Indy Butany DeSouza

 

Consumer Benefits from the Competitive Provision of Energy Services and the Ontario Smart

Meter Implementation

                                                               

Outline

Centrica and Direct Energy. Factors Contributing to the Decision for

Smart Meters in Ontario. Consultation Process for the

Implementation of Smart Meters in Ontario.

Consumer Benefits from the Competitive Provision of Energy Services.

Specific Conditions Required to Achieve Those Benefits.

Summary.

Centrica’s Origins

British GasCorporation

British Gas plc

Centrica plc

Centrica plc

Privatization

Demerger

Competition &diversification

1985

1997

1997-2003

BG plc

Key Facts Today US$22bn annual turnover US$17bn market

capitalization Over 31 million customer

relationships 33,000 employees - of which

5000 in North America Long term credit rating A2/A

+

Direct Energy in North America

Over 5 million customers in North America.

Energy provider in: Ontario; Alberta; Manitoba; Texas; Ohio; Pennsylvania; Michigan; New England; Connecticut; and, Rhode Island.

Approximately 1.9 million households served in Ontario.

Electricity generation and natural gas production asset ownership.

Our Perspective

“We deliver fresh thinking to help you manage your energy costs.”

A competitive energy retailer. Electricity + Natural Gas + Services Very strong focus on customer care

and customer satisfaction. Committed to competitive energy

markets and to promoting customer choice throughout North America.

Factors Contributing to the Decision for Smart Meters in

Ontario

Tightening power supply.

Increased demand for power.

The desire to retire coal-fired generation facilities as early as 2007.

Summary of Consultation Process for the

Implementation Plan April 2004 – The Minister of Energy in

Ontario announced aggressive targets for the deployment of smart meters.

July 2004 – The Minister of Energy issued a directive to the regulator to submit by February 2005 an implementation plan.

Fall 2004 – Stakeholder consultation process.

Summary of Consultation Process for the

Implementation Plan (2) January 2005 – The regulator

submitted its proposed implementation plan to the Minister of Energy.

Next steps – The government is critically evaluating the proposed implementation plan, will review alternatives and issue the final plan.

Private Sector Involvement in Smart Meters

Consumer benefits from the competitive provision of energy services include:

Transfer of risk arising from investment in new technology, products and services from municipalities/taxpayers and ratepayers to investors

Economically efficient allocation of resources and expertise

Private Sector Involvement in Smart Meters (2)

Clear incentives for responsiveness to consumer needs and preferences

Product innovation and differentiation

Enhanced consumer choice

Investment in customer service and satisfaction

Private Sector Involvement in Smart Meters (3)

Competitive entities, acting under ordinary commercial incentives, are better placed than central government/regulated institutions to deliver these benefits while assuming and managing risk.

Preconditions for Achieving These Consumer Benefits

Minimum meter and related system specifications.

Unbundling of metering services and related charges.

Data collection and availability.

Preconditions for Achieving These Consumer Benefits (2)

Equal access to smart meter data.

Retailer involvement in planning and communications.

Preconditions for Achieving These Consumer Benefits (3)

Shared information on deployment schedule for smart meters.

Regulatory oversight to ensure compliance.

Summary

There are significant consumer benefits from the competitive provision of energy services.

Competitive entities, acting under ordinary commercial incentives, are better placed than central government/regulated institutions to deliver these benefits while assuming and managing risk.

Consumer tailored value-added goods and services are the result.