The Birth of the Global Electric Retailer

Below is a comment I made to the article " Strategic Perspectives on Utility Enterprise Solutions ," by Warren Causey on EnergyPulse.

Deloitte Research made a Scenarios Study and found that the "Continuity" scenario is what is expected by most companies in the next 5 years. However, Deloitte also found out that the next five years might turn out very different from the strategic plans of many companies (read utilities). The result is a very different perspective on the interdependencies of markets and Enterprise Solutions.

On one, or both, of the other two scenarios ("Tough Times" or "Rising Expectations"), instead of Utilities Enterprise Solutions, a Retailers Enterprise Solutions arrives, which will make much more business for IT suppliers than expected under the Continuity Scenario. The main reason is that current business models are at the end of there useful life, while new technology is available to be transformed into competing innovative business models, leading to true deregulation of electric markets.

With the presentation " Ruminations on Demand Response - a view from Chicago ," Bob Lieberman has given a new hope to residential real-time pricing based on the existence of a risk premium, part of which responsive customers can pocket. Bob adds that conventional wisdom regarding that real-time pricing of residential customers won't work was proven wrong. Lieberman identifies 4 problems to be overcome develop the market: 1) Short term thinking; 2) Who's job is it?; 3) Overcoming the "DR is about protection system "mindset; and, 4) Explaining to customers what we are talking about and what's in it for them.

By taking a close look to " An Alternative Business Case for Demand Response," my comments to Why We're Selling Advanced Metering All Wrong... And How to Sell It Right and the discussions on " Energy Bill 2005 - A Waste of Time?" and " 2006: New Challenges and Opportunities in the Brazilian Electric Energy Arena" all 4 problems can be addressed by competitive retail marketers, with innovative business designs under their own Retailers Enterprise Solutions. The result will be a new paradigm of the electricity industry for the new global economy, where increased efficiency will result. Every customer will be able to chosse value added from electricity and the mayority of customers will have lower prices, after a while.

© José Antonio Vanderhorst-Silverio, PhD. 2005.

Interdependent Consultant on Electricity