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Rising Power Prices: The Metering Industry's Big Break?

San Diego Gas & Electric turns vendor heads with its plan to install real-time meters, but the company could face heat from regulators.
Fortnightly Magazine - October 1 2000

known as "revenue-cycle services." The regulators have decided as a matter of policy that competitive energy retailers will find it difficult to compete against default service offered by the regulated utility distribution company unless they can offer unique metering and billing services to offer to electric consumers as part of an attractive marketing package. (For background, see "Electric Meter Deregulation: Potholes on the Road to Plug-and-Play," , Sept. 15, 1998, p. 53, and "What's Stalling AMR?" Supplement to Public Utilities Fortnightly, May 2000, p. 18.)

The danger, it's said, comes from letting the monopoly utility control access to high-tech metering, so that electricity customers find less incentive to choose service from an independent electric supplier.

Listen to this anonymous comment on the SDG&E plan, offered by an engineer from California who is familiar with PUC metering policy: "SDG&E's proposal does not appear to be a thoughtful response to the present market crisis as much as a rather callous effort to use the 'emergency' as an excuse to further hobble the restructuring effort in California.

"If the regulated utility rolls out a monolithic meter reading system, then what options are left for energy vendors? In the name of minimizing costs, you'll have a system that minimizes functionality down to the point of what one vendor and one vendor alone needs to efficiently conduct its business. That's not an open system."

This engineer sees SDG&E's application as more "about rate base"-guaranteeing recovery of the meter installation costs-than improving consumer choice.

But to be fair, there is evidence that SDG&E's plan would promote the kind of open architecture in metering systems that some say is essential for utility competition to flourish. That evidence comes from SDG&E's RFP issued to vendors. When contacted, SDG&E spokesman Ed Van Herik said his company's RFP was confidential. "It's a bidding process," said Van Herik. "We evaluated vendors and sent the RFP to a short list of companies in the metering industry." Even so, some details have emerged from interviews with industry experts, and those details seem to bolster the utility's case, especially regarding compliance with metering standards adopted by the American National Standards Institute.

According to GTI's Bill Rush, the RFP requires compliance with ANSI C12.18, the "optical port" standard. Moreover, Rush says the RFP states a "preference" by SDG&E for vendors who will comply with ANSI C12.19, the data formatting standard. Rush sees broad acceptance of C12.19 as crucial to the future of the electric metering industry.

"SDG&E's action is not occurring in a vacuum," says Rush. "What's behind the scene here is a grand plan to achieve full integration and eventual plug-and-play capability between meters and all utility industry systems. I think that by stating a preference for C12.19, SDG&E is furthering open architecture in metering systems. Frankly, I'm a bit surprised that ORA might see problems here."

Price Spikes: Making a Dent

"Real-time meters," says SDG&E, will "empower customers to take control of their electricity bills by reducing usage during times of peak prices." This trimming of demand, the utility adds, will reduce peak prices for