WKIEC Western Kansas Industrial Energy Customers. Retail Customer Choice What is it? Why do it? Next Steps

Transcription

1 WKIEC Western Kansas Industrial Energy Customers Retail Customer Choice What is it? Why do it? Next Steps

2 Presenting Today on behalf of WKIEC Eric Hoegger Director, Retail Power Origination Cargill, Incorporated ETM Internal Energy Services Jeff Pollock Principal/Energy Advisor J. Pollock Incorporated 2

3 Western Kansas Industrial Electricity Consumers WKIEC Members Air Products & Chemicals, Inc. Cargill Incorporated DCP Midstream, LLC (National Helium) Linde, LLC Electricity Suppliers Southern Pioneer Electric Company Victory Electric Cooperative Association, Inc. Western Cooperative Electric Association, Inc. WKIEC Members Purchase Over 20% of the Electricity Sold By Mid-Kansas Electric Co. Electricity is a Significant Operating Cost 3

4 Cargill s involvement in Competitive Retail Power Markets in NA and Profile in Kansas Actively Manages Physical Deregulated Retail Power Load in 10 US States, 1 Canadian Province Active in Utility Rate Interventions in: CA, IA, ND, IL, KS, MO, IN, OH, MI, NC, Active Member of COMPETE Coalition 44 Plant locations in Kansas Soybean Oil Crush & Refining, Beef Production, Salt, Flour Milling, Animal Feed, and Grain Storage 4,609 Employees in Kansas Cargill Meat Solutions Corp (Beef, Pork, Turkey, Feedlot, and Further Processing operations) headquartered in Wichita 4

5 Why Is This Topic A Concern? Higher Power Costs = Less Competitive KS Western Kansas is at an Economic Disadvantage With Higher Power Costs Compared to Nearby Southwestern Public Service (Xcel) in the TX Panhandle Power Costs Can Determine Where a New Plant is Sited or Whether to Continue Operations at an Existing Plant Western Kansas Has Become An Unregulated Generation Monopoly For End Users Customers Are Provided By Statute No Notice of Rate Increases or A Hearing Before The Decision-Makers of MKEC About the Reason(s) for Higher Generation Rates Lower Costs In Nearby Competitive Areas ERCOT (TX) Illinois 5

6 What is Customer Choice? Current Industry Structure Generation Grid Management Transmission Distribution Metering Sales 6 Regulated Competitive

7 What is Customer Choice? Competitive Industry Structure Generation Grid & Market Management Transmission Distribution Metering Sales 7 Regulated Competitive

8 8 Retail Customer Choice

9 Where Can Retail Customers Choose Their Electricity Provider? 9 Source: Distributed Energy Financial Group LLC (DEFG) Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS 2014). Houston, TX: DEFG. Available from

10 How Many Retail Customers Are Choosing An Electricity Provider? Residential Customers Jurisdiction Customers Texas 5,854,000 Illinois 3,077,000 Ohio 2,106,000 Pennsylvania 1,877,000 New York 1,389,000 Connecticut 605,000 Alberta 542,000 New Jersey 536,000 Maryland 524,000 Massachusetts 399,000 Maine 214,000 C&I Customer Switching Jurisdiction Large Customer Switching Medium Customer Switching Texas 100.0% 100.0% Pennsylvania 97.5% 85.5% Maine 95.6% 60.3% Illinois 93.9% 83.7% Maryland 93.8% 71.8% Alberta 93.8% 62.2% Massachusetts 89.0% 61.1% Connecticut 86.7% 78.0% New Jersey 85.7% 56.5% District of Columbia 83.5% 83.5% New York 83.1% 58.7% Delaware 82.5% 82.5% Ohio 79.3% 83.5% California 34.2% 16.6% 10 Source: Distributed Energy Financial Group LLC (DEFG) Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS 2014). Houston, TX: DEFG. Available from

11 11

12 Why Allow Customer Choice? Lower Costs No Captive Ratepayers to Absorb Cost Overruns More Efficient Resources Allow Customers To Compete With Generators To Provide Reserves Reliability Is Unchanged The Lights Will Stay On Wider Range Of Products Encourage Deployment Of Smart Meters Promote Efficiency/Renewable Energy 12

13 Residential Product Diversity Bounce Energy offers a mobile app so that customers can view and pay bills, sign up for auto bill pay, manage payment options, contact customer support and get energy savings tips and insights Direct Energy offers Power-To-Go prepaid electricity to residential Texans with a new payment channel, pay as you wish, and daily text updates; the change is how and when you pay for power Direct Energy offers Free Power Day or Free Power Nights or Half Off Weekend pricing plans to residential customers in Pennsylvania Green Mountain offers a Renewable Rewards Buy-Back Program: qualifying renewable energy generation facilities receive credit for the excess energy Green Mountain offers a 100% wind electricity plan exclusively for electric vehicle drivers (special rate on pollution-free power for car and home) TXU Energy offers a residential SolarCity SolarLease program with full service system design, financing, equipment, installation, insurance, monitoring, warranty and guaranteed solar power TXU Energy offers the MyEnergy Dashboard online tool to help residential consumers examine how and when they use electricity; how to reduce consumption TXU Energy offers Free Nights or Free Weekends with free energy charges as part of a fixed-price 12, 24 or 36 month contract 2014 Distributed Energy Financial Group LLC 13

14 Commercial Consumer Innovation And Product Diversity Constellation offers VirtuWatt, a load control system allowing C&I customers to participate in DR incentives, take advantage of price responsive offerings, and easily modify usage patterns to avoid costs ConEdison Solutions offers energy optimization that allows C&I customers to benefit from shifts in commodity prices by turning their energy management and curtailment programs into a revenue stream Green Mountain Energy offers on-bill financing to its small business consumers who want to install the EnTouch energy management system to measure, monitor and manage building energy use PPL EnergyPlus offers an online billing platform that puts customer hourly load and pricing information at the fingertips of its C&I customers TXU Energy s MyAccount Summary is a free, fast and convenient web-based service that helps business customers understand their electricity consumption patterns and savings opportunities 2014 Distributed Energy Financial Group LLC 14

15 Issues To Be Resolved Unbundling Of Rates Transition Costs Corporate Restructuring May Be Needed To Levelize The Competitive Playing Field Open Access To Customer Information (Preserve Confidentiality) Assistance Programs 15

16 Next Steps Study Other Deregulated States (Lessons Learned) Develop/Implement Pilot Program 16

17 Contact Us Jeffry Pollock Olive Blvd, Suite 585 St. Louis, MO : : : jcp@jpollockinc.com 17

18 Contact Us Eric Hoegger Director of Retail Power Origination Cargill, Incorporated 9350 Excelsior Blvd. MS#150 Hopkins, MN : Eric_Hoegger@cargill.com 18