Restructuring Today
April 27, 2006

Who's to blame if a retail market fails

Now let's see who that would be

Michigan Commissioner Monica Martinez saw shopping numbers go down over the last year (RT, 2/3) but blames it on "growing pains" in the state's pubescent market, she told NEMA's conference yesterday.

          She's not surprised at the dip in a market open only six years, she said.

          State and federal regulatory actions such as the seams elimination (SECA) charge that damaged young retail markets are like zits and should be expected.

          Martinez advised patience as the state works out growing pains -- especially in an election year.

          But who is the parent of this pre-pubescent child, asked Harry Warren, Washington Gas Energy Services president, who was in the audience.

          The Legislature and regulators need to take a more "sanguine view" of this child, he urged.

          When are these problems "just zits," he asked, and when do parents need to intervene to save the child from "something worse than a pimple."

          It's more than "growing pains" when shopping numbers decline, Warren argued.

          And intervention has to transcend whether or not it's an election year, he added.

          Martinez agreed it's time the "parents" took action.

          "We want to open it up, but we want to be careful," she replied.

          She expects the Legislature to "revisit" the state's 2000 restructuring law after November's elections -- either this year or next.

          The governor, Legislature and PSC "realize they have to do something," she added.

          "Our duty as commissioners is to examine what's happening and come up with solutions," she said.

          Marketers, she reminded, have survived proposals that a "particular utility" that were brought to lawmakers in the past two sessions.

          (Detroit Edison proposals to junk competition).

          Both proposals died before both houses could pass them.

          That, she believes, is a sign that sentiment in the Legislature favors choice.

          On the plus side, Martinez is confident the state will extend a do-not-call exemption to energy marketers as it has done for telecom firms.

          Kevin Wright (above) agrees that state regulators are the parent and need to take charge.

          PSCs have to "step up to the plate" to provide a level playing field.

          Marketers need "real, exhibited intent" from PSC's that they're committed to a level playing field, added Robert Ferlman, vice president for energy supply at BlueStar Energy Services.

          PSCs have been cooperative in providing data and insight into state markets, he noted.

          Marketers need commissions to be responsive to their needs and the needs of customer classes.

          Illinois, Ferlman noted, hasn't gotten to that point yet.

          BlueStar, he said, found out only by accident that ICC staff was meeting with Commonwealth Edison to work on a rate stabilization plan to go into effect next year when rate caps expire (RT, 3/15).

          ComEd gave reporters a peek at what it had in mind late last year -- a "cap and deferral" plan (RT, 11/8).

          That was "extremely important" to BlueStar -- so far the only marketer to hold a residential power marketing license in Illinois, Ferlman added.

          Yet the ICC denied BlueStar access to information about the meetings and the firm had to sue the ICC to get it.

          Regulators claimed that the information would damage ComEd's competitive position.

          ComEd's competitive position?

          The ICC released the information only when it became clear ComEd would not support the ICC's view in court, Ferlman added.

© 1997-2006 ghi, Washington, DC, USA. All rights reserved.