[BETA] Fortnightly

YEAR 2000. MILLENNIUM. DEREGULATION. Each word strikes fear into the heart of meter manufacturers and utilities alike. Like the turning of the century, deregulation is coming for the electric utility industry, and sooner than we think. How will it affect the metering industry?

The first real indication can be found in California. There, by order of the state public utilities commission, the customer's energy supplier (the energy service provider or the utility distribution company) will, for the time being, own the meter. The ESP or UDC will choose its own "meter data management agent" to read it and manage the data. Other states are considering similar ideas (see sidebar, California Metering Rules).

The California model has changed the face of the utility industry, helping to create a new variety of companies. Enron, for example, which now owns Portland General Electric, plans voluntarily to move to open access by establishing the "power supply coordinator." The company has proposed that ESPs should contract independently with metering companies to obtain metering services.

What are these new entities, the power supply coordinator, and the meter bill collect company or meter data management agent? What are their functions? Modeled after the California Independent System Operator, the power supply coordinator will forecast load, manage schedules, provide settlements, acquire ancillary services, act as an ISO for distribution and probably manage service outages. It will not read meters (em that function will fall to the meter bill collect company, which may, perhaps, install as well as own the meters. This MBC will supply billing-ready data and may even process bills for the ESPs, competing for that business against other MBCs.

But how will the infrastructure work with all these new entities?

Here lie some fundamental questions. How will ESPs, UDCs, MBCs and MDMAs transmit this sensitive data back and forth between each other? What sort of communications networks will they use?

Some vendors in the automated meter reading business have already come to rely on proprietary communications networks to receive and transmit data. However, a switch to public networks would allow the industry to escape from this monopolistic and closed model. In fact, these public networks already exist and provide almost complete coverage of the United States.

Consumer Credit: A Model for Meters

The future of electricity metering is best understood not by looking at the telecom industry, but by looking at the whole process of consumer retail credit.

In retail markets generally, the bank acts as credit provider. Through credit cards and other deals, it offers consumer credit and acts as intermediary for cash transactions between consumers and the retail establishment. The ESP can also act as a "bank" (as do Sears and AT&T through their Discover and Universal cards). The ESP sells energy to the consumer, makes deals and handles the cash between the consumer and the supplier.

The Visa or MasterCard system uses an information technology infrastructure to process applications for credit at the point-of-sale terminal and then processes transactions to the bank. Visa takes no financial position in the transaction but collects a transaction fee. The