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Electric/Gas Convergence, Meter-to-Meter

Fortnightly Magazine - May 1 1997

proposals for a corporate pairing that would cover such items as wires, meters, meter reading and customer service.

PE officials have come before the Council and the DWP board suggesting that they be the partner in customer service because of their proximity; Edison has made the same argument.

A City Council decision was expected by April on the RFP. On opening its territory, the Council has until January 2000, but will hold hearings this year.

Local market observers say the warring utilities know exactly what they're trying to achieve (em they want to forge customer relationships through retail services, metering or billing.

Even without a merger, PE and Enova are positioning to provide "integrated energy services," via a joint venture. On March 13, they announced Energy Pacific, a new company that incorporates several existing unregulated subsidiaries. The core business will include energy commodity buying and selling and related energy management services, initially for large-business customers.

Woychik, also a consultant at Strategy Integration, tells his utility clients to get as close to customers as possible. "That includes, of course, creating opportunity through metering and billing.

"This is a most-toys-win, most functionality of meter provider wins in the long-term retail game, without a doubt," he says. "No one argues about that. If you want to stop the process of competition, you want the least functionality of the meter and the communications system."

By trying to bar technology, Edison would retain the monopoly billing and metering function, he says. "So Edison's approach is get the cheapest stuff out there fast, 'and we want to install it for everybody because we're big wonderful people that just want everybody to have direct access.' And my view of that, is pardon me, that is not their real intent, their intent is to limit control and have as much opportunity to limit direct access."

Chris S. King, v.p. of CellNet Data Systems, which has 600,000 meters nationwide, including those at Pacific Gas & Electric and SDG&E, says it's obvious that one reason for the merger is to give SDG&E access to the electric customers in SoCalGas's territory.

"What this would do is it probably strengthens their ability to compete for those customers," he says. "They're already interfacing with those customers." Now, "they may come in and say, well you may want to stick with your current electric supplier, but let us do your metering and billing for you and we'll give you one combined bill."

King says he has changed his mind that metering should continue as a utility-owned monopoly. (Note: Last fall, King had endorsed a metering monopoly. See "Competition, at the Meter: Lessons From the U.K.," PUBLIC UTILITIES FORTNIGHTLY, Nov. 1, 1996, p. 22.) He bases his new opinion partly on the ALJ recommendation and "partly on just observing the evolution of the marketplace. And it appears inevitable that this sort of unbundling is going to happen as part of the industry deregulation."

David J. Cook of Cook, Perkiss & Lew, a San Francisco attorney who once worked for Pacific Gas & Electric, agrees customer relationships are