New Power attributes losses to delays in Texas market opening
Texas electricity retailer New Power Co. claimed delays in the start of the electricity pilot cost the company millions of dollars in income and called on the grid operator to be more forthcoming about its operations. The delay negatively impacted New Power's second quarter revenue by $3 million and earnings by $1 million, the company said.
By Ann de Rouffignac
HOUSTON, Aug. 9 -- Electricity retailer New Power Co. claimed delays in the start of the Texas electricity pilot cost the company millions of dollars in income and called on the grid operator to be more forthcoming about its operations.
"The summer months were not available to us or our customers," Eugene Lockhart, New Power CEO, said during a conference call earlier this week. "We had to buy commodity and we were unable to deliver it. There were a series of delays without notice and well beyond what we we're told."
The Electric Reliability Council of Texas Inc.'s inability to begin the pilot by the scheduled June 1 start date negatively impacted second quarter revenue by $3 million and earnings by $1 million, Lockhart said. The company, an affiliate of Enron Corp., Houston, reported second quarter losses of $55.6 million on $64.6 million in revenue Tuesday.
The problems will worsen in the third quarter, Lockhart said. He projected the delay in the Texas market will cut income $7-$9 million and revenue by $20-$25 million. New Power, Purchase, NY, signed up thousands of customers early in the spring anticipating a June 1 opening of the market. They planned power purchases for those customers.
"We purchase commodity when we sign up customers to match our book against customer count," said Lockhart. But only 73 of the 47,000 customers who elected to buy electricity from New Power are actually receiving it.
Lockhart called for better information from ERCOT. "We want them to be upfront about their operational ability," he said. "We want full disclosure and transparency of progress against measurable milestones of testing."
Lockhart said he preferred that ERCOT not "hide its status" concerning the rate of customer switching because that places the company in a "significant problem." The company said it is still uncertain if a proposed ramp up will occur, according to ERCOT's reported schedule, because of past delays.