W-G:
WHY DID TRACTEBEL LAUNCH TESI WHILE OTHERS WERE EXITING THE MARKET IN
SEPTEMBER 2002?
ZS: Our confidence that we
could succeed in a highly competitive arena is based on our belief in
the deregulation model combined with superior customer service. Competition
is the basis for our free enterprise system. Competition and therefore,
deregulation drives down costs, inspires innovation, and ultimately spurs
economic growth. With deregulation, customers choose their provider and
the products and services to best allow them to control their budgets
and manage their risks.
W-G: WHAT’S
THE SIZE OF THE MARKET YOU ENVISION?
ZS: Retail energy
represents the largest deregulated market. In the United States, commercial
and industrial customers spend more than $190 billion annually on electricity
and natural gas.
W-G: WHERE
DOES TESI PROVIDE ITS PRODUCTS AND SERVICES?
ZS: Tractebel Energy
Services provides retail energy and services to commercial and industrial
companies in New York, Massachusetts, New Jersey, and Texas.
W-G: WERE
THESE LOCATIONS SELECTED TO TAKE ADVANTAGE OF OPERATING ASSETS?
ZS: In North America, Tractebel
currently owns and/or operates a total of 59 facilities that produce more
than 3,127 MW of electricity generation, and operates the only liquefied
natural gas (LNG) import facility in Massachusetts. TESI started selling
electricity to businesses at a guaranteed, fixed price per megawatt for
a stipulated period of time. We got a big boost from group synergies-selling
where Tractebel had operating assets.
All that said, customers are
our greatest assets. For others, customers are the final piece in the
puzzle that enables them to reap the benefits of a complete energy value
chain. The turmoil in energy trading and the exit of many counterparties
from the trading arena drive greater importance and value toward the customer;
customers become a natural hedge for generation assets.
The challenge is to design
products that incorporate market specific variables while addressing universal
customer needs. These products must be scalable to meet the individual
needs of each customer. The ability to build this scale is immensely complicated
by the regional and complex regulatory structure of the business. Taking
that into consideration, we believe Standard Market Design would help
both energy providers and customers.
W-G: DO CUSTOMERS
ASK ABOUT YOUR CREDIT RATINGS?
ZS: Who can blame
customers for asking? The industry is still getting its finances in order.
But the industry is turning the corner on profitability, and the industry
as a whole is rebounding. I am confident that there is considerable room
for a stable of strong, highly competitive energy providers. The success
of deregulation demands it.
W-G: HOW DO
YOU SEE THE FUTURE A N D WHAT PRODUCTS ARE IN DEVELOPMENT?
ZS: From where we sit, the
future for the competitive retail energy industry looks promising. Tractebel
Energy Services plans to expand its retail product offering in the future
to include natural gas and information based services and will continue
to enter newly deregulated states where opportunities exist to meet customer
needs.
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