More Energy Suppliers, More Choices | Gexa Energy to offer energy service to businesses in state
Connecticut businesses have an increasing number of options for where to buy their energy as more heavyweight suppliers realize that there is money to be made in the Nutmeg State.
Their foray into the state means that Connecticut Light & Power and United Illuminating won’t be the only big players in the state’s energy game.
Gexa Energy, a subsidiary of Texas-based FPL Energy, recently announced its intention to offer service to commercial and industrial customers in Connecticut. The company’s announcement comes on the heels of two other large energy companies — Texas-based Direct Energy and New York-based Con Edison Solutions — also recently entering the Connecticut energy marketplace.
To date, there are 15 companies that have entered the Connecticut energy market to supply electricity to businesses, in addition to CL&P and UI.
Donald W. Downes, chairman of the state Department of Public Utility Control Commission, is thrilled with the recent number of large suppliers joining the Connecticut’s energy fray.
“I’ve been fighting this battle and done everything short of offering people beer to get them to enter Connecticut’s market,” he said. “Then, about three or four months ago, we started having real big companies like Direct Energy just call up and say, ‘We’re coming.’ I’m not entirely sure why.”
Better Prices
One explanation more energy suppliers are now interested in doing business in the state is the fact that they can offer customers lower rates than those charged by CL&P and UI. That point was hammered home by Gexa Energy’s Larry Boisvert, vice president of marketing development.
Gexa Energy can offer customers a one-year fixed pricing plan at roughly 10.5 or 11 cents per kilowatt hour, Boisvert said. Those prices are slightly less than the new rates offered by UI and CL&P as of Jan. 1. UI charges 11.9 cents per kilowatt hour while CL&P charges 11.6 cents.
ConEdison Solutions and Direct Energy have been offering fixed pricing plans to customers at roughly 11 cents per kilowatt, prices similar to what Gexa has been presenting.
“We’re finding that some customers like the lower prices, but a lot of the customers are more concerned about the stability,” said Boisvert. “Because we’re backed by FPL Energy, we’re very able to meet power needs.”
Gexa Energy has been successful in other deregulated states, such as Maine and Massachusetts, and early returns indicate similar fortune in Connecticut. By the end of December, the company had inked 20 commercial deals.
“We’re very flexible. We can sign someone to a 12-month contract or a 36-month contract at slightly higher rates,” said Boisvert. “There are more options out there.”
More Competition
Downes believes that more energy suppliers will enter the Connecticut energy marketplace as the state moves towards solving its energy transmission congestion problems.
CL&P is in the process of a $1 billion project to either upgrade or replace existing transmission lines in the southern portion of the state. The first phase of the project, a 21-mile line from Bethel to Norwalk, is complete. The second phase, a 69-mile line from Middletown to Norwalk, is scheduled to be done in 2009.
As the problems associated with the outdated transmission lines are corrected, energy suppliers no longer see the state as a risky place to do business.
“What we have seen happen is that the congestion has been eliminated and the transmission has become extremely predictable,” Downes said, reducing the risk of energy companies coming in, settling on a fixed price and then “losing their shirts.”
“They don’t have to build in as much risk in their prices and the companies like Direct Energy and Gexa feel like this is now a risk worth taking,” said Downes. “As we move along and work on the congestion problem, it’s only going to invite more companies to look at Connecticut.”
WBJ Web Partners
Most Recent
Most Recent
0 Comments