|
TXU
power price will track fuel prices
Firm wants to keep customers
as price to beat is to end
TXU Energy rolled out the first of what promises to be a wealth
of new product offerings.
This
one lets North Texas customers' prices track the price of natural
gas.
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Customers
must sign up for two years to join the plan and face a $200 exit
fee.
The
plan includes a $3 monthly surcharge.
The
Energy Market Tracker Plus plan would tie a customer's monthly kwh
price with NYMEX futures prices for natural gas.
Customers
want flexibility, explained TXU Energy CEO Jim Burke.
It's
part of TXU's plan to keep more customers as full competition starts
at the end of the year.
TXU lost 9% of its customers last year after two price hikes.
Burke
and TXU Corp CEO John Wilder have been touting product choice as
a key to making TXU stand out in the market (RT,
12/12).
The
incumbent started offering two fixed-price plans last year (RT,
12/6, 10/17).
Market
Tracker Plus gives customers the chance to save immediately when
gas prices fall -- if they're willing to take the risk of immediate
hikes when prices rise.
But
customers are protected by the plan's price caps and floors.
Prices
can't rise more than 7.5% above the price to beat and can't fall
more than 15% below the price to beat.
Under
the plan prices may not swing more than 1¢/kwh from month to
month.
TXU is planning to roll out a Summer Savings Program in time for
the cooling season.
The
details aren't set yet but the plan would build off TXU's average
billing option -- refining it by adding an average yearly price
for power when doing estimates.
It
won't be a traditional flat bill where customers pay the same price
each month without any trueups -- regardless of use.
Wilder
has touted time-of-use pricing, long-term contracts, pre-paid plans
and home services such as HVAC tuneups.
Some
form of time-of-use pricing may be on the way as TXU is planning
a pilot program to install power-monitoring devices inside homes
to let customers track power use.
TXU
is installing BPL too, giving it a powerful tool to deliver new
products to customers.
Originally
published in Restructuring
Today on February 24, 2006
Direct
Energy's 2005 was really spectacular
Cites role of hedging, price
spikes
Revenues of $6.4 billion last year at UK giant Centrica's North
American enterprise were up 57% from $4.1 billion in 2004.
Profits
grew 40% to $335 million from a year earlier.
The
firm had its first full year of business as the regulated-rate provider
for ATCO's customers, driving its Canadian residential and small
business revenues to $2.8 billion -- up a stunning 89% from $1.5
billion in 2004.
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Prices
and customer numbers grew, driving profits to $85 million, up 63%
from $52 million the year before.
The
ATCO deal is similar to Direct Energy's ownership of American Electric
Power's price-to-beat customers in Texas.
Direct's
Texas business at $1.7 billion was up 26% from 2004 driven by 8%
customer growth and higher prices from two price-to-beat hikes.
Texas
profits grew 19% to $129 million compared with 2004.
The
firm credits "successful" energy buying and hedging for
offsetting some of the pain of higher wholesale prices and high
marketing costs.
Customer
numbers grew as the firm kept down the "churn."
By
the end of the year it had 898,000 Texas customers -- 300,000 of
them competitive clients outside AEP territories -- up 9% from 2004.
Elsewhere
in the US, residential and small business revenue grew 9% to $380
million in 2004 as Direct Energy added customers despite pulling
out its Georgia gas business part way through 2004.
Profits
rose 500% to $30 million based on higher margins and smart energy
buying.
Home
services revenues grew to $654 million -- nearly double the $339
million in 2004 -- and those profits soared 43% to $93 million.
Direct
Energy bought Residential Services Group in October 2004 and thus
in 2005 had its first full year serving those customers.
Its
Ontario core protection plan business grew as it launched services
businesses in Alberta and Manitoba.
Customer
numbers grew 5% last year to almost 1.9 million for homes services,
the firm reported.
Revenues
grew most in Direct Energy's C&I business to $869 million, up
132% from $375 million in 2004.
C&I
gas volumes grew in Ontario, Alberta and British Columbia -- doubling
to 405 million therms -- with power volumes up 81% to 4.9 twh in
Ontario, Alberta and Texas.
The
biggest news was its entry into the Connecticut, Massachusetts,
Rhode Island and Illinois C&I gas markets along with the Maryland
and New Jersey C&I power markets.
The
company rolled out its services and technology business in Texas
as well.
But
the high costs of rapid growth in its C&I business created the
marketer's only loss -- $15 million versus a profit of $3 million
the year before.
The
firm's move to build resource assets – gas production and
generation -- to support its retail businesses drove trading revenue
down by 84% to $28 million but raised profits to $13 million versus
$6 million in 2004.
The
company plans to expand its coal-bed methane production in Alberta
this year.
"Customer
relationships" grew modestly overall to 5.2 million, up 180,000
or 3.7% from 2004.
Growth
was greatest in US energy markets outside Texas (10%), followed
by Texas energy (8%), and home services (5%).
Its
Canadian customer number was flat compared with 2004.
Ontario's
retail power market reopened last year allowing Direct Energy to
begin selling power again, first to C&Is. Gas sales were flat.
Alberta's
regulatory and pricing climate was "increasingly difficult,"
Direct Energy reported. But the firm sold 59,000 new competitive
contracts -- most for gas and power.
The
firm's North American margin fell to 5.2% from 5.9% the year before.
North
America was a bright spot for parent Centrica whose revenue grew
18% to $23.5 billion for the year with profits rising 11% to $2.6
billion.
Direct
Energy's results, said the marketer's CEO Deryk King, "underline
the importance of the North American business to the Centrica Group."
Originally
published in Restructuring
Today on February 24, 2006
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Between
capacity markets and blackouts?
When:
03/10/06 , 12:00 pm - 1:30 pm EST
Where: Your home, office or cell phone
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