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NEV?s Mike Peevey: Meters Make the Market

Fortnightly Magazine - June 1 1998

what I'm saying?

Is there any pattern to your decision to buy inside or outside the PX? Is that something you decide on a moment's notice or is there an overall strategy there?

Well, it's not a moment's notice¼ I guess you could say to some degree it's an overall strategy. The premise on which this business is based, here in California, is that we can lower your utility bill (em your generation function (em over what would have otherwise been the case if you'd stayed with your local utility, the UDC. To do that means that we have to beat the PX price, right? So we have to find sources of power that are below the PX price. Then the question of how we pass that on to the customer is a function of a lot of different things and it can vary from week to week and month to month.

Now that's not an automatic pattern. All I did is comment on one way of doing it. Let's say the PX price is $25. If you can buy power at $20 and you can sell that power to somebody else, let's say between $20-25, you can pocket that difference and then give the customer a discount off the PX, which is the published price that he sees.

That's one way of doing it. Another way is just to pass on a direct price to the customer. But you have to balance your demand, which could vary each hour of the day, as you know. We have all the responsibilities now in working with the schedule coordinator, which for us is LG&E, that the utility has historically done (em balancing loads, load shaping, load following.

Enhanced Services

Are you a registered meter service provider?

Yes we are, right. We have a contract with LG&E and Schlumberger. What is happening is that there has been significant utility foot-dragging on meter switch-ups. So we have not installed as many meters as we would have wished. Nonetheless, we are serving several hundred megawatts of load here is California as we speak.

This situation may or may not persist through June, but it's been a continuing source of irritation and stress and economic harm, frankly, and customer disappointment that not everybody that was ready for direct access on April 1 is being served because of the inability to switch out there own meters and install new meters. The utilities all have insisted approaches that require the most literal and difficult interpretation of every CPUC regulation.

Did you participate in some of the working groups on metering (em data standards and information flow (em either your company or representatives for your company?

The answer is yes.

So you didn't get everything you wanted in those groups?

That's a fair interpretation, yes. Well, let me say this. The utilities go in and say, "Well this is the first time ever for us. This is stressful. We don't know how to do this." They have a million-and-one barriers. In my view, it amounts to foot-dragging. It amounts to