Competitive retail power markets advance rapidly in 2003

BURLINGTON, Mass., January 29, 2004 — According to KEMA analysis published this month, US retail power competition experienced substantial progress in 2003.

Over 52,000 MW of estimated peak electricity demand is now being competitively served, an increase of 12,000 MW over the past 12 months and 35,000 MW since the California energy crisis subsided in 2001. The 52,000 MW represents 7 percent of the approximately 720,000 MW of total US peak summer demand.

“Competition in power markets, primarily for large buyers, continues its rapid advance,” asserts Taff Tschamler, Director of the KEMA’s Retail Energy Markets advisory service. “Although the momentum to open up new markets has stopped since California, those that are already open have resulted in substantial and growing market activity. Reforms expected in several open markets over the coming year or two are likely to further accelerate competition across the US.”

The Texas market leads the country in terms of customer load migration, new entrants and choice of competitive offers. Of the 52,000 MW switched in the competitive markets nationwide in 2003, Texas accounted for approximately 17,000 MW. By comparison, Illinois, California, New York, Pennsylvania and Ohio each accounted for over 3,000 MW.

The growth in customer participation is occurring in conjunction with an increase in the number and the market share of new entrants. Over the past year, more than 20 firms have entered competitive retail power markets while the top five competitive providers now serve between 2,500 to 10,000 MW of customer peak demand, equivalent to a mid to large sized regulated US utility.

“Although some individual firms continue to struggle, the overall financial health of competitive providers has unquestionably improved over the past two years as the scale and scope of these organizations increases and they gain experience and build infrastructure to profitably compete for customers,” said Tschamler.

Tschamler will present findings of the US market analysis at the upcoming Retail Power Markets Summit held by the Center for Business Intelligence in Orlando, Florida February 25th and 26th. For more information on the Retail Power Markets Summit visit http://www.cbinet.com/events/PB432/index.html.

For more information about KEMA’s Retail Energy Markets (REM) advisory service, please contact Taff Tschamler at 720-241-0168 or mailto:ttschamler@kema-xenergy.com.

About KEMA

KEMA’s Retail Energy Markets (REM) program is a research and advisory service to competitive power markets. KEMA has been providing market intelligence and analysis on retail energy markets since 1996. Originally initiated by XENERGY Inc., which was acquired by KEMA in 2000, the REM service is designed specifically to assist clients that need reliable and detailed knowledge of competitive energy markets.

KEMA is an independent company with an international reputation for high-level technical and management consultancy, testing, inspections and certification for businesses in the energy industry, assisting more than 500 clients in more than 70 countries. Headquartered in Arnhem, the Netherlands with subsidiaries and offices worldwide, KEMA employs more than 1,500 full-time professionals and leading experts in many facets of the energy utility industry. Founded in 1927, KEMA serves the complete spectrum of participants in the energy marketplace and offers a full complement of services supporting generation through the consumer side of the meter. KEMA’s North American business operations are headquartered in Burlington, Massachusetts. http://www.kemainc.com


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