Texas electricity retailers complain of inaccurate transactions

By Ann de Rouffignac
OGJ Online

HOUSTON, Aug. 9 -- More problems with the troubled Texas retail electricity pilot surfaced Wednesday, when the Electric Reliability Council of Texas reported system testing will not be completed until Sept. 12.

The pilot was originally scheduled to begin June 1. Now, power won't flow to all customers who have signed up until mid-October because of the wait required for a final meter read.

Retail electricity suppliers also complained to the Texas Public Utility Commission about inaccuracies, lost transactions, and inability to plan accurately for power delivery. One retailer said it doesn't even know how many customers it's supplying.

The pilot was delayed several times until ERCOT's wholesale market began running July 31. Wholesale transactions also have been plagued by erratic prices and concern over settling market transactions (OGJ Online, Aug. 6, 2001).

The repeated delays in getting customers who have signed up for the pilot switched to their new providers is beginning to have an impact on the bottom line of some retail providers. NewPower, an affiliate of Enron Corp., Houston, and one of the state's largest nonutility retailers, said this week it is losing millions of dollars in revenue and profits because of the delays. (See accompanying story: New Power attributes losses to delays in Texas market opening)

ERCOT spokeswoman Heather Tindall said switches of customers to new competitive electricity providers will proceed on a systemwide ramp-up schedule of 330/day starting Friday; 1,320 on Aug. 17; and 20,000/day by the first week of September. ERCOT is currently switching 10 customers/day/retail provider.

One retailer, who didn't want to be identified, says power is flowing to only 52 of the thousands of customers signed up the company. Even though ERCOT is accepting more requests to switch customers, the reliability of ERCOT's system and "missing transactions" continue to be a major problem, according to filings.

New Power Co. said the computer system is unavailable to accept initial switch requests for days at a time. With 47,000 customers signed up in Texas, New Power Co. insisted ERCOT must create a contingency plan to operate when ERCOT's computers aren't functioning.

Of even more concern, New Power said, are missing transactions and the impact this is having on the company's plans to buy power to serve customers. "Taking these missing transactions together, we cannot verify how many customers might be receiving power from us, which is problematic for obvious reasons," NewPower said.

Reliant Resources Inc., the retail arm of Reliant Energy Inc., Houston, also reported ERCOT errors and missing transactions have caused problems planning for power purchases. In several instances, a customer was switched by ERCOT, but Reliant Resources did not receive an approval of the switch request.

"This contributes to incorrect forecasting and creates supply imbalances that affect the settlement price and the REP's [Retail Electricity Provider] financial position," Reliant said. Not knowing exactly how many customers it is serving creates problems with timely and accurate billing, said Reliant.

Unlike other deregulated retail electricity markets, ERCOT is playing a central role in processing customer moves from the incumbent utility to the new provider. The process requires the provider to send an electronic switch request to ERCOT for processing.

Data flows between the utility, the new provider, and ERCOT before the switch is completed. Then, ERCOT sends a postcard to notify the customer of the switch. Time is allowed for the customer to cancel, if he wants. Finally, customers must wait until a final meter read is completed for power to flow from the new provider.