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Ohio Market Update

Ohio Market Update. XENERGY Executive Forum May 18, 2001 Irene Prezelj. Presentation Overview. Ohio Restructuring Highlights Utility-Specific Information MSG From FirstEnergy The First Four Months -- What’s Happened? Marketing Activity Competitive Suppliers/Offers Government Aggregation

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Ohio Market Update

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  1. Ohio Market Update XENERGY Executive Forum May 18, 2001 Irene Prezelj

  2. Presentation Overview • Ohio Restructuring Highlights • Utility-Specific Information • MSG From FirstEnergy • The First Four Months -- What’s Happened? • Marketing Activity • Competitive Suppliers/Offers • Government Aggregation • Switching Activity

  3. Ohio Restructuring Highlights • SB3 mandated 5% reduction in generation rates for residential customers • All OH utilities required to induce at least 20% switching by customer class (mWh) by 2003 • Municipals utilities and electric co-ops are not subject to deregulation laws • Allows for aggregation (opt in OR opt out) • Competition began January 1, 2001

  4. Utility-Specific Information • FirstEnergy • Market Support Generation (1,120 MW) • Incentives by class ranging from 15% to 45% • Another 1,120 MW treated as native load if transported from more than one wheel away • Cincinnati Gas & Electric • Incentives added to shopping credits for FIRST 20% of switchers only • AEP • Shopping incentives for CSP residential customers

  5. Utility Specific Information • Dayton Power & Light • Short market development period, lasting only through 2003 • Monongahela • Variable market development period, depending on rate schedule

  6. MSG From FirstEnergy • Unique incentive for competitive suppliers in FirstEnergy service territories (CEI, TE, OE) • FE made 1,120 MW available on a first-come, first-served basis • TREMENDOUS!!! interest by supplier community • Process ongoing

  7. The First Four Months • “A slowly emerging marketplace that will in all likelihood take three to five years or more to deliver the full benefits of retail competition.” Robert S. Tongren Ohio Consumers’ Counsel April 3, 2001 • Certified Suppliers • 76 electric suppliers • Of these, 36 market to residential customers • 30 government aggregators

  8. Marketing Activity • Mostly concentrated in FE service territories • Contingent upon MSG supply • Heightened activity during Fall time frame • Suppliers in FE areas: Enron, Strategic Energy (SEL), Advantage Energy, Exelon, Allegheny Energy, Shell Energy, NewEnergy, AES Power Direct, Dominion East Ohio Energy, FirstEnergy Services • No suppliers marketing to Dayton Power & Light, Monongahela customers

  9. Marketing Activity • Current offers: • Very limited C&I activity statewide • The New Power Company -- residential offer in AEP, Cinergy areas • FirstEnergy Services -- residential offer in FE service territories

  10. Government Aggregation • Allows local government bodies to shop for suppliers; requires a majority vote in a general election • November 2000 -- 136 ballot issues (only 5 failed) • May 2001 -- 6 ballot issues (1 failed) • 136 communities = 1+ million households • Most in NE OH and Toledo area • Northwest Ohio Aggregation Council (NOAC) in Toledo -- No competitive bids

  11. Government Aggregation • Largest Aggregation in Nation -- February, 2001 • Northeast Ohio Public Energy Council (NOPEC)/Green Mountain deal • 94 Northeast Ohio communities/400,000 customers • 5-year contract for cleaner energy (98 percent from natural gas/2 percent from renewable energy sources) • Savings claim of $10 to $12 million over five years ($1-$2 per month, per customer)

  12. Government Aggregation • Other communities “going it alone” • Shell Energy Services: Medina, Defiance, LaGrange, Sandusky, Stryker, Alliance • Allegheny Energy Supply: Aurora, Stow, Silver Lake, Munroe Falls, Parma • FirstEnergy Services: Cleveland Heights, Barberton • Several others working with consultants

  13. Switching Activity -- April 2001

  14. Wrap-Up • Competition Developing Slowly • Fewer Choices (post-MSG) • Limited Savings

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