[BETA] Fortnightly

Consultant blasts national effort, says standards themselves are the problem.

Concerted efforts by utilities, retail marketers and metering companies to establish uniform business practices by implementing national electronic data interchange standards, or EDI, as part of retail competition, are being undermined by the EDI standard itself, says Doug Houseman, director at Cap Gemini Hagler Bailly.

"It is a very big, nasty, complicated monster. There are a lot of people that do not know what they are doing," he says.

Houseman says that EDI is not living up to its promise of giving marketers and delivery companies a single set of procedures for determining who gets what customer and billing information, in what format and how fast. In addition, EDI further complicates uniform practices on how customer switching and payments are conducted, he adds.

Utility industry EDI standards were formed by the Utility Industry Group, which is funded by the Edison Electric Institute and operates under the umbrella of ASC X12, the Accredited Standards Committee formed by the American National Standards Institute to set standards for EDI.

"[The public utility commission] says I have to be able to do them, but inside the 810 [EDI transaction] are 15 flavors of 810s, and inside those, 15 [more] flavors of 810s in the California market. There are about 400 options. Every company has decided that some of those options are not applicable to their piece of the market. They are just not going to do them," adds Houseman.

In addition, the plethora of EDI options is helping to vary business practices from state to state and creating costly barriers to entry for those wanting to compete on the retail level.

"To date, no two utilities have implemented things the same. When you end up dealing with multiple utilities, you end up dealing with multiple layouts and so on and so forth in the state. There are no central certification and testing authorities. You have to test with everybody individually," he says.

For example, if a company goes to Pennsylvania as a supplier, Houseman explains, it will have to test with PECO, PP&L and Allegheny individually to adjust to every company's particular business practice, as it relates to EDI.

Houseman estimates a retailer or energy service provider wanting to do business in a particular state must spend $500,000 to comply with a region's EDI standards before selling the first megawatt. In addition, the company will have to spend another $50,000 per utility in the region to meet varying EDI standards.

"Utilities are on their own schedule for whatever updates and changes [to EDI standards]. So I just can't go bing-bang and put in the 4010 standards for Pennsylvania because Allegheny is not going to be ready to do that at the same time the other folks are," he says.

Houseman does not believe utilities are trying to sabotage competition; rather, standardizing EDI has become problematic because utilities across the nation are on varying timetables to implement EDI. Fragmentation of business practices from state to state has been the result, he says.

For example, a utility wanting