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Proposed Amendments to the Massachusetts Electric Utility Restructuring Act of 1997. January 30, 2004 Massachusetts Restructuring Roundtable Patrick G. Jeffery Vice President, Govt. Affrs. (978) 764-6398 [email protected]. British Gas Corporation. 1985. Privatization. - PowerPoint PPT Presentation
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Proposed Amendments to the Massachusetts Electric Utility Restructuring Act of 1997
January 30, 2004January 30, 2004Massachusetts Restructuring RoundtableMassachusetts Restructuring Roundtable
Patrick G. JefferyPatrick G. JefferyVice President, Govt. Affrs.Vice President, Govt. Affrs.(978) 764-6398(978) [email protected]@na.centrica.com
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Centrica’s Origins
Key Facts Today
US$23bn annual turnover
US$13bn market capitalisation
Serves over 20 million households
Sales average 2 products per household
38,000 employees (of which 2,500 in North America)
Long term credit rating A2/A
British GasCorporation
British Gas plc
Centrica plc
Centrica plc
Privatization
Demerger
Competition &diversification
1985
1997
1997-2003
BG plc
+
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Centrica’s UK Business Units
Gas and electricity production, trading,commodity sourcing, risk management
Gas, electricity, home services
Roadside assistance, travel services, automobile sales and service, home & motor insurance, financial services
Retail telecoms, mobile, broadband
B2B energy and servicesbusiness services
EEMMGG
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1.9 million households taking2.8 million energy and servicesproducts in Ontario
Gas customersin Manitoba
Oil and gas liquidsproduction in Alberta
Electricity customers in Houstonand Dallas/Fort Worth
770,000 electricitycustomers in Westand South Texas
Gas customersin Georgia
Gas customersin Michigan, Ohioand Pennsylvania
Business services customersacross Canada
Main Offices
980,000 gas andelectricity customersbeing acquired inAlberta
Centrica’s North American Business
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This Proposal is designed to improve the quality of delivery service and reliability in Massachusetts, while providing consumer benefits similar to those achieved in Texas and the UK.
Rep. Bosley’s familiarity with the Texas experience is reflected in his proposal, which improves upon the successful Texas model. The main concepts in Rep. Bosley’s proposal have our full support.
Key focus is on the structural separation of Retailing and Wires function.
Two companies in lieu of the current Utility. Transitional process for Retail Services (no metering change in
our current proposal).
The Central Elements of the Proposal for Massachusetts
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Benefits of Texas-Style Restructuring
Customers are saving $. Customers have choices of providers and products. Customers are switching to new entrants. Costs and functions effectively separated. Other benefits to economy – jobs, taxes. Marketers face incentives for innovation, efficiency
and customer care. Wires Company focuses on increasing reliability of
core delivery services.
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Choices available to Consumers in Texas
In five T&D service areas, residential customers have:• Between 6 and 12 choices of REPs, including the
affiliated REP.• Upwards of 11 products to choose from,
including renewable energy in most areas.
As of September, 2002, approximately 19 REPs in all service territories open to competition serving commercial and industrial customers.
[Texas data is from the “Report to the Texas Legislature: Scope of Competition in Electric Markets in Texas” Public Utility Commission of Texas, January, 2003]
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Consumer Benefits and Switching in Texas
In Houston, for example, there are 8 REPs with a total of 10 offers other than PTB.
7 of those offers are less than PTB
– Over the last 6 months, offers are from 1% to 23% under PTB (currently 16% max discount)
– The three offers not below PTB are green products. Over 1.1 million customers have switched (to a non-affiliated REP,
reported in restructuring Today, January, 2003). [Texas data is from the “Report to the Texas Legislature: Scope of Competition in Electric Markets in Texas”
Public Utility Commission of Texas, January, 2003, and www.powertochoose.org/yourchoice ]
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Below are some companies who serve residential customers today in Texas
www.powertochoose.org/yourchoice
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Other Benefits to Texas Economy
Over 5,000 additional permanent jobs Nearly $40 million in additional retail sales Over $200 million in additional personal
income $350 million in additional gross product for
state[Texas data is from the “Report to the Texas Legislature: Scope of Competition in Electric Markets in Texas”
Public Utility Commission of Texas, January, 2003]
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Transition To New Structure
Mass market customers auctioned to RSPs with DTE oversight (Utility Affiliated RSP (“ARSP”) can bid).
Customers receive more choice than status quo as they can “opt out” of Auction under Bosley plan.
Large C&I customers will experience market-based pricing.
Retail Services provided through ARSP through DTE approved tariff.
SOLR service mimics Texas POLR solution.
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Utility ARSP Provides Retail Services
Retail Services include billing and customer service. Retail Services will be tariffed. DTE to set rates, terms and conditions for Retail
Services. Competitive RSPs must purchase Retail Services
through the ARSP’s tariff for one year. Proposal assures quality of basic retail functions. Provides Utility a full year to adjust its operations for
the new market.
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Massachusetts is Poised to Become the Next Leader in Electric Restructuring
The Proposal represents the opportunity for Massachusetts to become a national leader in electric restructuring, by embracing a restructuring plan for residential consumers that provides more customer choices and greater consumer benefits than other Choice programs in the US.
