Amigo Energy - Industry

Industry

Amigo Energy is an electricity retailer that operates as one of 71 independent power marketers participating in deregulation of the Texas electricity market. Amigo ranks as the 17th largest power marketer by number of consumers according to a 2009 U.S. Energy Information Administration report. Generators are owned by power generation companies who sell the electricity they produce to retail companies, who in turn sell this power to end consumers. In order to deliver the electricity from the power plants to end consumers, Transmission and Distribution companies own the hardware – wires, meters, service trucks, etc. and also collect the meter data that are necessary for the electric industry to function. So retailers pay a service fee to the Transmission and Distribution companies on behalf of every customer, and they also pay power generation companies for the total amount of power that the end consumers use. The retailer tracks all of these costs and performs complex forecasts that ensure that they can offer a single billed rate to the customer while providing billing services, customer support, regulatory compliance, and effective customer communications.

In 2002, Texas began the process of deregulation by passing Senate Bill 7. One purpose of this bill was to increase competition in the previously monopolized electric utility market and result in customers switching their service patronage to retail electric providers not affiliated with the original incumbent monopolies. In the first few years of power deregulation, the Public Utility Commission set a “Price to Beat”, which was a premium price that the original incumbents must charge their customers. This allowed the new competitive retail electric companies to offer a lower price. The price to beat ended in January, 2007, and the original incumbents began offering competitive prices as well. Today, all retailers in Texas compete for customers based on price, customer service, and marketing effectiveness. According to the Electric Reliability Council of Texas, as of August, 2011, 56.2% of all meters in the deregulated territory (3.7 million) have switched away from the original incumbent providers and are receiving service from competitive retailers, including Amigo Energy.

The Public Utility Commission of Texas (PUCT) enforces customer protection laws for the citizens of Texas and provides access to consumer information. An important industry advance approved by the PUCT is discussed in this article on Smart Meter deployment across Texas (see reference).