NGI The Weekly Gas Market Report
Surprising even itself, Consumers Energy announced last weekthat in only eight months of the Gas Customer Choice program,100,000 of its customers switched to an alternate supplier,reaching the limit for the first year of the plan. Out of the 10suppliers vying for Consumers’ market, Sempra Energy affiliateEnergy America-Michigan topped the list by signing 90% of theenrollments, a Michigan Public Service Commission (MPSC)spokesperson said.
At $2.84 per Mcf, the rate offering is the same from both EnergyAmerica and Consumers, but Energy America is adding a rebate of5-7% after three years of service. One supplier, who declined to benamed, said that Energy America’s success stemmed from itsaggressive marketing tactics, and not its offer. “We offered alower rate than Consumers and Energy America but did not put in amajor promotional effort. They [Energy America] hired a massivesalesforce that beat the streets and signed the customers. I guessyou’ve got to take your hat off to them.” CMS Marketing, Services,& Trading was second on the list with 5,000 enrollments.
Consumers viewed the announcement as a sign that deregulationworks. “This tells us that a competitive marketplace can developvery quickly,” said Paul Elbert, Consumers’ CEO, “and it also tellsus that customers want the power of choice and when they get it,they’re going to use it.”
Jeff Holyfield, a Consumers spokesman said, “We didn’t know whatto expect. But it is safe to say that nobody thought we’d reach100,000 before a year passed.”
Consumers’ three-year Gas Customer Choice Program began on April1. It allows 100,000 customers each year of the plan to exploreoffers from the 10 companies Consumers has approved. Overall, theutility is Michigan’s largest, serving six million of the state’s9.5 million residents in all 68 lower peninsula counties. Companiesin the program include Energy America, CMS Marketing, Services &Trading, DTE-CoEnergy, EMC Gas Transmission, Eastcoast Gas,Howard/Avista, MichCon Fuels, Michigan Gas Exchange, Unicom EnergyServices, and WPS Energy Services.
In related news, two other Michigan utilities have three-yearpilot deregulation programs that allow alternate suppliers to startservice April 1. Semco Gas, which serves 210,000 customers insoutheastern Michigan, received MPSC permission to start itsprogram on Sept. 11. It allows 8,000 customers each year to switchto one of seven alternate suppliers. Sign-ups for the plan aretaken on a first-come, first-served basis. Alternate suppliersvying for Semco’s customers include WPS Energy, Columbia Energy,Semco Energy Service, OGE Energy Resources, Energy America,Michigan Schools Energy Cooperative, and Consumers. Semco has notreleased the number of customers that have signed with anothercompany.
Sign-ups for Michigan Consolidated Gas Co.’s pilot program willstart Jan. 1. This is a voluntary program open to all of its 1.2million residential customers on a first-come, first-served basis.Up to 75,000 customers per year can switch to a new supplier over athree-year period beginning on April 1, 1999 for a total of 225,000customers. Seven suppliers, including Columbia Energy, Consumers,and Energy America, will take part in this program.
©Copyright 1998 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 1532-1266 |