[BETA] Fortnightly

NO MORE METER MONOPOLY?

So they say. Many believe that utility control over electric metering exerts a chilling effect on retail choice in energy. They claim that competitive energy service providers cannot earn a high-enough margin on the commodity alone, but must offer companion services - metering, billing and value-added options.

Yet the road to competitive metering is pitted with potholes. Utilities, ESPs and private meter vendors and manufacturers can be found arguing over a raft of issues. Does unbundling imply full interoperability, with meters designed for "plug-and-play"? Or will the cost eat up all savings from retail choice? Interoperability implies open architecture - setting technical standards - but for which function or interfaces? Is it at the meter, where the customer takes the product, or upstream, where ESPs and utilities interact with system operators and grid managers?

So far the biggest fights have occurred over data formats and communications protocols. Regulators lack expertise; so they formed working groups - ad hoc assemblies of experts from utilities, ESPs, marketers, ratepayer advocates and trade and professional associations. Also taking part are meter vendors and manufacturers, who, given the chance to set rules for the future of their industry, have tended to oppose standards seen as aiding competitors or undermining the value of their proprietary systems and products.

The payoff, meanwhile, appears uncertain.

"Meter reading," notes Barry Goodstadt, vice president of regulatory affairs at Itron, a metering company, "costs about 1 to 2 percent of the total electric bill for residential and small commercial customers." He continues: "How much can you save out of that? Not much, I suspect, because even creating the structure will cost something. What you're really doing is setting up duplicative systems."

This issue is what confronts utility regulators in states like New York, Pennsylvania, California and Arizona, which have delved most deeply into electric meter deregulation. When that job is done, they must repeat the process on the gas side, where concerns over safety have fattened the debate.

As Goodstadt adds, "It's a tough nut to crack."

Competition: Pros and Cons

Michael R. Jaske, chief forecaster for the energy information and analysis division at the California Energy Commission, reports that by the end of July, electric utility metering, billing and information services were competitive to some degree in at least seven states - whether currently or by date certain, and whether by administrative order or legislative act. The issue was under study in at least five more jurisdictions.

Meter competition was first proposed for the record by Anthony Mazy, a professional engineer at the Office of Ratepayer Advocates of the California Public Utilities Commission. The rationale, as Mazy explains, was to help ESPs compete in a world where the metering equipment and infrastructure was designed and built for the peculiar needs of vertically integrated utilities. (Mazy's comments here, and throughout, are personal opinions; they do not necessarily reflect opinions of the California PUC or the ORA.)

"Certainly," notes Mazy, "the PUC, in unbundling metering, data management and billing, was convinced that ESPs needed these options to make a go