BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Electric Power

CERAWeek: Three power CEOs agree retail customer demands take center stage

Electric Power | Natural Gas | Oil

Mexico Energy Reform

Electric Power

Platts Market Data – Electric Power

Commodities | Energy | Electric Power | Emissions | Renewables | Natural Gas | Natural Gas (North American)

Northeast Power and Gas Conference

Electric Power | Renewables

Mexico cancels power auctions, to implement decentralized system instead: official

CERAWeek: Three power CEOs agree retail customer demands take center stage

Highlights

One generating company 'differentiates' retail products

One utility has concerns about fleet electrification

Houston β€” Three North American power company chief executive officers at CERAWeek by IHS Markit on Thursday generally agreed that as the electrification of modern society continues apace, their companies have had to become more "customer-facing."

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

One of the three CEOs emphasized that his company has become increasingly focused on supplying "differentiated power products" to its retail customers.

Mauricio Gutierrez, CEO of NRG Energy, said conventional generation will continue to balance what is becoming a smarter and increasingly lower carbon power grid that is also receiving "multi-directional flows" of power from distributed power sources.

"The economy is highly digitized, where everything is loaded into the cloud," Gutierrez said. "We are beginning to see power as a consumer product. You have to think about power in a more differentiated way. Give consumers choices. If you tell a millennial that they can only buy vanilla [and no other flavors], good luck."

Gutierrez said that three years ago, NRG made the strategic decision to move from being a generation-centric company, "and flipped 180 degrees, where the company is now customer-centric."

It was not a question, he said, of "repositioning" as an IPP, or independent power producer. "That doesn't exist anymore ... We are beginning to see power as a consumer product," Gutierrez said.

Over the past three years to the end of 2018, NRG has reduced its generation capacity from roughly 45,000 MW to 21,570 MW.

NRG already owns the major Texas retail company Reliant Energy. It has acquired retail companies in other parts of the country and has increased its retail customer base from 2.8 million in 2017 to 3.3 million in 2018 and its power delivery from 62.8 TWh in 2017 to 67 TWh in 2018.

VISTRA'S NEW SOLAR FACILITY SUPPLIES SISTER RETAILER

Vistra Energy CEO Curtis Morgan reminded the CERAWeek audience in Houston that his Dallas-based company owns retailer TXU Energy and Luminant Generation, which is the state's largest generator.

He said the "constant will be owning the customer and being able to provide an array of products to customers. We are trying to expand our retail business in a significant way."

Vistra has retired roughly 4,000 MW of coal-fired capacity in Texas, and Morgan said he believes coal retirements will continue as plants age. "I believe the economics don't work for coal," he said.

Luminant Generation has brought online in West Texas its first utility-scale solar project, the 180 MW Upton 2 facility which also has a 10 MW/42 MWh battery storage system attached. Luminant sells the power from the solar facility to its sister retail company, TXU Energy.

Megawatt Daily

Platts Megawatt Daily delivers timely and relevant North American electric power information and is a valuable asset providing clarity in this dynamic market. Click the link below for more information on how this market report can meet your business needs.

Free Trial

"You don't post collateral when you sell your power to your retail division," Morgan said. "It creates stability for you as opposed to a fairly volatile wholesale market."

Regarding rooftop solar, Morgan said that subsidies "have really driven rooftop, while in California rooftop has followed the renewable portfolio standards. Do I think the subsidization of rooftop will continue? Absolutely. But not in Texas, where it doesn't make sense."

FPL SEES DOWNSIDE OF ELECTRIFICATION

Eric Silagy, the CEO of NextEra Energy utility subsidiary Florida Power and Light, spoke on the electrification of the transportation fleet in particular.

He said he worries about connecting so many things in everyday life to the grid, which places a lot of pressure on the grid and its stability, with power outages an even greater threat.

"Where I live there are a lot of storms. With increased electrification we can't have lots of outages," Silagy said.

This is where resiliency of the grid and the hardening of the system comes into play. "We are looking at putting all our lines underground," he said. "But as we become more and more electrified, there is a greater reliance on the power sector and power markets."

Silagy noted that FPL has been building a considerable amount of utility-scale solar, but has concluded that its customers are not very interested in rooftop solar.

"Rooftop is more expensive in Florida," he said, adding that the utility believes its customers will not pay a premium for clean energy. "They want affordable and reliable," he said.

Regarding the troubles at PG&E Corp. and its bankruptcy along with it utility subsidiary Pacific Gas and Electric, Silagy said, "PG&E is in an untenable position. Under inverse condemnation, the utilities in California have become de facto insurance companies. That is unsustainable."

He said the average PG&E customer pays 350% more than the average FPL customer, and that such retail prices are bound to cause customer dissatisfaction.

-- Jeffrey Ryser, jeffrey.ryser@spglobal.com

-- Edited by Jennifer Pedrick, newsdesk@spglobal.com