New Power lines up new scheduler for Texas market
Texas electricity retailers who used Enron to schedule their electricity with the Texas grid operator have to find an alternative now that the company has been temporarily suspended. NewPower Holdings Co. a 43%-owned affiliate of Enron, said Tuesday the company has already signed up with a another scheduler.
By the OGJ Online Staff
HOUSTON, Dec. 4 -- Texas electricity retailers who used Enron to schedule their electricity with the Texas grid operator have to find an alternative now that the company has been temporarily suspended.
Tom Noel, president of the Electric Reliability Council of Texas, said the grid operator suspended Enron Friday at midnight. ERCOT requires energy wholesalers moving electricity across ERCOT-controlled power lines to be a Qualified Scheduling Entity or QSE.
Houston-based Enron based filed for Chapter 11 bankruptcy protection Sunday. Retailers served by Enron had 72 hours to line up a new scheduler. Noel said he expected wholesalers to find schedulers in the short-term.
NewPower Holdings Co. , a 43%-owned affiliate of Enron, said Tuesday the company has signed up with a another scheduler. "We activated an agreement with APX," a spokeswoman said. She said the company, the largest alternative retailer in Texas, also has arrangements with multiple alternate power suppliers.
Earlier, CEO Eugene Lockhart said while Enron is a major counterparty, NewPower has a number of alternate supplier relationships and the ability to trade with, and be supplied by, 14 other counterparties. He added the company will be able to serve customer energy delivery obligations.
Lockhart said NewPower has sufficient cash and liquidity to do business at least through the second quarter of next year, but it may need additional financing to build natural gas inventories for the 2002-2003 winter heating season. The company said it is in discussions with several asset-backed lenders for that financing and believes that a transaction will be in place when needed.
ERCOT's Noel said he also was confident supply relationships will be established so there is no interruption in the market. "We see no jeopardy to the market participants from Enron's suspension as a QSE," he said.
The confusion in the market comes at a critical time. After a troubled pilot program, Texas is scheduled to open the market Jan. 1.
Separately, NewPower Holdings Inc. Tuesday reported it received $40 million, previously held in escrow. Under an October 2000 agreement between PECO Energy Co. and NewPower, NewPower supplies electricity to 200,000 of PECO's electric distribution residential customers in southeastern Pennsylvania.
As required by the agreement, NewPower deposited $50 million into an escrow account at the beginning of 2001 for the benefit of PECO, if NewPower failed serve the customers. Monday PECO and NewPower agreed that $40 million -- the maximum amount of escrow that can be released at this time -- would be refunded to NewPower. Tuesday, NewPower's stock closed up 5.21% to $1.01/share.