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Texas
retail competition -- like
hand-to-hand combat?
TXU is weighing
whether to offer time-of-use pricing to its incumbent customers
to stem losses, CEO John Wilder said in a briefing at Southern Methodist
University.
It
would be a drastic sacrifice because in his view time-of-use pricing
could cut some customer bills in half.
TXU is seriously considering
long-term contracts, pre-paid plans and home services such as HVAC
tune-ups, Wilder added.
In his view it's a jungle out
there with marketers in hand-to-hand combat.
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TXU has lost nearly 40% of
its customers since markets opened.
Direct Energy has started offering
HVAC services in North Texas after testing them in Houston last
month (RT,
11/2).
Direct thinks customers can
save 22% on their bills with the Essential Service Plan.
TXU
would need to install advanced meters to offer time-of-use pricing.
TXU's wires unit is spending
$400 million to install smart meters at 3 million homes over the
next five to eight years.
The new meters could cut costs,
streamline operations and boost generator efficiency, Wilder noted.
One possible strategy would
be TXU's cutting its peak capacity needs to avoid use of older,
more expensive generation.
To get there the firm would
give customers incentives to shift use to off-peak hours.
Smoothing out demand throughout
the day and night would let TXU generate power more efficiently
and steadily.
Marketers could use data from
the meters too if they have the technology to process the information.
But just imagine if the 50
or so marketers were all to push time of use, customers could begin
to gain from a wealth of specialized products.
Originally
published in Restructuring
Today on December 12, 2005
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