Alliance for Retail Choice becomes necessary step for members

By Kathleen E. Magruder, The New Power Company

Five retail marketers of electricity and natural gas have recently joined together to form the Alliance for Retail Choice. The companies, Green Mountain Energy, Strategic Energy, Smart Energy, The New Power Company, and AES New Energy share a common vision of competitive retail energy markets and a desire to work together to achieve them.

In early 2001, it became clear to the Alliance members that while there were many voices in the debate concerning energy choice, there was not a clear, consistent voice that spoke to the interests of those who serve retail energy customers. Additionally, the voice of the Alliance members was often obscured by the sheer number of other parties in the forums where retail energy choice issues were debated-many of whom were not strong advocates of competition. Finally, sorting through the many venues in which competitive issues were discussed was burdensome for these start up companies with limited manpower and resources.

The Alliance companies came together initially to explore whether it would be possible for them to share information about opportunities and obstacles for competitive markets, to coordinate their efforts to obtain the best possible results for their customers, and to provide a sounding board for ideas and strategies to achieve the most competitive markets possible. After a number of exploratory meetings, the group decided to form an informal organization that would speak for the group, offer coordination in advocacy efforts, serve as a clearing-house for tactics and strategy, and provide focus in the debate over competitive energy markets.

The Alliance advocates continued development of successful retail energy choice programs and markets. Its views include the following:

Energy choice benefits consumers because it brings better prices, services, and technologies:

  • Pricing options that respond to customer needs;
  • Cleaner and renewable energy choices;
  • More payment options;
  • Improved bill presentation;
  • Advanced metering and data analysis.

Competitive retail energy markets are those with:

  • Many buyers and sellers;
  • Proper price signals for customers;
  • Workably competitive wholesale markets;
  • Utilities that distribute energy but are not energy retailers.

Transitional retail energy markets will need:

  • A viable, competitive provider of last resort (POLR) model;
  • The potential for price competition;
  • Strong affiliate rules and codes of conduct;
  • An opportunity for large numbers of customers to sample the market;
  • Uniform retail and wholesale business rules.

While the vast majority of the issues confronting the Alliance are decided at the state level, it is becoming increasingly clear that wholesale markets and, thus, federal regulators and legislators, will also have an influence over the destiny and viability of competitive retail energy markets. To that end, Alliance members will work together to ensure their message is heard by federal agencies as well as state ones. They will also appear before state legislatures and the Congress to advocate for their customers’ benefit.

Kathleen E. Magruder, Vice President of government affairs, can be reached at Kathleen.Magruder@NewPower.com.

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