Restructuring Today
October 24, 2005

Advanced meters give marketers shot at getting new customers

That's because the timely and detailed information can boost the products and services marketers can offer.

          But what's the best way for advanced meters to be installed?

          That was a big question Friday at NEMA's industry roundtable at the US Capitol since competitive metering hasn't taken off.

          Texas recently ended its competitive metering program because neither incumbents nor marketers had been successful in installing new technology.

          Competitive metering boosts the costs of new meters because you can't take advantage of bulk buying and economies of scale in installation.

          Individual marketers installing advanced meters wouldn't use enough to get big discounts.

          Putting them in on a disjointed, customer-by-customer basis would be costly compared with an incumbent utility placing a big order.

          The incumbent's supplier could sweep neighborhoods at one time to install meters.

          The quickest -- and perhaps most realistic -- way to get advanced metering rolled out would be urging state regulators to make IOUs do it.

          Utilities -- cool to the idea -- could resist especially where it might help marketers.

          But incumbents would get benefits from the smart meters, too.

          They want more timely and detailed information just as much as marketers do, so resistance might seem muted.

          Utilities would want to recover the costs of implementation through ratepayers.

          That's unfair, NEMA President Craig Goodman said, because it gives incumbents a "free" technological upgrade that can help them keep customers without any investment risk for the incumbent thus putting marketers at a disadvantage.

          That's why NEMA has supported competitive metering.

          But marketers agree the issue needs to be re-evaluated because the benefits from smart meters are too big to miss. 

          Tom Tamarkin, CEO of USCL, demonstrated his firm's meter at the roundtable.  We told you about it last month (RT, 9/26).

          Tamarkin sees his advanced meter giving marketers bigger branding inside a customer's home.

          The meter lets customers check real-time power use and prices on a computer, TV, PDA or other devices -- automatically updated every five seconds.

          That lets customers see how much turning on one more appliance would boost costs.

          That turns ratepayers into customers, he said, engaging them in choices about power.

          It makes customers more receptive to added information and product choices marketers could offer.

          The process helps build loyalty too, he thinks, as customers associate power with their daily lives.

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