Marketers are making a last-ditch attempt at establishing abeachhead for fair and open competition in the retail energy marketin Massachusetts. They lost a battle earlier this year whenregulators voted to allow utilities to assign portions of upstreamgas transportation and storage capacity to customers who wereseeking alternative suppliers. Marketers now hope they can persuaderegulators to establish a set of minimum standards for utilitytransportation service, not only for the retail customer, but alsofor the new utility customer, i.e., the retail marketer, as well.

If the utilities are held to a certain minimum level of service,perhaps once the mandatory capacity assignment period endsmarketers may return to compete for service, said Statoil Energy’sMartha Duggan, vice president of regulatory and government affairs.

“A lot of people have thrown up their hands and walked away,”she noted. “The economics have gone away completely [because ofmandatory capacity assignment]. We won’t be competing in the statein the very near future. But we thought it was important to get thecomments in and get the department thinking along the lines ofmarketer service. I am assuming their general proceeding [onunbundling] will go on for a while so we would like to have[standards] in place in case the economics ever change.”

In comments filed in a performance-based rate proceeding (D.T.E.99-84) at the Department of Telecommunication and Energy, energymarketers, including Statoil Energy, Enron Energy Services, NewEnergy Inc. and others, pleaded for regulators to establish someservice standards for utility service to retail marketers.

“We are saying that if you are going to measure and reward theutilities based on their service to customers, then recognize thatmarketers are also customers of utilities,” said Duggan. “Designrewards that are based on components that are important to us —like how fast we get the data, how accurate it is, how seamless isthe transaction, how many customers are actually choosing.”

The retail marketers are calling these standards “marketersatisfaction measures.” Marketers rely on the utilities forinformation as well as service, If either is poor, both themarketer and the end user suffer, retail marketers said in theircomments.

“The department can encourage utilities to improve service toretail marketers by adopting one very simple measure: the rate ofcustomer migration to competitive supply….. Indeed, if such aperformance measure had been in place during the first 13 months ofretail electric competition, the Commonwealth would likely had donefar better than the 0.1% switching rate that it achieved.”

Marketers suggest the department benchmark several functions:accuracy and timeliness of responses to requests for consumptionhistory; timeliness of processing enrollments; timeliness andaccuracy of billing and metering data; number and frequency ofbilling adjustments; number of complaints from marketers;timeliness and accuracy of flow orders, timeliness and accuracy ofalgorithms to determine deliveries; speed of response to inquiries.The results of the utility score can be used to reward or penalizethe utility.

“I wouldn’t say in general that [the utilities] have made itdifficult for us so far,” Duggan added. “I think that this is a newway of doing business for them, but they don’t necessarilyrecognize marketers as customers. The way transportation has grownup on many of these systems has been sort of like the way of thepoor stepchild of the company….. You got maybe a meter analystwho was in charge of transportation gas. That worked initiallybecause there weren’t that many customers involved [initially]. Butas we complete the opening of the market and would like to see lotsof customers choosing, we want to provide the utilities with anincentive to change the way that they think about deliveringservice to all their customers, including us.”

Duggan said based on attendance at recent departmentcollaboratives, the marketer pool has declined significantly sincelast year. “The market is in disarray at this point because of theimpact of the Feb. 1 order [on mandatory capacity assignment]…..Assignment of capacity has really put a wet blanket on the wholeeffort up there.”

Residential gas competition in Massachusetts was supposed tobegin Nov. 1 but because of the complexity of the capacityassignment rules and the decline in marketer numbers, there was adelay. The enrollment period is on-going. Marketers hope if theycan hammer out some basic standards of service, the stage might beset for competition to grow in the not-too-distant future.

Rocco Canonica

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