The search for cheaper electricity is in full swing, from the East Coast to the West.
Orange and Rockland Utilities, Inc. of Pearl River, NY, proposes that 1,500 residential customers...
they expand service into new states tend to be different each time. Customer-enrollment processing, available billing models, formats for electronic market transactions, data content requirements and even load-profiling approaches generally are non-standard, and this reality drives administrative overheads upward. These non-standard processes and protocols - and their extra costs - obstruct entry for some retailers, and ultimately may precipitate decisions to bypass some markets. Specific problems seen in new markets include:
- Interface requirements unique to jurisdictions and franchise areas,
- High acquisition costs for retail customers,
- Commodity margins so thin as to make the business unsustainable,
- Inconsistent rules about measurement vs. estimation of retailer loads,
- The non-liquid wholesale market,
- Difficulty reconciling wholesale power bills against retail usage,
- The ill fit of load profiling when markets mature and become liquid and volatile,
- High transaction volumes unforgiving of less-than-robust systems,
- Bottlenecked customer-usage information,
- Inflexible customer information systems unable to process the required data, and
- Divergent rules for electricity and natural gas in the same territories.
One way to structure discussions about these new information requirements and how they may be accommodated is to consider the information elements each party needs and when, and how the process of defining information requirements has changed. Obviously, these decisions and responsibilities are no longer left unilaterally to the utility. The table on pages 46 and 47, Information Requirements of Customer Energy Choice, highlights but a small number of the observed problems related to information architecture. The issue of who performs which information-related processes can be debated later.
The table provides a framework for constructive debate about how to solve these problems, as a prerequisite for consensus building. By considering how each problem affects key processes, one can infer the extent to which retailers, utilities and others will be committed to solving them. By pointing out the consequences of failing to respond, one can underscore the value of stakeholders coming to the table and negotiating. And by structuring potential solutions into opportunities for standardization, centralization, outsourcing and enabling by Internet access, one can broaden stakeholders' appreciation of both the objectives of an overall architectural framework and the latitude they may have during negotiations to realize their own interests.
The goal, make no mistake, is to begin serious negotiation among stakeholders that will lead to the sometimes small shifts in positions necessary to come to agreement on an initial set of best practices, which can be expanded upon later.
Eric Cody is president and founder of the retail access advisory group of NEES Global Inc., a consulting practice that advises clients serving more than 31 million meters in 30 U.S. states and four foreign countries on the detailed business processes and operating requirements of customer choice. The opinions expressed in this article are the author's alone and do not necessarily represent the views of NEES Global Inc. or its affiliated companies.
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