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State Regulatory and Distribution Company General Overview



• Many states have gone through extensive electricity and natural gas retail restructuring and deregulation, when legislatures and the public utility commissions of many states have opened retail competition for electricity supply, which is in many ways very similar to the deregulation which occurred many years ago in the long-distance telephone service market. The measures allow consumers of electricity to choose their supplier of electricity, (generation), while the delivery of the power,(transmission and distribution), will still be the responsibility of the incumbent, (regulated), power company. Others states have started restructuring, only to suspend the efforts until further information is gathered and analyzed. Finally, other states delayed consideration of restructuring pending determination of public utility obligation and control requirements, economics of deregulation, and/or other factors such as national legislative efforts. With significant experience in regulatory affairs and state deregulation nationally, ProSource can provide any level of details our clients require impacting their energy procurement and cost management strategies.

• Electricity deregulation occurred in Texas when the Texas Senate passed Senate Bill 7 on January 1, 2002. According to the law, deregulation was to be phased in over several years. As a result, most Texas power customers (those served by a company not owned by a municipality or a utility cooperative can choose their electricity service from a variety of "Retail Electric Providers" (REPs) which includes the incumbent utility (usually a subsidiary thereof). The incumbent utility in the area still owns and maintains the local power lines (and is the company to call in the event of a power outage) and is not subject to deregulation. Customers served by cooperatives or municipal utilities can choose an alternate REP only if the utility has "opted in" to deregulation. Since 2002, approximately 75% of commercial and industrial customers, and approximately 40% of residential customers in deregulated areas of the state have switched from the former incumbent provider to a competitive REP. There are four primary electricity ‘congestion zones’ in Texas, and distribution operations are overseen by ERCOT, the Electricity Reliability Council of Texas. The ERCOT Market Clearing Price for Energy (MCPE) is comprised of a floating price (a price that rises and falls with market conditions and the cost of generation (natural gas), and the requisite balancing of power at a particular Congestion Zone of ERCOT determined every 15 minutes in dollars ($) per megawatt hour.

• Texas - distribution companies include Austin Energy, CPS Energy, , Reliant Energy, CenterPoint Energy (Houston area), Texas Electric Service Company, TXU Energy Oncor Electric (Formerly TXU), (DFW, NE Texas), American Electric Power, Lower Colorado River Authority, and Entergy.

PJM Independent System Operator

States within PJM include - Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennesee, Virginia, West Virginia, District of Columbia. Most states within the PJM area enjoy robust competition and potential for tremendous energy cost savings over the utility rates, as a result of the systems day ahead (locational) and real time (spot) markets.

Delaware: Delaware Power & Light (a subsidiary of Pepco Holdings, Inc.) Delmarva Power Company. Delmarva Power and Light

Illinois- Comed, Ameren

Ohio - Cinergy Corporation, FirstEnergy (Cleveland Electric Illuminating Company, Ohio Edison, Toledo Edison), American Electric Power, Dayton Power & Light, South Central Power Company, Consolidated Electric Cooperative

Pennsylvania- Northeast Utilities,Rural valley electric Co. FirstEnergy (Penn Power, Met-Ed, Penelec), PECO, Allegheny Power, PPL, Duquesne Light, Citizens Electric of Lewisburg, Pike County Light & Power Company, UGI Utilities, Inc. and Wellsboro Electric Company

Maryland - Baltimore Gas & Electric, PEPCO, Southern Maryland Electric Cooperative, Allegheny Power, Conectiv (a subsidiary of Pepco Holdings, Inc.), Choptank Electric Cooperative

Michigan - Consumers Energy, DTE Energy (Detroit Edison), We Energies, American Electric Power, Duke Energy, Cinergy Corporation, Indianapolis Power & Light, Northern Indiana Public Service Company, American Electric Power;

New Jersey - Atlantic City Electric (A subsidiary of Pepco), Public Service Electric and Gas Company (PSE&G), Northeast Utilities, FirstEnergy, Jersey Central Power and Light Company (A subsidiary of GPU Energy, which is a subsidiary of GPU; all of which is now part of FirstEnergy),

Virginia - Dominion Virginia Power, Rapahannock Electric Cooperative, Allegheny Power, Conectiv (a subsidiary of Pepco Holdings, Inc.), Appalachian Power, Virginia Power and Electric Company (VEPCO)

West Virginia - Allegheny Power, Appalachian Power, Wheeling Electric Power (AEP Ohio)

District of Columbia - PEPCO

New York Independent System Operator (NYISO)New York Utilities: CH Energy Group (formerly Central Hudson Gas & Electric), Consolidated Edison Company of New York (Con Edison), Long Island Power Authority (LIPA), Northeast Utilities, National Grid (including Niagara Mohawk), New York State Electric & Gas (NYSEG), Rochester Gas & Electric (RG&E)

The NYISO market allows robust competition and significant savings opportunities for commercial and industrial customers. The market consists of Day-Ahead and Real-Time Markets. The Day-Ahead Market is a forward market in which hourly LMP’s (Locational Marginal Pricing) are calculated for the next operating day based on generation offers, demand bids and scheduled bilateral transactions. This is often noted as DA LMP. The Real-Time Market is a spot market in which current LMP’s are calculated at five-minute intervals based on actual grid operating conditions. Different suppliers in New York maintain different types of portfolios, allowing the opportunity to match customer usage profiles with supplier portfolio balancing preferences to achieve significant client savings.

Northeast Power Pool (NEPOOL)

States within NEPOOL include Maine, Massachusetts, Connecticut, New Hampshire, Rhode Island, Vermont.

Connecticut - Northeast Utilities (including Connecticut Light & Power), United Illuminating, Connectict Natural Gas

Massachusetts - NSTAR (including several former local Boston and Cambridge electricity and gas companies), Northeast Utilities (including Western Massachusetts Electric, Berkshire Company/WMECO), National Grid Maine- Central Maine Power, Bangor Hydro Electric including Nantucket Electric and Massachusetts Electric)

New Hampshire - Northeast Utilities (including Public Service of NH), National Grid (including Granite State Electric)New Hampshire Northeast Utilities (including Public Service of NH), National Grid (including Granite State Electric)

Rhode Island - Northeast Utilities, National Grid (including Narragansett Electric)

Vermont - Central Vermont Public Service, Green Mountain Power

 




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