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Dominion's Paul Koonce: Opt-out Government Aggregation "Frustrates Choice"

February 4, 2013

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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The existence and growth of opt-out municipal aggregations, "frustrates choice," Paul Koonce, Executive Vice President of Dominion Resources, Inc. and Chief Executive Officer of Dominion Virginia Power, said during an earnings call last week.

Koonce was discussing negative pressures on Dominion Retails margins during the fourth quarter, which included mild weather, low natural gas prices, and strong competition.

"The other thing that's driving this is the expansion of what I would call retail aggregation. That is certainly having an impact on the market," Koonce said

"[W]hen the city of Chicago takes a million customers and they put that into an aggregation business, that's a million customers that really are not participating in retail choice. I view the aggregation business as a wholesale business with a retail load shape ... the math doesn't work from a true retail perspective so what you end up with is the retail marketers really competing for the remaining market share," Koonce said.

"I think until we work through some of those dynamics, I think it's going to be a very competitive marketplace out there," Koonce said.

"I'm pleased that the Ohio Public Utility Commission has started a proceeding to really look at whether aggregation is what I would call true retail choice," Koonce said. Koonce noted that the Ohio proceeding is to, "look at what role does aggregation play and what role does the provider of last resort play in either enhancing choice or frustrating choice."

"We think it frustrates choice," Koonce said.

Koonce cited Pennsylvania and Texas as "very good" choice markets.

Dominion Retail's average electric customer count was 695,000 for the three months ended December 31, 2012, versus 699,000 for the three months ended September 30, 2012, and 737,000 a year ago.

Dominion Retail's average natural gas customer count was 550,000 for the three months ended December 31, 2012, versus 553,000 for the three months ended September 30, 2012, and 549,000 a year ago.

Dominion Retail's average Products and Services customer count was 885,000 for the three months ended December 31, 2012, versus 879,000 for the three months ended September 30, 2012, and 863,000 a year ago.

For the three months ended December 31, 2012, Dominion Retail's average total customer count was 2.131 million, versus an average of 2.132 million for the three months ended September 30, 2012, and 2.150 million a year ago.

Electric volumes for Dominion Retail were 3.346 million MWh for the quarter ending December 31, 2012, versus 2.198 million MWh a year ago.

Dominion Retail gas volumes were 25,887 mmcf for the quarter ending December 31, 2012, versus 23,794 mmcf a year ago.

Dominion Retail reported earnings including noncontrolling interests before interest and taxes of $32 million for the three months ended December 31, 2012, versus $51 million a year ago.

Operating revenue for Dominion Retail for the quarter ended December 31, 2012 was $406 million.


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