Texas electricity retailers fear pilot delayed by months

Texas' retail electricity pilot project could be delayed until at least October industry sources said despite state regulators' reassurances it will get under way this summer. The pilot was originally scheduled to begin June 1 but has been rescheduled twice. Full scale electric competition is scheduled to begin Jan. 1, 2002.


By Ann de Rouffignac
OGJ Online

HOUSTON, July 10 -- Texas' retail electricity pilot project could be delayed until at least October industry sources said despite state regulators' reassurances it will get under way this summer.

The pilot was originally set to begin June 1 but has been rescheduled twice. Full scale electric competition is scheduled to begin Jan. 1, 2002.

Sources close to retail electric suppliers who planned to compete in the pilot said it cannot go forward on the schedule recently outlined by the Electric Reliability Council of Texas Inc. (ERCOT), because the grid operator is having trouble automatically switching customers from utilities to their new suppliers.

As recently as July 3, ERCOT said in a press release retail customers should begin receiving service from their new suppliers later "this summer."

ERCOT said it was developing systems to handle "approximately 21,000 switch requests a day," according to the release, and will "accelerate the number of switches when the systems are operating smoothly."

However, retailers were not convinced about ERCOT's system readiness and made their concern clear in a letter to the Texas Public Utility Commission Monday. They said ERCOT should "immediately hire and train additional staff members so additional switches may be processed."

The retailers also questioned why the grid operator could only handle 125 problem applications a week. Some customer requests for new suppliers apparently do not have the proper data attached to allow a smooth transition from the incumbent utility to the new provider and ERCOT's computer kicks them out as "exceptions."

Earlier, New Power Co., Purchase, NY, representing the Alliance for Retail Markets (AES NewEnergy, a unit of AES Corp., Arlington, Va.; Enron Energy Services, Houston; Exelon Energy, a unit of Exelon Corp., Philadelphia, Pa.; GreenMountain Energy Co.; Austin; New Power Co., and Strategic Energy, Pittsburgh, Pa.) met with Commissioner Brett Perlman to discuss the delay of the pilot project.

Shell Energy Services Co. LLC complained in a June 29 letter ERCOT could switch very few customers and those switches had a high error rate. Of the 63 enrollment transactions Shell Energy submitted to ERCOT through June 22 and for which responses were due by June 28, only three were processed within the time required by protocols, resulting in a 95% failure rate, the company said. Forty responses are still missing.

Of the 23 responses received, only 13 contained the correct data necessary to process the transaction, making manual intervention necessary, Shell said. If ERCOT is to correct its problems, the grid operator should concentrate on not producing the exceptions in the first place from its own systems, Shell said.

Shell also expressed doubt over whether the transmission and distribution utilities and the retailers will be able to exchange monthly usage information needed for timely and accurate customer billing. Shell claimed ERCOT has "ignored" the monthly billing process and the interfaces between the utilities and the retailers that allow meter reading and billing to go smoothly.

Those two business functions are still in the "testing" phase at ERCOT.

Sources close to certain retailers that planned to serve commercial and industrial customers in September reported they are "worried" ERCOT still won't be ready then, making it next to impossible to deliver power as promised to those customers.

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