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Technology Corridor

Utilities are finding strategic benefits in demand-based metering technologies.
Fortnightly Magazine - February 2004

be structured for use during specific periods. They may expire at different times. And in all cases, when such tickets are used, the exact nature of the use and the accompanying separate energy and demand charges are spelled out in the bill.

Such programs are expanding. Greg Galluzzi of TMG Consulting says, "We have seen intelligent meter interfaces to CIS systems grow from mere pilots of 100 to 500 meters to full-scale implementations. The need for CIS systems to encompass this technology is imperative to providing customers with exceptional levels of service."

New metering dramatically expands utilities' data-handling requirements. Stepping up internal facilities for analyzing this data lets utilities experiment with different price signals and incentives. By gauging the effect on overall load and on grid constraints, utilities can maximize the return on existing transmission assets and reduce the need for new investment.

Just as important, utilities can use the new data to develop regulated and competitive products for specific customer niches. This is more than a profit opportunity. It is also part of a utility's public obligation. Utilities that fail to satisfy the complex and growing needs of larger customers, encourage them to seek alternatives like self-generation. The result may be both lower utility returns and increased system-maintenance costs for remaining customers.

The answer is not to chain customers to the grid with exit penalties, but to develop the ability to respond to their needs.


  1. Jim Spiers, "Energy Management + Price-Responsive Demand = Effective Customer Choice," META Group, July 2001,
  2. "EEI Member and Non-Member Residential/Commercial/Industrial Efficiency and Demand Response Programs for 2003," Edison Electric Institute, June 2003,
  3. Eric Hirst "Barriers To Price-Responsive Demand In Wholesale Electricity Markets," Edison Electric Institute, 2002,
  4. Demand response programs are, for instance, included as a general rule in the U.S. Federal Energy Regulatory Commission's current Standard Market Design (SMD) proposal. See also the congressional testimony of FERC Chairman Pat Wood at
  5. Jill Feblowitz, "AES NewEnergy Brings Economic Demand Response to Life," AMR Alert, Tuesday, Aug. 14, 2001.

Demand-Response Technology

Time-of-use meters measure consumption so that the total is divided among a relatively small number of blocks, generally two to five (on-peak, off-peak, shoulder, etc.). The block storing consumption changes according to the time of day or week.

Interval meters record a separate consumption measurement for each interval of time (each 10- or 30-minute period, for instance.

Costs vary widely. Typically, a residential time-of-use meter costs three to four times as much as a standard residential meter. A residential interval meter might be six times the cost of a standard one. A commercial interval meter might be about twice the cost of the residential interval meter.-G.W.


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