Does it make sense to deregulate utility meters before knowing how (or if) competition will work in the electricity industry? Or is it better to wait, to get a better idea of what customers will want, need and be willing to buy?
After all, the point is to give better choices to consumers. Shouldn't they have a say?
To open electric metering to competition implies standardization - collecting groups of engineers and scientists to approve technical standards for data formats and telecommunications protocols to achieve some degree of interoperability for equipment and software. It means creating a brand new industry virtually from scratch. That can prove tough to do without some input from the market.
Before Arizona regulators opened metering to competition, Arizona Public Service Co. had fought the idea, finding it "fraught with complexities." In Illinois, regulators and utilities have apparently decided to put meter deregulation on hold, figuring that it's difficult enough to introduce retail choice itself. That news comes from Arlene Juracek, vice president for access implementation (utilispeak for "competition") at Commonwealth Edison, who hosted a media roundtable for energy reporters in Washington, D.C., on Aug. 26. She admitted, however, that the unregulated marketers were not all keen on the idea of utility metering.
Anthony Mazy, chief originator of California's idea to open electric metering to competition, sees the issue almost in emotional terms. "Just because there may be a good reason to allow a single company an exclusive monopoly," says Mazy, "that doesn't mean that they should also have exclusive monopolies on related, but 'contestable' businesses." He adds, "Once it's decided that an area need not be restricted to a monopoly, the task is then to ensure a level playing field, provide penalties for anti-competitive behavior, and get out of the way."
Unfortunately, neither regulators nor utilities nor meter vendors are getting out of the way, at least to my liking. Enron said it all last year in a white paper it wrote for the Arizona debate: "It is not an easy task for a government to 'create' a market, when if fact, most markets spring forth spontaneously as the result of concerted and repeated human endeavor."
The deregulation process looks a bit like one of those radio or television contests inviting amateur musicians to submit compositions for a new official state song. (Didn't they try that once in Los Angeles, and give up when lyrics came back about smog and freeways?)
"Philosophical and Verbose"
As I began to research the article on electric meter deregulation that you'll find in this issue on page 52, one of the first questions to pop up was whether the metering industry should adopt something called ANSI C12.19. As I was to learn later, C12.19 is a technical engineering standard for data formats published by the American National Standards Institute.
The subject appeared crucial to California's Permanent Standards Working Group on metering and meter data, asked by utility regulators in that state to help pave the way for meter competition. In particular, the PSWG was considering whether to adopt ANSI C12.19 as a data format for the physical electric meter as one step toward interoperability for meters and metering systems. At the PSWG Internet site, posted messages flew back and forth, trading comments on various preliminary drafts of the group's final report. To judge by some of those messages, you would think you had walked in to the middle of a suburban zoning hearing.
"Quite a lively discussion," said one message. "Philosophical and verbose," said another. A third complained: "I feel very strongly that PSWG did not succeed in its mission. In fact, I get the feeling that many PSWG participants, for whatever reasons, do not feel it is important to achieve standardization."
Clearly, C12.19 was a flash point. But what was it? A matrix of database fields? A code of conduct? I interviewed at least 20 experts and could not get what I considered to be a meaningful reply that a utility regulator might be expected to understand. Here's one sample answer:
"C12.19, as described by one of its originators, Richard Tucker, uses indirect addressing' data memory accessing versus earlier versions [which used] direct memory' data accessing. If data is referenced as Table X, Offset Y bytes, Length Z bytes,' or Table X, Indices N1, N2, N3 ,' then manufacturers are free to make both hardware and software updates to their meter end devices without having to inform anyone how data should be accessed - it stays the same. For example, to access kWh data, it is always Table 23, Indices 0,1,0,1. ' This is a major improvement over the previous data accessing method."
Driven to frustration, I ordered a copy of C12.19 from ANSI, via second-day air. When I unwrapped my package I found about 170-odd pages of impenetrable software programming codes, stuff like "SELF-READ-INHIBIT-OVERFLOW-FLAG." Maybe it's better to leave the standards to the engineers.
Gelling as a Group
Buried within the definition of C12.19 lies everything that's both right and wrong about electric utility deregulation.
Consider the process: A working group, with 60 or so members, each an expert, whose time is billed in triple digits, spending weeks and months scrutinizing endless lines of formatting codes. What was it for? One member admitted faults but found a silver lining: "We ended up spending most of our time on ANSI C12.19. Sometimes I look back on PSWG and think, my gosh, there's so much left to be done. It's just a staggering task. But sometimes I look back with pride on what we did. We developed a group of people that respect each other. It gelled as a group. It takes a while to get the group dynamics going. We achieved more than we had a right to expect."
Is that the idea of deregulation - to gather together groups of wise men and women, to build comaraderie? Yet another source revealed undercurrents lurking behind the good feelings: "Many workshop participants, perhaps having significant financial interests at stake, seemed reluctant to give too much specificity to the PSWG Report. Ordinarily, a workgroup would define its terms at the outset of its work, concurrently with framing its mission and scope. In the PSWG, the opposite was done: It gave specific definitions to the terms it used during the previous five months' deliberations as very nearly its last act, making the 'meaning' of its workproduct one further point of negotiation."
I have nothing against standards, mind you. I only question who should set them. Why not consumers instead of engineers?
Here again I turn to one of my sources: "There is nothing really wrong with C12.19. The problem lies not in the standard itself, but in the amount of 'wiggle room' that a number of participants demanded hanging onto it."
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