Around the Texas Electricity Blogosphere: 6/29/2011

Good afternoon, everyone. I just wanted to highlight some of the things happening in the Texas electricity market, from marketplace news as well as news regarding electricity providers.

Bounce Energy – First off, Texas Electricity Ratings partner Bounce Energy has had an extremely busy and productive week. First, they launched their new iPhone application. It allows you to pay your bill, look at historical usage, and even includes tips on saving energy. You can get that app here. And even cooler, they’ve launched a new platform that will allow customers to order electricity without ever leaving Facebook. This is a pretty cool technology upgrade that fits right in the wheelhouse for the country’s “most ‘liked’ electricity company.”

Twin Eagle Resource Management – Awhile back, I wrote about Twin Eagle Resource Management, a new company entering the Texas deregulated electricity marketplace. Now it looks like that will not be happening because of some questionable behavior. Paul Ring at Energy Choice Matters has some more details, specifically:

According to the SEC, the investigation arose, “out of Respondent’s [Doty] role in Dynegy’s materially misleading use of a structured-finance transaction called Project Alpha (‘Alpha’).” The SEC said that, “Alpha was essentially a $300 million loan to Dynegy, disguised as cash from operations through the purchase and sale of natural gas,” that, “had no business purpose aside from minimizing Dynegy’s taxes and narrowing the gap between Dynegy’s net income and operating cash flow.”

Whoops. For some clarity, Doty refers to Robert Doty, the Executive Vice Present and CFO of Twin Eagle. It’s unclear what will come of Twin Eagle at this point.

Bill Assistance – Finally, here’s an article from awhile back that has a list of different charities that help out people in financial need with their electricity bills. Each charity has different requirements for assisting people with their Texas electricity bills, but for people feeling a financial pinch, it is probably worth exploring.

Centerpoint And Usage History

I ran across this article from Paul Ring at Energy Choice Matters recently which discusses some changes Centerpoint is making in regards to a customer’s Usage History. In short, the article discusses a new automated Usage History Tool that Centerpoint is trying to implement for customers.

n April, CenterPoint announced the development of the new automated Usage History Inquiry Tool for use by Retail Electric Providers and other parties for accessing customer usage history, including Advanced Metering System (AMS) 15-minute interval usage and non-AMS IDR data.

Now, it doesn’t look like this tool would have immediate benefit to customers. However, something occurred to me as I was reading this. One of the most common complaints I receive through the website in regards to negative experiences is people complaining that REPs estimated their usage and sent them wildly inaccurate bills based on that estimated usage. Now, this isn’t supposed to happen, but it does happen with some regularity in the Texas electricity market. These estimations are often based on past years at the household on question.

If this new automated tool is actually more accurate, and in any way could make estimates based on historical usage for customers more accurate, it could go a long way towards cutting down on these complaints and increasing consumer satisfaction for Texas electricity. If the estimates are more accurate, and can be applied to the customer segment, that could be very beneficial.

Unfortunately, I have no idea if their new automated system will be able to be leveraged in this manner. And if it is, I have no idea if that is on the list of ways to utilize the resource. I’m simply expressing some of the thoughts I had as I read the article in question.

Around The Texas Electricity Blogosphere

Here are some interesting blog entries from Texas Electricity Ratings partners that I wanted to pass along.

Why Doesn’t Houston Bury Power Lines? – This article from Spark Energy discusses some of the reasons why we don’t see more communities burying power lines in Houston. Burying power lines is a common practice in other parts of the country, and would seem like common sense in a part of Texas that is prone to the occasional Hurricane. This article discusses some of the reason, and they’re not all related to the cost.

Bounce Energy – Bounce has written a number of blog posts lately focused on helping Texans during their moving process. The series includes an overview of the moving process, some pre-move tips, as well as post-move ideas and suggestions. It should come in handy for anyone moving this summer.

Direct Energy’s Disaster Supply Kit – And finally, Direct Energy indicates to you what should go in a Disaster Supply Kit. This is important, particularly for areas of Coastal Texas as hurricane season approaches. However last winter’s Ice Storms were a reminder to everyone that it is a good idea for anyone to have a disaster supply kit ready, regardless of whether you’re in a Hurricane zone or not.

Playing The Deregulated Field

Something I have noticed over the years in regards to the deregulated Texas electricity market is that most people seem to have a hesitancy about switching providers. Now, there are lots of reasons this might be the case. Some of it might be loyalty to incumbent providers like Reliant and TXU who they’ve known for decades. Other people just might not understand exactly how the market works, or they don’t want to deal with the hassle of regularly checking the market pricing to see if their current deals are competitive. Heck, some people might not even know the market is deregulated. Whatever the reason, lots of people in Texas do not shop for electricity with the same diligence and research that are standard when buying a piece of electronics, pricing cable or cell phone plans, or even the way they casually check pump prices at gas stations.

I was checking out the JD Power Website and came across a press release some interesting numbers in regards to deregulated natural gas in Georgia. Like the Texas electricity market, natural gas in Georgia is deregulated and customers can shop between a number of providers and seelct the one that suits them best. The survey into the satisfaction of natural gas studies shows that 15% of the 1.5 million Georgians in deregulated areas have switched their providers in the past year. Additionally, 15% of the people surveyed indicated that they planned on switching providers within the next 12 months.

It’s not unreasonable to assume that many of the people who have switched within the year and are planning to switching within the next 12 months are active within the deregulated gas market in Georgia. So lets assume that conservatively that 20% of the Georgia market is playing the deregulated gas field for the best prices and best service. I’m not certain what the numbers are for the percentage of Texans in the deregulated market, but if we estimate the number of potential deregulated customers at 18 million, I’m not sure that 20% of the Texas market are regularly shopping for electricity in Texas. If that’s the case, why not? In Georgia, only 1 in 5 people seem to be shopping regularly for gas, and you would think the question there would be why aren’t more people actively working the market to their advantage? And if my assumptions are true, not even 1 in 5 Texans are leveraging the market to their advantage. In an environment where we will all pass up gas stations for a cent lower, cut coupons to go to the grocery store, or wait in lines starting at 3 am to stampede stores for Black Friday sales, I find it baffling that most people won’t even bother exploring the Texas electricity market to make sure they’re getting the best deals.

Texas Electricity Provider Spotlight: TXU Energy

I’ve been intending to do a Provider Spotlight section for Texas electricity for awhile, but this weekend I saw something that inspired me to start writing. My intention for these provider spotlight segments is to break down individual electricity providers in more detail so people can learn about the individual companies offering them electricity service in Texas. This could include anything from the kind of plans they offer, as well as how their rates stack up, or the details of their rewards and promotions.

It was that last part that prompted me to write this provider update for TXU Energy, but we’ll get to that in a minute. TXU Energy is one of the major incumbent electricity companies operating in Texas, along with Reliant Energy. They formerly were the exclusive electricity provider for the Onocor footprint of Texas. With over 2 million residential and commercial electricity customers, they are easily the largest electricity provider in the state of Texas. So generally speaking, they’re one of the most recognizable and trusted electric providers in the state.

Next lets take a look at their rates, which is quite possibly the most important aspect an shopper looks for when determining their electricity plan. And compared to the rest of the electricity market, TXU’s prices are high. In fact, they’re some of the highest in the market regardless of fixed, month to month, or green electricity plans. They’re consistently about 2-2.5 cents per kWh (kilowatt per hour). That’s extremely high. To put it in Gas Terms, that’s like paying an extra 50 cents at the pump right now.

The next thing I’d like to examine is TXU’s recent promotion for Centerpoint customers, which was the inspiration for my typing this Provider Spotlight. This weekend, I saw this promotion that TXU has been advertising, and I spent some time exploring a little further because on the surface it seemed impossible. TXU is currently advertising $500 in savings that comes with their exclusive Energy Savings Package. At first I thought this meant a gift card or bill credits, but reading closer, this is not entirely the case. And because I was confused, I wanted to take the time to flesh out this promotion for other folks who might have had the same knee jerk reaction as myself. So it’s not strictly speaking $500 dollars in rebates. However, it is $200 in rebates, which is certainly as much as I can remember seeing in any single promotion. The rest comes in the form of a $25 credit to their new Brighten Online Energy store, which brings the total to $225. The promotion also offers a free programmable Brighten iThermostat and a professional installation (valued at $400). Customers also get a 10% discount on their electricity rates for summer months. All of this if shoppers sign up for TXU Energy Summer Savings 24 month plan.

On the surface, that is a lot of high ticket items to sign up for a 24 month plan, and it looks like quite a deal. However, dig a little deeper and there are certainly some catches to their offer that I think consumers should be aware of before committing to TXU. The $200 gift card is a great deal, there’s no question. That is a fantastic reward. The other large bulk of item for savings is the iThermostat with an installation, which they’ve valued at $400, which is is web programmable. If you’re a homeowner (to which this deal applies) and this kind of thermostat and installation appeals to you, then I’d say it’s a great deal, particularly for the web savvy. Go for it. However, this kind of thermostat and installation promotion might not appeal to everyone. The last item of the promotion, the 10% savings on electricity in summer months should definitely be viewed with skepticism. This plan starts off at 12.9 cents per kWh. The cheapest plan on the market for 24 months is 8.9 cents per kWh. That makes it 45% higher than the cheapest plan on the market for the same time period. Most competitive plans are in the 9 cent range, which at nearly 13 cents per kWh, TXU’s plan is still 3.5 cents per kWh higher than the market average, or 33%. So even if TXU offers you a 10% savings during the summer months, that’s still more than 20% higher than the market rates for the same length plan elsewhere. So in reality, it’s not savings at all. Customers are still drastically overpaying for this plan, even after the discount, so beware.

All in all, TXU is a known provider in the Texas electricity marketplace. They have a long reputation working for them, and they have the trust and recognition of Texans. However, their electricity plans aren’t in any way competitively priced. However, they do compensate on that to some degree with generous promotions and rewards for customers who select TXU electricity plans.

Hopefully this write-up will help shoppers understand a little bit more about TXU as a company, as well as what benefits and drawbacks they represent to Texans shopping for electricity.

Texas Electricity Ratings News: Stuffing The Ballot Box

A key part of what what makes Texas Electricity Ratings unique is that we’re the only site in Texas that allows customers to have a hand in the deregulated electricity market. By allowing customers to submit reviews about their own experiences and rank the level of service from the electricity providers they’ve used, people currently shopping for electricity can benefit from the past experience of Texas consumers. It’s a great system that allows discerning shoppers to cycle through the positive reviews, as well as the negative reviews, to get a potential idea of what to expect and look for from their next electricity providers. “Everybody Rates – You Choose” is our motto for a reason.

Of course, perhaps I should be clearer when I say “Everybody Rates.” When I say that, I certainly mean individual residents, and not the actual companies who are trying to sell Texas electricity. Stuffing the ballot box with false reviews to make individual companies look better is not a new practice people have been trying to get over on Texas Electricity Ratings. In fact, I’m 100% certain it’s not a new practice anywhere on the Internet, regardless of the product. I get false reviews all the time. But this week, after a fresh onslaught of false reviews, I’ve finally been frustrated enough to do something about it by sharing a few with the world.

Here are some phony reviews that have been submitted by Reliant Energy. How do I know they’re from Reliant? There’s actually almost half a dozen different ways to determine whether or not a review is authentic, and these failed pretty much every test I threw at them. Here’s the first one:

“Great Customers Service – I have been a Reliant customer for 6 years. I love thier customer service and online account features.”

Naturally this review received a 5 out of 5, the highest mark possible. Of course, I was somewhat surprised to see an additional review from Reliant Energy come in seconds later, submitted by the same person:

“Reliant isn’t the same Reliant as it was 3 years ago – I have been very happy with my switch back to Reliant. The customer representatives are professional and actually care about what is in the best interest of the customer. They also had good pricing and a variety of options depending on my needs, which the customer service rep was able to walk me through. I have one of those new smart meters and they have some great tools that help me be able to know what my bill will be before I get a suprise in the mailbox and basically I can change the thermostat a little and keep my bill from being more than I budgeted for the month. I really love it.”

Now that’s a great review, and it naturally got another 5 out of 5. But specifically, it’s detailed, it offers pertinent information about why the customer was happy, and what they felt set the company apart from the competition. The only problem is that it’s 100% fake. And I know it’s 100% fake.

So as a public service announcement to all of the REP’s out there, I’d like to say a few things. Thank you guys for your interest in my website. I’m flattered that I’m on your radar, and I hope you continue to visit and read the reviews submitted by users so you can see what issues people are consistently encountered and use it as ideas for how to improve your business and customers satisfaction. However, please refrain from submitting false electricity reviews that aren’t from real customers. I have a rigorous battery of tests through which I look at all the reviews, and the fake ones get tossed out. Additionally, moving forward, I’m going to point out all of the fake reviews I get and point a finger at the guilty parties. Trust me, it won’t look good when I point out the guilty parties to Texas shoppers. And believe me, Reliant and their new subsidiary Pennywise Power aren’t the only guilty parties here. They’re just the only guilty parties I ran across this week. So please, Texas Electricity Providers, stop falsifying reviews. Allow the customers of Texas to have their voice.

Texas Electricity & Obama’s Clean Energy Agenda

President Obama’s been crossing the country and talking about the importance of Green Energy technology and how it is the future of America. He is touting it as a solution to America’s job problem, it’s energy problem in regards to a dependence of foreign oil, as well as hallmark to us improving as an environmentally friendly country. All of these would and are great things, but there are a lot of outstanding questions in regards to any potential moves and expansion made towards Green Technology, particularly in regards to Texas Electricity. The first question really needs to be: What constitutes Green Energy?

Traditionally, when someone says Green Energy, the first that comes to their mind is solar power, or wind powered energy. Which is fair, those are the greenest of the green technologies. But is that the only things being developed as part of the President’s proposed Aegis of green energy? To Texans, specifically, where does Natural Gas fall into the picture? We’re curious about this for a number of reasons. For starters, natural gas and the market prices of natural gas are what set the market rates for electricity in Texas. Which makes things interesting considering the debate that has been raging recently over the technological advancements in mining for natural gas in deposits of Shale.

Recent technology changes have allowed us to mine for natural gas in areas that were previously not financially viable or efficient. We can now use a chemical, water, and pressure based combination to “frack” rocks and siphon out the natural gas deposits between the rock cracks. Now where this all starts to get interesting is when you take into account whether or not this new ability to mine for natural gas deposits will be part of the Obama administration’s Green Energy initiatives.

What makes natural gas so compelling is that it would immediately achieve one of the goals President Obama has laid out about his green energy initiative: it would drastically reduce America’s dependency on foreign oil. Taking into account shale reserves, there is at least six times more natural gas available for mining than there was just a decade ago thanks to new technology. Additionally, natural gas burns substantially cleaner than oil or coal, which makes it a relatively green technology. Furthermore, current pipelines used to transport oil can be modified relatively easily to move natural gas. Natural gas can be used to power vehicles, and it is currently used to power most of the electricity generating plants in the Texas electricity market. And a final kicker? Long term, natural gas quite probably will end up being cheaper than wind or solar power.

The Fracking process is now without it’s potential drawbacks and controversy. Environmentalists say that not enough is yet known about the side effects of Fracking for natural gas, and there are also accusations that the process can contaminate groundwater sources and reservoirs, potentially contaminating drinking water. Some politicians are outraged that there is a lack of regulation over the process now.

Given that many environmentalists aren’t on board with new natural gas mining in shale deposits dampens the chances that it will be adopted under the umbrella of the President’s initiatives as a Green Energy. Which is interesting, because natural gas is fantastically more environmentally friendly than coal or oil. However, it were adopted, America could be looking at a relatively cheap energy transition, and the natural deposits located in the US, particularly in Texas, would give us energy independence and actually likely turn us into an exporter of natural gas to other countries. Texas electricity would likely benefit from even lower electricity prices, increased jobs, and economic security that our state will remain the energy capital of this country well into the future. The only question is whether or not natural gas will be seen by the right people as “green.” Fingers crossed.

Texas Electricity News: El Paso Electric To Remain Regulated

Even though Texas electricity is widely considered by everyone outside of Texas to be a deregulated market as a whole, not every area of Texas is deregulated. And that’s going to remain changed for the near future. The Texas Legislature recently passed a postponement to the Governor for the transition of El Paso Electric from a regulated utility to a deregulated electricity market. In short, El Paso Electric will remain a market without electric choice for the foreseeable future. Outside of Austin Energy and CPS in San Antonio, and Entergy in Southeast Texas, El Paso Electric is the largest remaining regulated area of Texas. The postponement that was sent to the Governor states that a regulated entity needs the following to become deregulated:

– Commencement of a regional transmission organization by the Federal Energy Regulatory Commission for the power region containing EPE

– Development of a balancing energy market, a market for ancillary services, and a market-based congestion management system for the wholesale market in the power region in which the regional transmission organization operates

– Implementation of a seams agreement with adjacent power regions to reduce barriers to entry and facilitate competition

– Certifying a qualified power region, which includes conducting a formal evaluation of wholesale market power in the region, in accordance with PURA 39.152

– Approval of a business separation plan for EPE

– Approval of unbundled transmission and distribution rates for the utility

– Establishment of price-to-beat rates for the utility

– Establishment of a retail choice pilot, and evaluation of its results

– Initiation by the electric utility of a capacity auction in accordance with PURA 39.153

That being said, it appears that the main reason that El Paso Electric isn’t moving forward into becoming a deregulated electricity market is because they were apparently unable to offer fair competition for residential customers. Which isn’t that uncommon, 80% of Illinois(the Southern Half) is regulated for the very same reason. In short, either they couldn’t offer competitive rates to everyone in the market or they can’t offer consistent and reliable service to everyone in their footprint. Which of those two things it is, or both, isn’t exactly clear. But the point is that this huge bubble of West Texas is going to remain devoid of electricity choice for the foreseeable future.

El Paso Electric is a regional electric utility providing generation, transmission and distribution service to approximately 372,000 retail and wholesale customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico. Its service territory extends from Hatch, New Mexico to Van Horn, Texas and includes two connections to Juarez, Mexico and the Comisión Federal de Electricidad (CFE), Mexico’s national utility.