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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

you have a legally mandated customer base and the customers in turn face a legal monopoly for their only source of service, then "marketing," per se, gets rather perfunctory.

Of course, Michael Shames is familiar with all of that. But when questioned, he suggested that his group might well support a meter installation plan run by the utility itself-at least in Phase I for large-volume customers-if only to make the best of a bad situation.

Shames explained further. "In general, we support the deployment of real-time meters. [But] we have come to realize that such meters will not be deployed by the competitive market in any kind of timely manner. So far, the ESPs have failed miserably to deploy such systems-but through the poor design of the California market, more than through their own inattention. So we believe it is useful for the UDC to serve as the installer of real-time meters, but on a transition basis only."

When told that the Office of Ratepayer Advocates intended to protest the plan, owing to its possible chilling effect on competition from independent retailers, Shames acknowledged the problem but took a practical bent.

"We long made the same arguments about interference with the market-until we realized the market wasn't going to get there any time soon because of the screwed-up nature of the California experiment. SDG&E's application deals with large customers first-and we don't conceptually oppose (as ORA does) the company's role in installing and maintaining these meters."

Yet Shames concedes that UCAN might change its stance.

"There are going to be a substantial number of detail-laden issues about deployment of small customer meters," Shames notes, "including who pays, who maintains, what choices customers will have, cost of ESPs to use, rate schedules that will be used in conjunction with the meters, etc. Those issues may cause a great deal of friction. The devilish details may cause us to reverse our field. [But] because SDG&E is not proposing near-term deployment for small customers, I'm assuming I'll have an opportunity to work through these things with SDG&E."

When pressed, Steve Linsey from the ORA seemed to admit that his agency might draw a distinction between customer classes when it comes to any perceived threats against California's regime for utility competition. Is one customer class more vulnerable than the other in terms of monopoly influence over the metering function?

"Let me answer that question a little indirectly," said Linsey. "We would absolutely draw a distinction between Phase I and Phase II, not necessarily on the monopoly issue, but on the fact that the widespread rollout of real-time energy meters is a statewide issue, not merely an issue for SDG&E, and should be considered for all the utilities together, and the customers they serve. Should the state embrace a single technology? Should it embrace a whole host of technologies? Should it have some strategy for how you roll out and make a significant investment in infrastructure? I don't know what the answers to those questions are, but it seems like they ought to be considered in a