The New Power Company fired the latest shot last week in itstwo-month-long battle with Green Mountain Energy Co. and PecoEnergy over the placement of more than 300,000 of PECO’selectricity customers. New Power announced late last week that itintended to file a protest with the Pennsylvania Public UtilityCommission (PUC) regarding the companies’ actions in allocatingthose customers.

The fighting between the companies started in October when PECOneeded to place some of its electric customers. In accordance withrequirements stipulated in PECO’s 1998 settlement of its ElectricRestructuring Case, PECO began a bidding process to find a thirdparty to supply competitive default service to 20% of itsresidential customers for a three-year term beginning January 1,2001.

After a bidding period in October, New Power was awarded 299,300electricity customers by PECO, but Green Mountain Energy disputed thetransfer (see Daily GPI, Dec. 8). ThePennsylvania PUC, however, overruled Green Mountain’s charge that PECOdid not negotiate in good faith pertaining to the bidding process, andsanctioned awarding the customers to New Power.

In the latest twist last week, New Power is protesting acontract between Green Mountain and PECO which allegedly assigns anadditional 50,000 customers unilaterally to Green Mountain.

“Under the Restructuring Settlement Agreement, PECO must serveas the electric service provider for all retail electric customersin its service territory that do not choose an alternativesupplier,” said Marc Manly, managing director for Law andGovernment Affairs for New Power.

New Power pointed out that there are two exceptions to theagreement, one of which New Power is taking advantage of with thecompetitive default service rule. The other exception could beenforced if by Jan. 1, 2001, less than 35% of all PECO’sresidential and commercial customers had not switched suppliers.Then, under the settlement PECO would be forced to assign customersto all licensed suppliers in its area on a random basis. “Webelieve that PECO has no legal authority to assign customers in aprivate deal in order to meet the 35% threshold requirement,” addedManly.

“We believe that the integrity of the competitive energymarketplace in Pennsylvania is hurt by PECO’s attempt to give awaycustomers to Green Mountain,” said H. Eugene Lockhart, CEO of NewPower. “Pennsylvania is widely regarded as the model of energyrestructuring. To simply assign 50,000 residential customers toanother provider, borders on slamming. Clearly, this runs counterto the public policy goals of deregulation and consumer protectionthat are of utmost importance to the Legislature and the PUC.”

After being launched in May by strategic partners Enron, IBM andAOL, and completing its IPO in early October, New Power has beenmoving at a brisk pace, especially during the month of December (seeDaily GPI, Oct. 6). Already this month,NPC has been approved to market electricity in two additional states,gained gas marketer certification in Georgia and acquired assets andcustomers in Ohio and Indiana. The company expects to begin service in2001.

New Power has also been purchasing customers in states acrossthe East Coast. In October, the company began to acquire electriccustomers in select utility markets in Pennsylvania and New Jersey.

Earlier this year, the company picked up about 85,000 Georgianatural gas customers (6% of market) in its June acquisition of almost300,000 natural gas and electricity customers within eight states fromColumbia Energy Group (see Daily GPI, July5).

The company also inked an acquisition deal last week with aNiSource subsidiary. Under the agreement with Energy USA Retail,New Power will acquire 34,000 retail gas customers of Columbia Gasof Ohio and Northern Indiana Public Service, along with relatedassets.

“The Energy USA Retail acquisition is a good strategic fit forThe New Power Company,” said Lockhart. “Most of these gas customersare in areas where we will begin marketing electricity in 2001.These consumers will have the opportunity to realize the benefitsof the deregulated energy marketplace and enjoy considerablesavings.”

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