Utility executives face volatile energy markets, skyrocketing fuel prices, and changing federal energy policies. How are utilities benefiting from the turnaround in energy trading?
Internet Mavericks: Still Working Out of the Garage?
April by Jason Ambrose and Deirdre Polson, Plurimi offers Internet-driven software (PRISEM), that allows electric utilities and energy service providers to communicate to large electric customers in real-time the price they are paying for their electricity.
Access to the real-time information allows customers to make cost-based decisions on when and if to curtail power usage, conceivably based on a user's predetermined price "trigger point," which, if reached, would indicate that the cost of the electricity would not justify its purchase. Backers of this kind of technology say that its use allows deregulated markets to be truly realized, as it gives the customer the choice of whether to buy or not to buydecisions that ultimately impact the price of a commodity.
To be sure, Ambrose's Internet resume reads like an e-history book: involvement with Internet startups, primary technical resource at early online service company Internet Profiles Corp. (I/PRO), and even contributor to the pre-web, interdepartmental networks of the Stanford Medical School. These days, though, when talking to Ambrose, the operative words are , , and .
What led you to delve into the energy industry, and specifically into the area of demand management software?
My father has been in the energy industry for over 30 years, handling pricing for a lot of the large utilities. So I've been very familiar with the energy industry all my life. This is an opportunity to apply my experience on the Internet side to what's going on in the energy industry.
This is your first venture into the energy industry, right?
Yes, that's true, but we don't think of this really as an energy play, per se. What we're really addressing is the need for businesses to be to able to change their business operations on a dynamic basis in response to dynamic pricing.
So down the road, it's not just going to be electricity. It can be things like bandwidth, wireless accessany sort of commoditized good that businesses will use, and the price will be determined on a real-time basis. So we think of it as a natural extension of what we traditionally have done with Internet companies for businesses, but we're just starting with electricity based on my background and the pricing need that's in the industry right now.
What makes software essential for demand-side management?
The key ingredient that has been lacking so far is for customers to understand what their value of service is. So it doesn't do any good to send them price signals or create price incentives for them to curtail load unless they know what they value that electricity at, given how they operate. If you're going to pay me $10,000 to shut off my factory, how do I know it's not worth $20,000 or $50,000 or $100,000 for me to operate it, or vice versa?
Is the software useful only for interruptible customers?
No, we think of this as more generalized to all end-use customers. We think the direction of where the electricity industry is going to gofor deregulation to really work and for the market to get efficientis