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Retail Mechanics OverviewRetail Mechanics Overview

Bill BojorquezBill BojorquezDirector, Settlements andDirector, Settlements andCustomer ServiceCustomer Service

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AgendaAgenda

What is Retail Competition?

Customer Switch to New Competitive Retailer (Retailer)

How Does a Customer’s Bill Get Calculated?

Status of Switches

Questions and Answers

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What is Retail Competition?What is Retail Competition?

Reorganization of traditional monopoly electric service to allow utility operations and charges to be separated into generation, transmission, distribution and other services

Sale of electricity by a utility or other supplier to a customer in another utility’s retail service territory

Third party’s use of the local utility’s transmission and distribution lines to deliver power from a wholesale supplier to a retail customer

Allows customers to choose between competitive retail electric providers (Retailers) who will buy power from competing power generation companies (PGCs)

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What is Retail Competition? What is Retail Competition? (cont’d)(cont’d)

Provides small customers the option of staying with the Retailer affiliate of their current electric utility with the guaranteed six percent rate reduction, called the “price to beat”

Requires designation of a “provider of last resort” that is obligated to serve any customers in its service area with a basic, standard retail electric service package

Removal of state regulatory agency setting prices for energy

Also known as “open access,” “retail access,” or “retail wheeling”

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The steps in this process remain the same, however the players change

Competition allows the choice of who generates the power

How power actually gets to the end-user does not change

What Does It Really Mean?What Does It Really Mean?

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Customer Switch ScenarioCustomer Switch Scenario

Customer can cancel the switch within 3 business days

Retailer sends switch request & ERCOT acknowledges

ERCOT sends switch notification to customer

Customer signs with Retailer

Retailer

Customer

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Customer Switch CompletionCustomer Switch Completion

Retailer

4. ERCOT forwards final meter read to

Retailers

2. Utility sends meter data

3. Completes switch

Utility

1. Utility reads meter

Customer

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How Does A Customer’s Bill How Does A Customer’s Bill Get Calculated?Get Calculated?

3. ERCOT sends balancing energy and ancillary services charges to QSE

QSE

Utility

1. Utility sends monthly usage information to ERCOT

6. TDSP sends transmission & distribution charges to Retailer

Retailer

2. ERCOT forwards monthly usage information to Retailer

4. QSE forwards ancillary services charges to Retailer

PGC

5. PGC sends energy charges to Retailer

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Retailer

Charges to Retail CustomerCharges to Retail Customer

Retail Customer Bill

Monthly Usage

Energy Charges

from PGC

Trans. & Dist. Charges

Balanced Energy & AS Charges from

QSE

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0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Additions 5,429 5,825 18,468 28,778 20,000

Cumulative 5,429 11,254 29,722 58,500 78,500

30-Aug 6-Sept 13-Sept 21-Sept 27-Sept

Switch Ramp-up ProjectionsSwitch Ramp-up ProjectionsN

um

ber

of

ES

I ID

s GoalAs of 9/21:

58,500

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Status of Switches in ProcessStatus of Switches in Process

• Over 50,000 switches have been added over the last 3 weeks

• It takes between 15 and 45 days for new CR to start flowing power (completed)

• 15 days allowed for customer review and cancellation

• Total in chart: 58,5000

5,000

10,000

15,000

20,000

25,000

30,000

Series1 3,155 26,332 29,013

Completed Aw aiting Final

Meter ReadIn Customer/ Utility Review

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Definitions and AcronymsDefinitions and Acronyms

Competitive Retailer (Retailer) – a municipally-owned utility, generation and transmission cooperative (G & T cooperative), or distribution cooperation that offers customer choice in the restructured competitive electric power market in Texas or a Retail Electric Provider (REP).

Customer – a person or entity who purchases and ultimately consumes electricity at a single premise.

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Definitions and Acronyms Definitions and Acronyms (cont’d)(cont’d)

Customer Choice - the freedom of a retail customer to purchase electric services, either individually or on an aggregated basis with other retail customers, from the provider or providers of the customer’s choice and to choose among various fuel types, energy efficiency programs, and renewable power suppliers.

Electric service identifier (ESI ID) – a unique and permanent identifier assigned to a premise.

Electric Reliability Council of Texas, Inc. (ERCOT) - a Texas nonprofit corporation that has been certified by the PUCT as the Independent Organization, as defined in §39.151 of PURA, for the ERCOT Region.

Power generation company (PGC) – a company, registered by the PUC, which generates electricity that is intended to be resold.

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Definitions and Acronyms Definitions and Acronyms (cont’d)(cont’d)

Premise – a service delivery point or combination of service delivery points that are assigned a single Electric Service Identifier (ESI ID) for purposes of registration, switching and settlement.

Provider of last resort (POLR) –a REP certified in Texas that has been designated by the PUC to provide a basic, standard retail electric package to requesting or default customers.

Retail Electric Provider (REP) – a certified person or company that sells electric energy to retail customers in Texas.

Service delivery point (SDP) – the specific point on the utility’s electric system where electricity flows from the utility to an end-use load. Service delivery points may be metered or unmetered.

Settlement - the reconciliation by ERCOT of administrative, miscellaneous, and market charges for the applicable market services.

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Questions and AnswersQuestions and Answers