Monday March 20 2006


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The most interesting person
in our field today?

Will Wal-Mart bring freedom to
American energy markets?

It may well be Chris Hendrix.
       He's general manager of Texas retail energy at Wal-Mart in Bentonville, Ark.
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        He made a presentation at the KEMA meeting in Washington. At the end, Ken Malloy, founder of the Center for the Advancement of Energy Markets, asked Hendrix why Wal-Mart doesn't sell gas and electricity from its 2,900+ stores?
       "I can't talk about that," Hendrix replied.
       The audience gasped.
       Just to make sure we had it right, RT walked with Hendrix as he left the room and asked him to repeat his answer.
       "I can't talk about that," Hendrix replied with a smile.
       Holy mackerel.
       For an instant we thought about all Wal-Marts as energy marketers.
       The firm Hendrix runs only operates in Texas.
       That's now.
       Imagine the potential.
       Wal-Mart is in all markets that are open, said Hendrix.
       Is competition working?
       "From our standpoint it's a resounding yes," he said.
       He singled out New York and Texas as examples where retail competition is working well and to Hendrix that means that some 15 suppliers in each state compete to win Wal-Mart's business.
       His question for the KEMA audience is that since Wal-Mart has to compete with "Target, Costco, all those guys" why shouldn't Wal-Mart's suppliers compete too?
       Hendrix's firm spends $1.8 billion/year on electricity and gas and "it's growing every year."
       It makes sense for Wal-Mart to get the best price it can.
       "We want to be our own portfolio manager," said Hendrix, who said he has bought from almost every marketer in the room.
       He's willing to take some of the marketer's risk too.
       Customer service is a given, he added.
       The Wal-Mart way in Texas has been to become its own supplier to all its stores in the state, a formula it's taking to New York by midyear.
       "We act like a load aggregator for all those facilities," he explained.
       Originally published in Restructuring Today on March 6, 2006

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CONFERENCE LINKS

GCPA's FutureGen*erations - New Pieces to the Puzzle
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Where: The Woodlands Waterway Marriott
www.gulfcoastpower.org/default/s06brochure.pdf

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