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Speaking of Green Mountain (at great length)

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  • chasmauch@aol.com
    Many of us have questions about buying our electric needs from Green Mountain, and this is an attempt to address some of those concerns. Mr. Brian Killkelley,
    Message 1 of 5 , May 19, 2003
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      Many of us have questions about buying our electric needs from Green Mountain, and this is an attempt to address some of those concerns. Mr. Brian Killkelley, Director of Renewable Development for GM, has offered to dialog with us about this, so we agreed to assemble some of the primary questions we have, and this is the first draft of that submittal. It is not yet ready to submit to GM. I hope many of you will review it and add other questions and concerns. Once we have done the best we can with that, we will submit the final draft to Mr. Killkelley and invite his comments.

      I am on two listservs that are concerned with GM - the Houston Renewable Energy Group and the Harris County Green Party Peace and Justice Committee. I do not want to create any overlap between the two lists and will try to keep them separate. I do not think this will be a problem and in fact should be an asset if we can consolidate the questions and ideas of both groups into one email, which I will try to do. Just thought I would mention this.

      Lots of information about Green Mountain is available on the web and elsewhere, but I suspect it would take much more time and effort to dig it out than most of us are willing to spend. Basically we have two choices: each of us can do our own research (which I am sure most do not care to do) or we can take the recommendations of others who we have some degree of confidence in who have done the research. Some won't even want to spend much time reading the details of work that others have done and may wish to quit right here and just be provided a summary of the consensus conclusions that we reach - assuming we can reach consensus. None of us want to wade through any more verbiage than necessary, so we need to keep this as short as possible.

      First off, let's cut directly to the bottom line. We know energy from GM will cost more than Reliant (energy from 100% wind costs more than from coal, which is dirty but cheap). But how much more? What premium are we willing to pay to help the environment? Unfortunately the information we need to make this decision does not appear to be readily available in a convenient form, or if it is, I couldn't find it. There is no simple table or formula that will give us our answer. I went to the www.powertochoose.com website but it is not at all clear or self-explanatory. I wasted about 30 minutes but never did find what I needed. Then went to the Texas PUC website that had a link to find costs, which took me --- back to the powertochoose website. I tried several searches under "Texas electric prices" and so on with no luck. Finally found one website (forget which) that had a Q&A section, one of which said this:

      Q: Which provider is cheapest?
      A: This is something you must investigate for yourself. Only you can decide what is the best plan for you. Ask each Retail Electric Provider for their "Electricity Facts Label," which will provide you with information on prices and terms and conditions.

      Great, eh? You have to round up the information from each provider yourself. So I decided to just try to work it out myself between GM and my present provider (Reliant). Found a table on the GM website at http://www.greenmountain.com/services/TX/index.jsp that said that for 100% wind power in the Reliant Energy area, the cost is $.106 per KWH so for 1000KWH plus $4.95 customer charge (?) the cost comes to $106 + $4.95 = $110.95 per month.

      Then I got out my latest Reliant bill (April) which should be a good spring month - not winter or summer - and it was $107.60 for 1,135 KWH with breakdown as follows, with my attempted conversion to 1,000 KWH shown in the right-hand column (hope this does not lose all its formatting when I email it):

      Monthly customer charge =                    $5.59                $5.59
      First 250 KWH @ $.019694 =                   4.92                  4.92
      Next 550 KWH @ $.067424 =                 37.08                37.08 
      All addnl =  335 KWH @ $.039179 =       13.12                  7.84 (for 200 KWH)
      Fuel factor = 1,135 KWH @ $.040372 =   45.82                40.37
      City sales tax 1% =                                  1.07                  0.96
      Total =                                                $107.60              $96.76

      So my Reliant bill adjusted to 1,000 KWH = $96.76
      Estimated GM bill =  $110.95
      Increase = $14.19 or 14.7%

      This is a pretty healthy increase - frankly more than I thought it would be, if I have done it right. So if you think an increase in the range of 15% is too much, you may want to stop right here. But still, for those who are willing to bite this bullet, and for the others who are still curious about the whole question, let's go ahead.

      Many questions about GM arise from the www.boycottgreenmountain.org website, so start by reviewing some of the charges set out there. However, observe the comment at the bottom of the home page that says "last modified June 1, 2000" (about 3 years ago). Much has happened since then. For example, note several comments about "cheap natural gas" and "since natural gas prices are so low" that are clearly out of date. Much else is out of date too such as ownerships, etc. Still, it's helpful to browse the website to get a feel for the questions.

      Next, for some very interesting general background on GM (including some explanation of many of the complaints on the "boycott GM" website) I recommend you also review a long but pretty comprehensive article entitled "Red Light, Green Light" that appeared in the Houston Press on June 7, 2001. It can be found in their archives at http://www.houstonpress.com/issues/2001-06-07/feature.html/page1.html and is well worth reading.

      But I suggest that we not attempt to review each question raised on the "boycott GM" website. Many of the questions about the motivations of the GM investors, which include BP AMOCO and especially the Wyly brothers, the Republican oil billionaire Bush backers who have been involved in some shady deals, the criticism of Senator McCain, nuclear power from Vermont Yankee, hydro energy, biomass, and so on are covered in varying amounts of detail in the Houston Press story, which appears to be fairly objective.

      Most of the problems listed on the "boycott GM" website and discussed in the Houston Press article arose in other states, and there are probably some valid concerns about those. But we live in Texas, and it seems to me that GM's operations here should be our primary concern. After all, I suspect that if we dug into the ownership and various past sins of Reliant Energy, TXU, or any of the other choices available to us, we would uncover multiple problems too. Some will have concerns about past and present out-of-state operations, but in order to cut this down to reasonable size, I for one am willing to draw a circle around Texas and try to figure out what is going on here, since this is where we live and we can't have much impact on what goes on in other states.

      Clearly we could spend weeks researching the pros and cons of this matter, so I decided to take a preliminary shortcut. Tom "Smitty" Smith is quoted at length in a number of places in the Houston Press article. He is the Director of Public Citizen of Texas, a public interest lobbying concern located in Austin that was originally founded by Ralph Nader. Smitty was "present at the creation" in that he was involved heavily in the deregulation matter as a public interest lobbyist from the beginning, has followed it closely ever since, and is probably one of the most knowledgeable experts on this matter available. So I called him and had a very interesting conversation last week. He is very busy when the legislature is in session, but took about 30 minutes to talk with me.

      First off, he assured me that Nader is no longer formally associated with PC but that his boss, Joan Claybrook, who is head of PC nationally still works closely with Nader on many issues. He told me that PC definitely does like GM, has worked with them often on various matters, and recommend that everyone possible switch over and buy their electricity from them. They are of course familiar with the "boycott GM" website and have checked out most of the charges thoroughly. They have not attempted to rebut or explain all these items, and feel that GM itself has done a poor job along that line.

      Smitty said that most people do not understand the concept of taking energy out of the grid in one place and replacing it with energy somewhere else. Most of the company is now owned by a utility concern from the Netherlands and BP AMOCO, with the Wylys now minority interest owners who no longer control it. Some have qualms about BP but (by major oil company standards) they are probably one of the least bad ones. They are one of the biggest manufacturers of solar cells in the world, were the first to agree that global warming exists, and broke industry ranks by admitting that the Kyoto accords could be achieved without breaking everyone in the energy business.

      So if you want to help the environment (and don't want to give up your car) this is about the best direct thing you can do. It isn't perfect. We would prefer that it be sponsored by some benevolent treehuggers rather than crass businessmen who are heavy backers of some very anti-environmental politicians. But I would rather see someone do the right thing (even if for the wrong or questionable reasons) than vice versa. And the bottom line is that GM is the only game in town if you want electricity from 100% wind (although Austin and San Antonio apparently have set up "city-owned utilities" that offer their citizens an option similar to GM). In general, Smitty was pretty enthusiastic about GM and referred me to several articles on his website at http://www.citizen.org/texas/  which give lots of data about how dirty Reliant's sources are and what improvements could be made by switching. Finally, Smitty said he thinks it is very important to sign up as many people as possible, and if we would so desire, he would be glad to send a staff member to meet with us and answer any questions we might have.

      Now, as a Green Party member, the PC recommendation carries a lot of weight with me and possibly with others, but I just mention it here as an interesting comment and to give some insight into the attitude of the environmental community. We still need to continue with this study. I suggest that we need more information in the following areas:

      1.  Who are the present owners of GM and what percentage does each owner own? Would like some information on the major owners.

      2.  Is the Texas branch of GM a subsidiary of the parent company in Vermont or a legally independent operation? Do they have the same owners? If they are different, how independent is the Texas operation? Do they have overlapping directors on their boards?

      3.  It would be very helpful to understand how the deregulation process was done. The electric companies used to generate their own power, owned the transmission lines, and provided service directly to their customers, but the business has now been divided up so that the power generation plants are owned by the generators, the transmission lines by the transporters, and retail electric providers buy power from the generators and sell it directly to the consumer. So in theory these are separate businesses, but the old original providers such as Reliant still generate power, transport it, and deliver it to consumers. How can the others who are essentially brokers compete with this vertical monopoly? Where can we find an explanation of how this works?

      4.  Where can we find a readable, layman's language summary of the Texas deregulation law? My recollection is that each provider is supposed to get a certain percentage of their power from renewable sources, and this figure increases every year until it maxes out in 10 years from date of enactment at about 10%. This system went into effect in 1999 so we are now in the 5th year (?) What percentage of each provider's energy must come from renewables this year? What is actually coming from those sources?

      5.  Are all providers attaining these goals or are we ahead or behind? Are there penalties for falling behind or is there a grace period for balancing? Once a provider achieves the legal minimum, is there any incentive for exceeding it or do they in fact lose some incentives? Would there be an advantage to the state overall if more consumers switched to GM or other providers who trade renewable energy? Presumably this would send a signal encouraging industry to generate more clean power. If the public doesn't buy it then the polluters will say "see, we make it available but the public doesn't buy it so why should we be required to make it?"

      6.  Where can we find a brief explanation of exactly how the electrical grid works? I think most of the plants are tied together by a statewide network of power lines. All generators put their output into the grid and all consumers take out of it, so the inputs must be kept in balance with the outputs at all times. Due to unforeseen shutdowns and users coming online and going offline, it is impossible for all generators and providers to stay in balance at all times, so there must be an over-and-under accounting system whereby at any given time some generators have an overproduced status and others are underproduced, with a certain time to get back in balance. There is also a trading system using Renewable Energy Credits whereby generators can trade these overages and underages back and forth (thanks for that information, Mike). It is not obvious how all this works.

      7.  How can we be sure the energy we buy from GM does in fact come from 100% wind? I have heard people who live in Houston say that GM is a fraud because the electricity GM customers in Houston get still comes from Reliant and is generated using their dirty fuels, so there is no direct benefit to Houston's pollution problem. This ties in with the previous question and requires an understanding of the grid. It is generally true that Houston may not benefit directly today but there is an overall benefit for the whole state of Texas due to the balancing process of the grid. If you buy 1000 KW of 100% wind energy from GM you may still get your electricity from Reliant but somewhere in Texas 1000 KW of wind energy is bought and put into the grid and an equal amount of other energy is backed out of the grid. Granted that at present most of the wind farms are in north and west Texas and there are not enough lines in the grid to bring that clean power to the rest of the state, but the more demand we create for clean energy, the more incentive there is to build more lines. Is this correct?

      8.  Does GM actually own any wind generating facilities or are they strictly a broker? Who does own most of the wind generation plants? What plans does GM have to build some or more?

      9.  A nonprofit utility that is owned and operated by the city it serves (a city-owned utility) may be set up to operate in the retail marketplace. I understand that Austin and San Antonio and possibly other cities have set up such utilities. Are they competitive with other providers? Should Houston consider such an operation? Do we need to check with San Antonio and Austin on this?

      Well, I am tired of working on this for now so if anyone else is still reading at this point, please provide your comments. This may be more than 99% of Texans really want to know about electricity, but I think we need to pull together some kind of nonpartisan, comprehensive summary of all this, or if one exists, we need to find it. Hard work but someone needs to do it.

      Charlie
    • Roxanne Boyer
      Charlie, I would like to know... How is GM going to keep up with demand for renewable energy in Texas. If all the utilities are required to have more and
      Message 2 of 5 , May 19, 2003
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        Charlie,
        I would like to know...  "How is GM going to keep up with demand for renewable energy in Texas.  If all the utilities are required to have more and more renewables, and more and more people choose to have 100% renewables, from where is all this new renewable generation going to come?  I have heard that west Texas wind generation has nearly reached its maximum transmission line potential and therefore can not add any more capacity.  Is this true?  It seems to me GM will be forced to raise their costs and then forced out of the market."
        Please add this question to your list.
        Thank you,
        Chris
        ----- Original Message -----
        Sent: Monday, May 19, 2003 10:02 AM
        Subject: [hreg] Speaking of Green Mountain (at great length)

        Many of us have questions about buying our electric needs from Green Mountain, and this is an attempt to address some of those concerns. Mr. Brian Killkelley, Director of Renewable Development for GM, has offered to dialog with us about this, so we agreed to assemble some of the primary questions we have, and this is the first draft of that submittal. It is not yet ready to submit to GM. I hope many of you will review it and add other questions and concerns. Once we have done the best we can with that, we will submit the final draft to Mr. Killkelley and invite his comments.

        I am on two listservs that are concerned with GM - the Houston Renewable Energy Group and the Harris County Green Party Peace and Justice Committee. I do not want to create any overlap between the two lists and will try to keep them separate. I do not think this will be a problem and in fact should be an asset if we can consolidate the questions and ideas of both groups into one email, which I will try to do. Just thought I would mention this.

        Lots of information about Green Mountain is available on the web and elsewhere, but I suspect it would take much more time and effort to dig it out than most of us are willing to spend. Basically we have two choices: each of us can do our own research (which I am sure most do not care to do) or we can take the recommendations of others who we have some degree of confidence in who have done the research. Some won't even want to spend much time reading the details of work that others have done and may wish to quit right here and just be provided a summary of the consensus conclusions that we reach - assuming we can reach consensus. None of us want to wade through any more verbiage than necessary, so we need to keep this as short as possible.

        First off, let's cut directly to the bottom line. We know energy from GM will cost more than Reliant (energy from 100% wind costs more than from coal, which is dirty but cheap). But how much more? What premium are we willing to pay to help the environment? Unfortunately the information we need to make this decision does not appear to be readily available in a convenient form, or if it is, I couldn't find it. There is no simple table or formula that will give us our answer. I went to the www.powertochoose.com website but it is not at all clear or self-explanatory. I wasted about 30 minutes but never did find what I needed. Then went to the Texas PUC website that had a link to find costs, which took me --- back to the powertochoose website. I tried several searches under "Texas electric prices" and so on with no luck. Finally found one website (forget which) that had a Q&A section, one of which said this:

        Q: Which provider is cheapest?
        A: This is something you must investigate for yourself. Only you can decide what is the best plan for you. Ask each Retail Electric Provider for their "Electricity Facts Label," which will provide you with information on prices and terms and conditions.

        Great, eh? You have to round up the information from each provider yourself. So I decided to just try to work it out myself between GM and my present provider (Reliant). Found a table on the GM website at http://www.greenmountain.com/services/TX/index.jsp that said that for 100% wind power in the Reliant Energy area, the cost is $.106 per KWH so for 1000KWH plus $4.95 customer charge (?) the cost comes to $106 + $4.95 = $110.95 per month.

        Then I got out my latest Reliant bill (April) which should be a good spring month - not winter or summer - and it was $107.60 for 1,135 KWH with breakdown as follows, with my attempted conversion to 1,000 KWH shown in the right-hand column (hope this does not lose all its formatting when I email it):

        Monthly customer charge =                    $5.59                $5.59
        First 250 KWH @ $.019694 =                   4.92                  4.92
        Next 550 KWH @ $.067424 =                 37.08                37.08 
        All addnl =  335 KWH @ $.039179 =       13.12                  7.84 (for 200 KWH)
        Fuel factor = 1,135 KWH @ $.040372 =   45.82                40.37
        City sales tax 1% =                                  1.07                  0.96
        Total =                                                $107.60              $96.76

        So my Reliant bill adjusted to 1,000 KWH = $96.76
        Estimated GM bill =  $110.95
        Increase = $14.19 or 14.7%

        This is a pretty healthy increase - frankly more than I thought it would be, if I have done it right. So if you think an increase in the range of 15% is too much, you may want to stop right here. But still, for those who are willing to bite this bullet, and for the others who are still curious about the whole question, let's go ahead.

        Many questions about GM arise from the www.boycottgreenmountain.org website, so start by reviewing some of the charges set out there. However, observe the comment at the bottom of the home page that says "last modified June 1, 2000" (about 3 years ago). Much has happened since then. For example, note several comments about "cheap natural gas" and "since natural gas prices are so low" that are clearly out of date. Much else is out of date too such as ownerships, etc. Still, it's helpful to browse the website to get a feel for the questions.

        Next, for some very interesting general background on GM (including some explanation of many of the complaints on the "boycott GM" website) I recommend you also review a long but pretty comprehensive article entitled "Red Light, Green Light" that appeared in the Houston Press on June 7, 2001. It can be found in their archives at http://www.houstonpress.com/issues/2001-06-07/feature.html/page1.html and is well worth reading.

        But I suggest that we not attempt to review each question raised on the "boycott GM" website. Many of the questions about the motivations of the GM investors, which include BP AMOCO and especially the Wyly brothers, the Republican oil billionaire Bush backers who have been involved in some shady deals, the criticism of Senator McCain, nuclear power from Vermont Yankee, hydro energy, biomass, and so on are covered in varying amounts of detail in the Houston Press story, which appears to be fairly objective.

        Most of the problems listed on the "boycott GM" website and discussed in the Houston Press article arose in other states, and there are probably some valid concerns about those. But we live in Texas, and it seems to me that GM's operations here should be our primary concern. After all, I suspect that if we dug into the ownership and various past sins of Reliant Energy, TXU, or any of the other choices available to us, we would uncover multiple problems too. Some will have concerns about past and present out-of-state operations, but in order to cut this down to reasonable size, I for one am willing to draw a circle around Texas and try to figure out what is going on here, since this is where we live and we can't have much impact on what goes on in other states.

        Clearly we could spend weeks researching the pros and cons of this matter, so I decided to take a preliminary shortcut. Tom "Smitty" Smith is quoted at length in a number of places in the Houston Press article. He is the Director of Public Citizen of Texas, a public interest lobbying concern located in Austin that was originally founded by Ralph Nader. Smitty was "present at the creation" in that he was involved heavily in the deregulation matter as a public interest lobbyist from the beginning, has followed it closely ever since, and is probably one of the most knowledgeable experts on this matter available. So I called him and had a very interesting conversation last week. He is very busy when the legislature is in session, but took about 30 minutes to talk with me.

        First off, he assured me that Nader is no longer formally associated with PC but that his boss, Joan Claybrook, who is head of PC nationally still works closely with Nader on many issues. He told me that PC definitely does like GM, has worked with them often on various matters, and recommend that everyone possible switch over and buy their electricity from them. They are of course familiar with the "boycott GM" website and have checked out most of the charges thoroughly. They have not attempted to rebut or explain all these items, and feel that GM itself has done a poor job along that line.

        Smitty said that most people do not understand the concept of taking energy out of the grid in one place and replacing it with energy somewhere else. Most of the company is now owned by a utility concern from the Netherlands and BP AMOCO, with the Wylys now minority interest owners who no longer control it. Some have qualms about BP but (by major oil company standards) they are probably one of the least bad ones. They are one of the biggest manufacturers of solar cells in the world, were the first to agree that global warming exists, and broke industry ranks by admitting that the Kyoto accords could be achieved without breaking everyone in the energy business.

        So if you want to help the environment (and don't want to give up your car) this is about the best direct thing you can do. It isn't perfect. We would prefer that it be sponsored by some benevolent treehuggers rather than crass businessmen who are heavy backers of some very anti-environmental politicians. But I would rather see someone do the right thing (even if for the wrong or questionable reasons) than vice versa. And the bottom line is that GM is the only game in town if you want electricity from 100% wind (although Austin and San Antonio apparently have set up "city-owned utilities" that offer their citizens an option similar to GM). In general, Smitty was pretty enthusiastic about GM and referred me to several articles on his website at http://www.citizen.org/texas/  which give lots of data about how dirty Reliant's sources are and what improvements could be made by switching. Finally, Smitty said he thinks it is very important to sign up as many people as possible, and if we would so desire, he would be glad to send a staff member to meet with us and answer any questions we might have.

        Now, as a Green Party member, the PC recommendation carries a lot of weight with me and possibly with others, but I just mention it here as an interesting comment and to give some insight into the attitude of the environmental community. We still need to continue with this study. I suggest that we need more information in the following areas:

        1.  Who are the present owners of GM and what percentage does each owner own? Would like some information on the major owners.

        2.  Is the Texas branch of GM a subsidiary of the parent company in Vermont or a legally independent operation? Do they have the same owners? If they are different, how independent is the Texas operation? Do they have overlapping directors on their boards?

        3.  It would be very helpful to understand how the deregulation process was done. The electric companies used to generate their own power, owned the transmission lines, and provided service directly to their customers, but the business has now been divided up so that the power generation plants are owned by the generators, the transmission lines by the transporters, and retail electric providers buy power from the generators and sell it directly to the consumer. So in theory these are separate businesses, but the old original providers such as Reliant still generate power, transport it, and deliver it to consumers. How can the others who are essentially brokers compete with this vertical monopoly? Where can we find an explanation of how this works?

        4.  Where can we find a readable, layman's language summary of the Texas deregulation law? My recollection is that each provider is supposed to get a certain percentage of their power from renewable sources, and this figure increases every year until it maxes out in 10 years from date of enactment at about 10%. This system went into effect in 1999 so we are now in the 5th year (?) What percentage of each provider's energy must come from renewables this year? What is actually coming from those sources?

        5.  Are all providers attaining these goals or are we ahead or behind? Are there penalties for falling behind or is there a grace period for balancing? Once a provider achieves the legal minimum, is there any incentive for exceeding it or do they in fact lose some incentives? Would there be an advantage to the state overall if more consumers switched to GM or other providers who trade renewable energy? Presumably this would send a signal encouraging industry to generate more clean power. If the public doesn't buy it then the polluters will say "see, we make it available but the public doesn't buy it so why should we be required to make it?"

        6.  Where can we find a brief explanation of exactly how the electrical grid works? I think most of the plants are tied together by a statewide network of power lines. All generators put their output into the grid and all consumers take out of it, so the inputs must be kept in balance with the outputs at all times. Due to unforeseen shutdowns and users coming online and going offline, it is impossible for all generators and providers to stay in balance at all times, so there must be an over-and-under accounting system whereby at any given time some generators have an overproduced status and others are underproduced, with a certain time to get back in balance. There is also a trading system using Renewable Energy Credits whereby generators can trade these overages and underages back and forth (thanks for that information, Mike). It is not obvious how all this works.

        7.  How can we be sure the energy we buy from GM does in fact come from 100% wind? I have heard people who live in Houston say that GM is a fraud because the electricity GM customers in Houston get still comes from Reliant and is generated using their dirty fuels, so there is no direct benefit to Houston's pollution problem. This ties in with the previous question and requires an understanding of the grid. It is generally true that Houston may not benefit directly today but there is an overall benefit for the whole state of Texas due to the balancing process of the grid. If you buy 1000 KW of 100% wind energy from GM you may still get your electricity from Reliant but somewhere in Texas 1000 KW of wind energy is bought and put into the grid and an equal amount of other energy is backed out of the grid. Granted that at present most of the wind farms are in north and west Texas and there are not enough lines in the grid to bring that clean power to the rest of the state, but the more demand we create for clean energy, the more incentive there is to build more lines. Is this correct?

        8.  Does GM actually own any wind generating facilities or are they strictly a broker? Who does own most of the wind generation plants? What plans does GM have to build some or more?

        9.  A nonprofit utility that is owned and operated by the city it serves (a city-owned utility) may be set up to operate in the retail marketplace. I understand that Austin and San Antonio and possibly other cities have set up such utilities. Are they competitive with other providers? Should Houston consider such an operation? Do we need to check with San Antonio and Austin on this?

        Well, I am tired of working on this for now so if anyone else is still reading at this point, please provide your comments. This may be more than 99% of Texans really want to know about electricity, but I think we need to pull together some kind of nonpartisan, comprehensive summary of all this, or if one exists, we need to find it. Hard work but someone needs to do it.

        Charlie


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      • mark r. johnson
        Hello Charles, I sympathize with your travails trying to figure out just how much more you are paying for Green Mountain (GM) power vs. Reliant s. Although you
        Message 3 of 5 , May 20, 2003
        • 0 Attachment
          Hello Charles,

          I sympathize with your travails trying to figure out just how much
          more you are paying for Green Mountain (GM) power vs. Reliant's.
          Although you have talked about many other things, I will confine my
          comments to the few areas where I have some knowledge. In past years I
          have worked for Reliant in the "Rate and Research" department and so
          have some experience interpreting these numbers. BTW I have been a
          customer of Green Mountain ever since the Enron subsidiary New Power
          announced their bankruptcy.

          --- In hreg@yahoogroups.com, chasmauch@a... wrote:
          > ...Found a table on the GM website at <A
          HREF="http://www.greenmountain.com/services/TX/index.jsp">
          > http://www.greenmountain.com/services/TX/index.jsp</A> that said
          that for 100%
          > wind power in the Reliant Energy area, the cost is $.106 per KWH so
          for
          > 1000KWH plus $4.95 customer charge (?) the cost comes to $106 +
          $4.95 =
          > $110.95 per month.

          So far so good. All the "newcomer" electric competitors make an effort
          to make their rates simple and easy to understand. Generally one price
          per KWH plus a monthly customer charge. This even includes Reliant
          when they are operating outside their traditional service
          territory(!).

          Not so the old Reliant tariffs, which were a product of many years'
          evolution from the legal system, committees, negotiated compromises,
          and social engineering -- note that simplicity was not one of the
          above factors. If you really want to see the nuts and bolts, look via
          this link under "residential service":
          http://www.puc.state.tx.us/electric/rates/PTB.cfm

          > Then I got out my latest Reliant bill (April) which should be a good
          spring
          > month - not winter or summer - and it was $107.60 for 1,135 KWH
          with
          > breakdown as follows, with my attempted conversion to 1,000 KWH
          shown in the
          > right-hand column (hope this does not lose all its formatting when I
          email
          > it):
          >
          > Monthly customer charge = $5.59
          $5.59
          > First 250 KWH @ $.019694 = 4.92
          4.92
          > Next 550 KWH @ $.067424 = 37.08
          37.08
          > All addnl = 335 KWH @ $.039179 = 13.12 7.84
          (for 200
          > KWH)
          > Fuel factor = 1,135 KWH @ $.040372 = 45.82 40.37
          > City sales tax 1% = 1.07

          > 0.96
          > Total =
          $107.60
          > $96.76
          >
          > So my Reliant bill adjusted to 1,000 KWH = $96.76
          > Estimated GM bill = $110.95
          > Increase = $14.19 or 14.7%
          >
          > This is a pretty healthy increase - frankly more than I thought it
          would be,
          > if I have done it right. So if you think an increase in the range of
          15% is
          > too much, you may want to stop right here.

          I think you have the right idea on calculations, but there are a
          couple of minor things and one major thing you might not know. The
          city sales tax is not optional and will be applied to the GM bill as
          well.

          The big thing you did not see is in the "All Additional" block of power
          over 800 KWH, there is one rate for NOV-APR and a different, higher
          rate for MAY-OCT when your usage is highest. While GM and the others
          will charge you the same rate for energy year-round, Reliant will
          charge you more for summer power when it costs them more.

          In theory this is "good" because it sends a price signal to the
          customer telling him when the commodity is plentiful and when it is
          scarcer. The old regulated rate system is full of little kinks that
          have some theoretical basis. But in practice I don't think this really
          works for residential customers.

          Hope this helps -- Mark J.
        • mark r. johnson
          ... Hi again Charlie, Read further on your long post and saw some other topics I can attempt to help with. ... process was ... I worked during the years when
          Message 4 of 5 , May 20, 2003
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            --- In hreg@yahoogroups.com, chasmauch@a... wrote:
            Hi again Charlie,

            Read further on your long post and saw some other topics I can attempt
            to help with.

            > I suggest
            > that we need more information in the following areas:
            >
            > ...
            > 3. It would be very helpful to understand how the deregulation
            process was
            > done...

            I worked during the years when this law was formulated and it was a
            fair place to be a fly on the wall. The process was a lot of
            compromise, finally agreeing to give each interested party enough of
            what they wanted to vote "yes" to the final bill. Residential
            customers were in theory represented by a State of Texas group which I
            consider amazingly ineffectual, more interested in headlines and
            self-promotion than delivering results. I'm not saying you were
            cheated, a judge okays most rate issues, but your representation was
            both loud and weak in my opinion.

            Your question is broad and if you ask specific questions we might
            learn just how much or how little I know. I think I have an accurate
            general overview of the history and facts, but it's hard for me to
            summarize it without putting in a lot of my own value judgements.

            I'll try: the system physically functions just as it did before,
            except ownership of generating plants is split off into separate
            corporate entities. Your local service is physically provided by
            Centerpoint Energy which buys a lot of its power (it still makes some
            too) from other companies, including Reliant Resources. Centerpoint is
            still a legal monopoly and charges for its value-added. Reliant is not
            a monopoly, in theory you buy from Reliant because you want to -- in
            practice most people won't change unless a new supplier can do
            something remarkable for them, and 5-10% savings for a utility is what
            most people consider unremarkable.

            The retail electric choice, I consider a paper transaction. The same
            men come around in the same trucks, and read the meters and maintain
            the wires. With most competitive companies like TXU, they compete on a
            little bit of price and convenience details like choosing your billing
            date. With GM they compete by feeding into the grid an amount of wind
            power equivalent to what you consume.


            > 6. Where can we find a brief explanation of exactly how the
            electrical grid
            > works? I think most of the plants are tied together by a statewide
            network of
            > power lines. All generators put their output into the grid and all
            consumers
            > take out of it, so the inputs must be kept in balance with the
            outputs at all
            > times. Due to unforeseen shutdowns and users coming online and going
            offline,
            > it is impossible for all generators and providers to stay in balance
            at all
            > times, so there must be an over-and-under accounting system whereby
            at any
            > given time some generators have an overproduced status and others are
            > underproduced, with a certain time to get back in balance...

            I think you are generally right. It would take both an engineer and a
            teacher to describe it well.


            > 7. How can we be sure the energy we buy from GM does in fact come
            from 100%
            > wind? I have heard people who live in Houston say that GM is a fraud
            because
            > the electricity GM customers in Houston get still comes from Reliant
            and is
            > generated using their dirty fuels, so there is no direct benefit to
            Houston's
            > pollution problem. This ties in with the previous question...

            I would trust the legal system to ensure GM doesn't operate in a
            fraudulent manner. I think they are telling the truth. But the Texas
            electric market is truly statewide, power can be generated here to
            serve most any place (subject to some transmission limitations). So if
            locally generated power is cheap, it will no doubt be generated and
            sold somewhere in the state.

            9. A nonprofit utility that is owned and operated by the city it
            serves (a
            > city-owned utility) may be set up to operate in the retail
            marketplace. I
            > understand that Austin and San Antonio and possibly other cities
            have set up
            > such utilities. Are they competitive with other providers?

            Generally yes. Municipal utilities work OK and they get tax breaks so
            the retail price to customers tends to be cheaper. There is a tendency
            I believe for them to function more like "city hall" with lousy
            customer service and ignoring customer wants unless you get their
            attention via political channels. But with city politics you can be
            heard if you want.

            Don't forget co-ops as another nonprofit way to deliver power. Texas
            has a lot of them outside the cities, some do the job cheaply and some
            are rather expensive to the customer. To the best of my knowledge this
            is due to actual costs and seldom due to waste.

            Hope this helps -- Mark J.
          • mark r. johnson
            Really I didn t set out to monopolize this group today. Perhaps this message will say enough . I wonder if you had found this table of comparative
            Message 5 of 5 , May 20, 2003
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              Really I didn't set out to monopolize this group today. Perhaps this
              message will say enough <g>.

              I wonder if you had found this table of comparative year-round
              electric costs published by the PUC:
              http://www.puc.state.tx.us/electric/rates/RESrate.cfm

              This second one focuses on the measurement of year-round costs made in
              April. Look on page 2 of this 5-page document to see comparisons
              relevant to Reliant's native service area:
              http://www.puc.state.tx.us/electric/rates/RES_avgrate/Apr03rates.pdf

              While I criticized the methodology in just using April data, it
              appears your 15% estimate of extra GME costs is pretty on-target. I
              trust the PUC to measure these numbers accurately and honestly.

              Working with Reliant in the old days, I learned the average customer
              uses just over 1000 kwh/month on an annual basis. Summer usage is
              likely to be two or three times that amount, winter usage much less.

              Hope this helps -- Mark J.

              P.S. It is my firm opinion that deregulation was driven by industrial
              customers who wanted to get out from under the high costs of past
              investments, including the STNP nuclear plant. Commercial customers
              found something to like in deregulation, but residential customers
              would not have benefitted financially without an explicit effort to
              make sure "all customers gained" from deregulation. So we residential
              users are mainly along for the ride. Of course before we could not
              choose GME if we wanted to, and now we can, for what that's worth.
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