Electric/Gas Convergence, Meter-to-Meter

Fortnightly Magazine - May 1 1997
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Enova/PE merger finds

California utilities learning

how to "micro-unbundle."

here's a meter war ticking away out West, pitting natural gas against electricity.

Enova Corp. is set to acquire Southern California Gas Co. through a merger with the gas utility's parent company, Pacific Enterprises. This strategy raises a tantalizing question: Can the new, merged company sell electricity "through" SoCalGas meters, using customer contacts on the gas side to grab market share in electricity from Southern California Edison, whose territory overlaps that of SoCalGas?

This prospect puts a new shine on electric/gas convergence. It shifts the focus from upstream commodities to downstream products. It redefines "customer relationship" (em from distribution functions to retail services, where the meter is king. In the pejorative, to those who want to keep control of their meters, it's called "micro-unbundling."

Simply stated, micro-unbundling describes the process of identifying the individual components of electric (or gas) utility distribution service, and asking whether such components should be broken out as deregulated services, opened to the market. The metering function marks one component.

Micro-unbundling could cede ownership of the customer gateway to unregulated marketers, allowing suppliers to provide telecommunications, Internet and other services. That is where the energy services industry will make most of its money under restructuring, some say, since commodities will sell strictly on price and carry thinner margins. That is one reason why many believe better meters are needed.

Micro-unbundling also has raised the question of whether gas deregulation should move lockstep with electric.

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