The Reason Foundation, a public policy research organization, has issued a report, Federal Power: The Case For Privatizing Electricity, recommending privatization of the Tennessee Valley Authority...
Metering, Loads & Profiles: Let the Cherry-Picking Begin
the Central Vermont system. In other words, because customers have had real rate choices over the past 25 years, they should already have self-selected themselves into more homogeneous groupings that are easier to more accurately approximate using statistical methods. Utilities with more expected variation within a class can increase the size of the sample to increase the confidence in the estimate of the class load shape, but the variation within the class still represents a possible opportunity for savvy vendors to siphon off the 'best' customers.
Many questions remain over the future of electric utility restructuring. Yet, one should clearly expect that as cost measurement improves, so will industry performance. In fact, notwithstanding the current capacity "glut," it appears likely that production-capacity costs will rise to a level that virtually requires accurate measurement of consumption. If such measurement is not implemented, then any resulting market opportunities will certainly be exploited.
If retail choice comes to Vermont and smaller customers are eligible, this data could determine the usage patterns and cost assignments applicable to those smaller customers. Nationwide, utility rate classifications and associated load research efforts will affect not only cherry-picking, but the restructured industry's performance. F
Howard M. Spinner is director of special contracting and pricing at Central Vermont Public Service Corp. Among other responsibilities,
he heads the company's load research effort. Spinner's opinions do
not necessarily reflect the views of Central Vermont Public Service.
1About 23 million small commercial and residential customers in the United Kingdom will be subject to retail choice based on load profiling in 1998. See, "Competition at the Meter: Lessons from the U.K.," by Chris S. King, Public Utilities Fortnightly, Nov. 1, 1996.
2According to the California Public Utilities Commission, a statistical load profile as "an estimate of a group of customers' (usually by customer class) hourly consumption over a given period of time¼ a statistical sampling technique which allows customers with load variances to be represented by a single measurement." The PUC adds that the scheduling coordinator or marketer will use the load profile to determine the customer's hourly consumption. See, Re Proposed Policies Governing Restructuring California's Electric Services Industry and Reforming Regulation, Decision 97-05-040, May 6, 1997, 177 PUR4th 1 (Calif.P.U.C.).
3The pre-restructuring penetration of interval metering varies across utilities. For example, in New Hampshire customers with maximum demands less than 100 kW are expected to participate in retail choice via load profiling. See "Restructuring New Hampshire's Electric Utility Industry: Final Plan," NHPUC Docket DR 96-150, Feb. 28, 1997, 175 PUR4th 193.
4In his November 1996 article (note 1), Mr. King reports estimates showing a $480M cost in the U.K. for associated data processing systems.
5To add customers that, given the relevant cost assignment rules, complement the LSE's existing load by being non-coincident with that existing load thereby increasing the load factor of the LSE's total load served.
6Approximately 6 percent of CVPS residential customers take service on a single-meter TOD rate. There are also substantial penetrations of controlled load water heating and storage heat on the CVPS system.
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