8

Oct

-98

Jan-

99

Apr

-99

Jul-9

9

Oct

-99

Jan-

00

Apr

-00

Jul-0

0

Oct

-00

Jan-

01

$/m

mB

tu