Energy Markets in Turmoil The Consumer Perspective Sonny Popowsky Consumer Advocate of Pennsylvania Illinois State University Institute for Regulatory Policy Studies 63682 Springfield, IL May 17, 2001 PA Office of Consumer Advocate 555 Walnut Street Forum Place, 5 th Floor Harrisburg, PA 17101-1923 (717) 783-5048 Telephone (800) 684-6560 (PA Consumers toll-free) paoca@ptd.net www.oca.state.pa.us
Pre-Merger National League Standings 2000 Season EAST W L PCT GB Braves 95 67.586 - Mets 94 68.580 1.0 Marlins 79 82.491 15.5 Expos 67 95.414 28.0 Phillies 65 97.401 30.0 CENTRAL W L PCT GB Cardinals 95 67.586 - Reds 85 77.525 10.0 Brewers 73 89.451 22.0 Astros 72 90.444 23.0 Pirates 69 93.426 26.0 Cubs 65 97.401 30.0 63646.ppt
Post-Merger National League Standings May 10, 2001 EAST W L PCT GB Phillies 20 13.606 - Braves 16 18.471 4.5 Marlins 14 18.438 5.5 Mets 14 19.424 6.0 Expos 13 21.382 7.5 CENTRAL W L PCT GB Cubs 21 12.636 - Astros 17 15.531 3.5 Cardinals 17 15.531 3.5 Brewers 17 16.515 4.0 Reds 16 17.485 5.0 Pirates 12 20.375 8.5
Among states where deregulation has occurred, Pennsylvania has emerged so far as the place where the promises of competition and lower prices are being met most successfully. New York Times, A Dwindling Faith In Deregulation, September 15, 2000 60674.ppt S2
The Most Important Provisions In The Pennsylvania Electric Restructuring Law The Rate Cap Provision The Rate Cap Provision The Rate Cap Provision
Retail Competition Actually got off to a Reasonable Start in Pennsylvania
1.8 million consumers volunteered for the 230,000 slots in the competitive pilot
Pennsylvania - Number of Consumers Shopping April 1999 - April 2001 900,000 800,000 700,000 600,000 New Power Industrial Commercial Residential 500,000 400,000 300,000 200,000 100,000 - April 1 '99 July 1 '99 Oct. 1 '99 Jan. 1 '00 April 1 '00 July 1 '00 Oct. 1 '00 Jan. 1, '01 April 1, '01 Includes 253,253 customers of New Power under Competitive Default Service
45.0% 40.0% 35.0% Peak Load Share for Competitive Suppliers April 2001 Residential Commercial Industrial Percent 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Allegheny Power Duquesne Light GPU Energy PECO Energy* PPL
Apr. 1, '01 9,000.00 8,000.00 7,000.00 6,000.00 5,000.00 4,000.00 3,000.00 2,000.00 1,000.00 - Statewide Competitive Load (mw) July 1 '99 Oct. 1 '99 Jan. 1 '00 April 1 '00 July 1 '00 Oct. 1 '00 Jan. 1, '01 Quarter July 2001? April 1 '99 Load in mw
45 40 35 30 25 20 15 10 5 0 Duquesne - Competitive Load by Class (%) Residential Commercial Industrial Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01 Quarter Percent of Class Load
PECO Energy Rate R Regular Residential Service Average Price to Compare Monthly Generation & in Cents per kwh 5.65 Transmission Bill Summer: June - September 500 kwh 1000 kwh First 500 kwh 5.55 $27.75 $58.80 over 500 kwh 6.21 Winter: October - May All kwh 5.55 $27.75 $55.50 Licensed Competitive Suppliers: Price per kwh 500 kwh 1000 kwh Price per kwh 500 kwh 1000 kwh Agway Energy Services Offer for non-heating oil customers 5.25 $26.25 $52.50 Offer for Agway heating customers 4.95 $24.75 $49.50 Allegheny Energy Supply 4.95 $24.75 $49.50 American Cooperative 5.60 $28.00 $56.00 electricamerica 100% hydro 4.80 $24.00 $48.00 Energy Cooperative Association of Pennsylvania 100% renewable 6.37 $32.27 $64.12 Plus $5 annual fee (waivable for senior citizens, low income & persons with disabilities) Exelon Energy 5.58 $27.90 $55.80 Green Mountain Energy Company 1% renewable Plus $3.95 per month 5.52 $31.55 $59.15 50% renewable Plus $3.95 per month 6.46 $36.25 $68.55 100% renewable Plus $3.95 per month 7.09 $39.40 $74.85 Mack Services Standard 5.49 $27.45 $54.90 100% renewable 6.37 $31.85 $63.70 New Power Company 6 month Value Power Plan 4.16 $20.80 $41.60 12 month Standard Savings Plan 4.99 $24.95 $49.90 OnlineChoice.com Standard Electronic billing only 4.52 $22.60 $45.20 50% renewable Plus $3.95 per month 6.46 $36.25 $68.55 Power Choice 5.45 $27.25 $54.50 Power Direct Standard 5.10 $25.50 $51.00 Clear Choice Environmental Option 5.90 $29.50 $59.00 Utility.com Electronic billing only 4.52 $22.60 $45.20 --Green-e Certified October1, 2000 60592.ppt
PECO Energy Rate R Regular Residential Service Average Price to Compare in cents per kwh 5.67 Summer: June - September Transmission Bill 500 kwh 1000 kwh $27.85 $59.05 First 500 kwh 5.57 over 500 kwh 6.24 Winter: October - May All kwh 5.57 $27.85 $55.70 Competitive Discount Service provided by New Power New Power CDS Average Price to Compare per kwh 5.536 Summer: June - September $27.19 $57.62 First 500 kwh 5.438 over 500 kwh 6.085 Winter: October - May All kwh 5.438 $27.19 $54.38 *Price to compare for PECO's Competitive Discount Service provided by New Power effective with April 2001 billing. This service is available only to preselected PECO/New Power CDS customers. Monthly Generation & Licensed Competitive Suppliers: Price per kwh 500kWh 1000 kwh Agway Energy Services Offer for non-heating customers 7.50 $37.50 $75.00 Offer for Agway heating customers 7.00 $35.00 $70.00 Allegheny Energy Supply 7.35 $36.75 $73.50 electricamerica 50% hydro 5.65 $28.25 $56.50 Energy Cooperative Association of Pennsylvania EcoChoice 100% renewable 6.37 $32.27 $64.12 Standard 5.25 $26.67 $52.92 Plus $5 annual fee (waived for seniors, low-income & persons with disabilities) Price per kwh April 2001 500kWh 1000 kwh Green Mountain Energy Company 1% renewable 5.52 $31.55 $59.15 50% renewable 6.46 $36.25 $68.55 100% renewable 7.09 $39.40 $74.85 Plus $3.95 per month Mack Services 100% renewable 7.53 $37.65 $75.30 New Power Company Two year plan 7.50 $37.50 $75.00
20 18 16 14 12 10 8 6 4 2 0 Suppliers Serving Residential Customers in PECO (October 1999 through April 2001) Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Sep-00 Oct-00 Nov-00 Dec-00 Jan-01 Feb-01 Mar-01 Apr-01 Month Number of Suppliers
18 16 14 12 10 8 6 4 2 0 Number of Suppliers Cheaper than PECO Number of Suppliers Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Sep-00 Oct-00 Nov-00 Dec-00 Jan-01 Feb-01 Mar-01 Apr-01
Actual Usage and Savings for PPL Residential Customer, All-electric Home Switched to Utility.com Months in year 2000 Usage in kwh per month PPL Generation & Transmission Utility.com Generation & Transmission Savings February 2543 $112.57 $94.19 $18.38 March 2392 106.12 88.59 17.53 April 1440 65.47 53.37 12.10 May 1343 61.33 49.74 11.59 June 1163 53.64 43.08 10.56 July 1286 58.89 47.63 11.26 August 1252 57.44 46.41 11.03 Totals $515.46 $423.01 $92.45
Competitive Residential Electric Price Components - Cents per kwh Electricity & Capacity 2.50 +.30= 2.8 3.25 +.30= 3.55 4.25 + 1.75 = 6.00 Losses (10%).255.325.325 Wheeling.150.150.150 Billing, etc..500.500.500 EDI & IT.200.200.200 Security Pmt..005.006.007 Admin..350.350.350 Profit.200.200.200 Billed Amt. 4.60 5.281 7.732
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Percent Are You Aware of Customer Choice Respondent = "Yes" Oct-98 Dec-98 Feb-99 Apr-99 Jun-99 Aug-99 Oct-99 Dec-99 Feb-00 Apr-00 Jun-00 Aug-00 Oct-00 Dec-00 Feb-01 Aug-98 Jun-98
100% 90% Do You Know How to Shop? Respondent = "Yes" 80% 70% 60% Percent 50% 40% 30% 20% 10% 0% Jun-98 Aug-98 Dec-98 Mar-99 Sep-99 Mar-00 Mar-01
100% Shopping: Awareness v. Understanding Responses = "Yes" Percent 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Are you Aware of Competition Do You Know How to Shop Jun-98 Aug-98 Dec-98 Mar-99 Sep-99 Mar-00 Mar-01
PJM Spot Market Monthly Average Energy Price Results $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 $/MWh Jan-99 Feb-99 Mar-99 Apr-99 May-99 Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00 Jun-00 Jul-00 Aug-00 Sep-00 Oct-00 Nov-00 Dec-00 Jan-01 Feb-01 Mar-01
On-Peak Spot vs. Forward Prices Comparison of Last Settlement Price before Contract Month to Actual Avg. Spot Price $180 $160 $140 $120 $/MWh $100 $80 $60 $40 $20 $0 JAN99 MAR99 MAY99 JUL99 SEP99 NOV99 JAN00 MAR00 MAY00 JUL00 SEP00 NOV00 JAN01 MAR01 Contract Forward Price Monthly Avg On-Peak Spot Price
PJM Forward Market - 1999, 2000 & 2001 140.00 120.00 100.00 80.00 60.00 1999 2000 2001 40.00 20.00 - Jan Feb Mar April May June July Aug Sept Oct Nov Dec
300 250 200 150 100 50 0 PJM Daily Capacity Credit Market January 1999 - March 2001 $/mw-day Jan-99 Mar-99 May-99 Jul-99 Sep-99 Nov-99 Jan-00 Mar-00 May-00 Jul-00 Sep-00 Nov-00 Jan-01 Mar-01
PA Gas Switching Statistics as of 04/01/01 Company Columbia Dominion-Peoples Equitable NFG PECO PG Energy PPL T W Phillips UGI Valley Cities-NUI Total Total Residential Customers 355,256 325,146 241,699 200,211 399,316 139,022 65,281 54,723 249,762 4,412 2,034,828 Residential using Alternative Suppliers 94,466 110,399 18,900 0 0 0 0 0 0 0 225,765
$10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 Henry Hub Natural Gas Spot Prices $/mmbtu Apr-98 Jul-98 Oct-98 Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01