How much will US retail markets grow in coming years?
---
About 7%/year?
Why
not ask the experts?
We checked with KEMA's Taff Tschamler who studies that question
almost every day and is considered the nation's leading consultant in
the area.
He sent us a summary of an almost 100-page document with data
broken down state by state.
From now through 2010 the average growth in switching, he expects
market growth will be 7%.
That's the base case. If the growth is on the high side he put that
at 13% or as low as 3% on the low side.
That's the forecast for residential and C&I mixed together.
What happens to pricing may play a major role as markets unfold, he
predicted, thinking about what would happen if prices do fall.
Tschamler cited New England where prices this winter "will be very
high" such as 13¢ for the generation charge where recently they've been
paying about 7¢.
"By the time spring rolls around ... customers will be tired of
paying 13¢," he observed.
Tschamler noted power prices have begun to fall in recent weeks. At
least in the short term he sees a real possibility that the high case
may become the base case there.
One factor depressing the 2005 forecast, he noted, was the large
return of Ohio shoppers to utility service.
Obviously the leading market is in Texas, way out in front as
number one followed by New England, New York, PJM (except certain
states).
Western and midwestern markets "are less attractive."
For residentials the growth is expected largely in New York and
Texas. Last year's 2.2% growth is to hit 4.1% by 2010.
That means that the 28 thousand terawatt hours would about double
to 60 twh by 2010.
In the high case it's possible that some states could open up for
heavy residential shopping in places such as Massachusetts and
California, he told us after the vote on Prop 80.
The spread in the high case would boost shopping by 25.9% compared
with a base case of 13.8% and a meager 3.8% in the low case.
Then if you break out the C&I market outlook, KEMA reports that
13.3% of US volumes shopped last year but that's to grow to 16.7% in
2010.
That's 302 twh bought in open markets compared with 433 twh in five
years.
He expects little change from the high case at 3.2% gain to the low
case at 2.3% growth -- the increase in those eligible to shop.
Tschamler put the high case actual growth potential at 10.7%, base
case at 6.2% and low case at 3%.
Originally published in
Restructuring Today on November 14, 2005
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