February 1, 1998

New Century targets U.S. market in first step toward deregulation

New Century Energies decision last year to join forces with two utility companies has created a stir among energy experts.

Because New Century Energies is really a renamed Public Service Company, joined up with public utility companies from Ohio and Florida. The new conglomerate wants to manage the bills of large national companies to lower their energy costs, the first step toward deregulation, some energy specialists say.

So far, only Service Merchandise, a national discount retailer with stores in Denver, has signed on.

And other experts say deregulation won’t have much effect on household consumers in the foreseeable future.

Why not? Basically because so many legal and technical problems exist with deregulating the industry that even California, which leads the nation in the process, postponed it until March.

Deregulation was to have begun there on Jan. 1. Colorado is estimated to be about a decade behind California.

What consumers, including those on the Front Range, can expect in the near future is a diversification of products and services as energy companies jockey for position.

Lakewood-based KN Energy is a case in point. KN, which provides natural gas to 250,000 customers in Colorado, Nebraska, Kansas and Wyoming, already offers its customers the option of paying telecommunications bills at the same time as gas charges.

“When competition comes in with deregulation, all utilities will offer these types of services,” says Mark Stutz, KN Energy spokesman.

Talk of deregulation also is paving the way for renewable energy, energy experts say. Wind power is likely to be the big winner, because technology already exists to make it competitive with fossil fuels, which are today’s primary energy source.

Windsource, offered by Public Service Co., is the first alternative. (See story on Page ??.) Customers who sign up can buy wind energy in blocks on a monthly basis. One block is equal to 100 kilowatt hours; the average household uses about 500 kilowatt hours a month.

Although wind energy costs about $2.50 more per block, Public Service has been surprised by the number of people willing to pay extra to have so-called green energy, notes Mark Severts, a Public Service spokesman. Five thousand customers already have signed up, including the City of Boulder, U S West Inc., and Adolph Coors Co.

Public Service expects the number of people willing to use wind energy “will grow

substantially,” says Severts.

Use of renewable energy will increase because the general public’s concerns have been shifting, says attorney Robert Lehr, a Denver Water Board member and former Public Utilities Commissioner. A study he was involved with in Texas recently showed that even lower-income families, whose main concern may not be energy efficiency, want renewable energy.

As environmental concerns increase, people want cleaner air and water, and they’re willing to pay for it, he says. “Bring the price down, and more people will be willing to buy” Lehr says.

New Century Energies decision last year to join forces with two utility companies has created a stir among energy experts.

Because New Century Energies is really a renamed Public Service Company, joined up with public utility companies from Ohio and Florida. The new conglomerate wants to manage the bills of large national companies to lower their energy costs, the first step toward deregulation, some energy specialists say.

So far, only Service Merchandise, a national discount retailer with stores in Denver, has signed on.

And other experts say…

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