The Energy Revolution in Texas: Sell Quality of Life, Not Kilowatt Hours

Texas is the largest power market in the U.S., and if it were a country it would rank between the UK and Italy as the world’s 12th largest power market. The state has one of the few power markets in the U.S. that is competitive and deregulated. That means it’s ripe for a revolution that Jason Few, the President of Texas energy retailer Reliant Energy, says will be focused on innovation, technology and selling “quality of life, not kilowatt hours.”

Few (who will be speaking at our Green:Net conference on April 29) and spoke on Tuesday at the KEMA forum, says retailers in Texas will need to increasingly look to offer services, like electric vehicle miles, the comfort of a constant 71 degree home, and instant access and control over home energy settings, to be able to compete in competitive market places. As Few puts it:

“Today electricity is a commodity that competes on price. Unfortunately the price model doesn’t hold a lot for our industry. But through competition we can create innovation, and Texas has a chance to lead the way on this.”

During his talk today, Few used his experience in the telecom world (he previously worked at cell phone maker Motorola) as a lens for viewing the recent introduction of competition to electricity markets. If companies don’t keep pushing forward on innovation, he said, they’ll risk ending up on the losing side of a strategic battle like Motorola did with Nokia. And competition in Texas won’t only come from other retailers, says Few, but also through the ecosystem of infotech companies that have been emerging in the space including Cisco, IBM, phone companies AT&T and Verizon, and even Google with its PowerMeter product.

Of course the Texas deregulated energy market has had its ups and downs over the past couple of years. Electricity rates have shot up at various times, when customers have expected deregulation to keep them low at all times. And the Texas market is highly dependent on the wildly fluctuating natural gas prices. In other markets like California, partial deregulation failed miserably (Enron!).

Reliant Energy, which is owned by massive power company NRG Energy, sells electricity and services to 1.6 million retail customers and is also the largest provider of electricity to businesses. At Green:Net Few will talk about how a utility can prepare for the coming electric vehicle boom.

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