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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

coordinated way, as opposed to dealing with SDG&E alone, because by the time we consider them, all the utilities should be out of the rate freeze."

Linsey has a point. Note that under its proposal as filed, it would take SDG&E nine and one-half months from the issue date of the RFP-until June 1 of next summer-to complete installation and testing of real-time meters for Phase I, the 22,000 large customer accounts with demand levels between 20 and 50 kW. SDG&E would not send out its RFP for Phase II until Nov. 15, and then would take 18 months-until June 1, 2002-before installing even as many as 200,000 real-time meters for accounts below 20 kW. Thus, even two summers from now, SDG&E would have interval meters installed only for about one-sixth of its residential electric customers.

Meanwhile, at Schlumberger, George Roberts sees the industry caught in an endless loop, as policymakers debate how to make metering policy mesh with competitive realities. He makes a plea for regulatory certainty.

"For the last several years," notes Roberts, "most states have been in a condition of maximum uncertainty. Metering has not been made competitive, but competitive metering has been identified as a distinct possibility for the future.

"Under these conditions," he adds, "it is extremely difficult for any party to deploy advanced metering. Competitive suppliers are, of course, prohibited from installing advanced metering because metering remains a monopoly service. However, while utilities are allowed to deploy advanced metering, they are discouraged from doing so by the possibility that metering might become competitive soon. With the prospect of competitive metering on the horizon, utilities have had no guarantee that they will be able to recoup that up-front investment.

"The end result is that customers are losing out on the benefits that advanced metering would provide. Once the PUC provides the necessary certainty, the appropriate parties will be able to provide advanced metering to customers. Only then will customers realize the full benefits of electric competition."

The Technology: Toward an Open Architecture

"The basic problem," says the engineer from California, "is to make it easier to plug in another generator than it is to plug in another toaster."

He continues. "Whether a $25 million AMR system is a good deal overall for SDG&E's ratepayers depends on many interrelated issues. First, is the technology based on an open architecture that allows incremental upgrades over time, in an upcoming period that promises dramatic advances in the services and value that such a system might provide customers, or is it based on a proprietary system that locks consumers into 1990s technology, or worse? Second, does the initial system enable multiple types of transactions between consumers and competing sources of services, or will it effectively limit consumer interaction to the existing monopoly service providers?"

Nevertheless, Bill Rush is bullish on the SDG&E plan. He sees it as a step forward for open architecture in metering systems. By crafting its RFP to require compliance with certain technical and operational standards, Rush believes that SDG&E has opened the door to true plug-and-play in