Texas marketers divided on start of retail electric pilot

By Ann de Rouffignac
OGJ Online

HOUSTON, July 19 -- Some Texas electricity retailers urged the Texas Public Utility Commission to postpone opening the market to competition until the accuracy of customer billing can be guaranteed.

Large retailers spelled out their objections to moving ahead with a retail pilot prior to a meeting in Austin Thursday. Others said the independent system operator shouldn't wait until it is "error free" to implement the pilot.

At the conclusion of the meeting commissioners recommended no changes to the existing schedule.

A retail choice pilot program was scheduled to begin June 1. But the opening was delayed for the third time until July 31 because of problems at the Electricity Reliability Council of Texas Inc.'s (ERCOT) computer systems. Some market participants said July 31 could be premature.

Shell Energy Services LLC, a unit of Shell Oil Co., Houston, said ERCOT shouldn't rush to open the retail market. Texans have had "decades of monopoly service by the electric utilities. A few more weeks shouldn't matter," Shell said in filings with the PUC.

"While we agree that delay may erode consumer confidence in the market, far more damage will be done if the market opens prematurely resulting in customer switching errors, missed transactions, and billing mistakes," Shell argued.

Instead, Shell said the pilot should be delayed until consumers can be guaranteed "reliable service, seamless transfer of customers, and timely and accurate billing." The Houston company said at least 95% accuracy for meter reads and invoicing is necessary due to the importance of timely and accurate customer billing.

A group calling itself the Independent Retailers, including AES New Energy Inc., a unit of AES Corp., Arlington, Va.; Green Mountain Energy Co., Austin; and New Power Co., Purchase, NY; said the market should "tolerate a certain error amount and phasing-in as the cost of ending the pilot program delay."

But, separately, New Power Co. complained about accuracy in invoicing and billing systems. To date, the market has not fully "provisioned" a customer from start to finish nor tested monthly usage transactions, invoices, nor statements, New Power said.

The company said problems occurred during attempts to reconcile customer invoices and monthly usage data during the testing of these systems by ERCOT. "New Power is concerned therefore that the ability for competitive retailers to accurately bill a customer is at stake," the company explained.

To date the computer links between the utilities that have the metering data for individual customers and the retailers who serve those customers have not been tested, Shell said. If ERCOT keeps to its schedule of customer switching, 85,000 customers enrolled in the pilot will be switched before the first set of meter data is provided retailers by utilities.

"If problems develop in these yet-untested invoicing systems it may too late since manual bill processing could be an insurmountable task for retailers with tens of thousands of customers," Shell said.

Other retailers urged ERCOT and the PUC to select a realistic and "attainable" date for the full functioning of the retail pilot rather than announcing delays every 2 weeks that may "confuse and frustrate" potential customers.

"We would prefer an attainable date be chosen in the future and announced as the start of customer choice," said First Choice in comments filed at the commission.