California regulators have given the green light to continueindefinitely the three-year-old incentive gas buying program atSouthern California Gas Co., dispensing at year-end 1998 with anannual review of the program, which has even drawn praise from theusually critical Office of Ratepayer Advocates (ORA) at theCalifornia Public Utilities Commission. The program reportedly hassaved millions of dollars for SoCalGas’ smallest customers who relyon the utility to buy their supplies. In 1998, SoCalGas reportsearning a $2 million award for its shareholders for the latest12-month operations of its so-called “Gas Cost IncentiveMechanism.” Based on benchmarked market prices if SoCalGas can dosignificantly better than the market average, resulting inquantifiable savings for its merchant customers, part of thosesavings flow back to its shareholders, who in this case are ownersof the SoCal parent, Sempra Energy. Shareholders have earned $16million in rewards through the incentive gas-purchase program overthe past three years, according to SoCalGas.
The New York State Public Service Commission adopted a set ofbusiness practices last week that are designed to streamline themanner in which local utilities interact with gas and electricitymarketers, energy services companies (ESCOs) and customers whopurchase energy in New York’s competitive market. The measurescover a wide range of issues, including minimum standards ofESCO/marketer creditworthiness, customer information exchangedbetween the utility and the supplier, billing procedures, switchingof customers, customer slamming protections, and dispute resolutionprocedures. “Simple, uniform procedures will help ensure soundbusiness practices that ultimately benefit everyone: customers,energy providers and the local utilities,” Commission ChairmanMaureen O. Helmer said. The procedures under which energycompetitors are expected to conduct their business are scheduled totake effect on May 1. The Uniform Business Practices for ESCOs,Marketers and Utilities (Case 98M1343) will be attached to acommission order
Rep. Joe Barton (R-TX), the new chairman of the House energy andpower committee, signaled that he wants the panel to hold hearingsearly next month on the antitrust aspects of the proposedExxon-Mobil merger. The call for a closer congressional review cameafter the Federal Trade Commission indicated it planned to take ahard-line approach to the merger. Heightened concerns over theantitrust implications of the mega-deal could force the two energycompanies to sell off more of their assets than was anticipated,analysts said. The proposed Exxon-Mobil deal is considered by farthe largest marriage of industrial companies based on marketcapitalization. Its combined market capitalization was put at $240billion.
Large Ohio wholesale natural gas provider Beldenergy haslicensed Prosper NRG Marketing’s “Direct to Market” service toprovide marketers targeting Columbus, OH, with the capability ofgiving prospective customers “Instant Savings Analysis.” Direct toMarket puts a form in the hands of a supplier’s prospectivecustomers through direct mail or insert into publications. Theend-user fills out the form with data on current energy costs paidto the incumbent utility and faxes it to Prosper. The form ismachine read, and a rate quote is generated and faxed back to theprospect with a contract. At the same time, information on theprospect is forwarded to the client or its call center. Thesupplier can then call the prospect for follow-up. “When energyderegulation happens in a market most residential and commercialcustomers are confused by the tidal wave of direct mail offers theyreceive from energy marketers,” said Prosper NRG Marketing’s GaryDrenik. “The Direct to Market makes it easier for marketers to selland customers to buy because it automatically calculates savings.Customers can easily understand the financial benefit they canreceive from switching suppliers. When consumers can get moreinformation with less hassle they’re not as confused and morewilling to switch.”
Duke/Fluor Daniel was awarded a turnkey contract last week tobuild a 550 MW, $240 million cogeneration plant in Dearborn MI.Details of the contract were not disclosed. Dearborn IndustrialGeneration L.L.C., an alliance between CMS Energy and DTE EnergyServices that founded the project, hired Duke/Fluor Daniel toconstruct the plant and begin operation by July. The facility isexpected to use 100 MMcf/d of gas to supply 400 MW of electricityand 1.7 million pounds per hour of steam to Rouge Steel and FordMotor Co. for 15 years.
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