TNPC Inc. unit New Power Co., the retail electricity company formed by Enron Corp., America Online, and IBM, will begin selling electricity in 10 New Jersey and 4 Pennsylvania counties where incumbent utilities have the most favorable transition rules for competitive providers, the company said Monday.
New Jersey customers will be guaranteed savings of up to 15% when switching from Public Service Electric & Gas Co. (PSE&G), and Pennsylvania customers will be guaranteed savings of up to 25% when switching from Peco Energy Co., New Power said in a statement. New Power said the savings apply to the electricity portion of customers' power bills and are based on the "price to compare'" for average annual residential bills under Rate Schedule RS for New Jersey, and Rate Schedule R for Pennsylvania.
Enron, IBM, and AOL and other investors are the stakeholders in the company formed in mid-May. Enron is providing the company with access to its energy commodity pricing, risk management, and government regulatory affairs expertise.
Enron�s risk management technology will be an integral part of the enterprise. IBM is building, staffing, and running the core components of the back office functions and helping develop the e-business strategy. New Power has a 6-year agreement with AOL, under which AOL subscribers can select New Power as their electricity and natural gas utility provider in deregulated markets in the US.
In an improving market for energy companies, TNPC Inc. is expected to net about $370 million from an initial public offering filed in July. The proceeds from the offering to be underwritten by Donaldson Lufkin & Jenrette Inc. and other financial companies will be used to acquire customers, build infrastructure, and for general corporate purposes, according to the filing. In New Jersey, New Power will be operating in Bergen, Essex, Hudson, Middlesex, Passaic, Somerset, Union, Burlington, Camden, and Gloucester counties.
In Pennsylvania, power will be available in Bucks, Chester, Delaware, and Montgomery counties.