Restructuring Today
September 26, 2005

Meter that allows smallest to respond to price movement

MARKETER's VISION:

A new meter is being checked out in California that could play a major role in making markets work at a time when few know how much prices are going to spike.

          What do marketers want from a high-tech meter?

            Imagine a meter that would facilitate aggregating negawatts as well as megawatts;

            Imagine a meter today designed for dealing with price spikes;

            A meter good for peak shaving;

            Picture a meter that is two-way adjustable or addressable.  That means that it can be told to cut back on air conditioning or refrigeration or just be turned down a few degrees or turn off the power;

            The price needs to be competitive, and  

            Envision a meter that can tell -- where you turn out a light -- how much the monthly bill will be lowered if the light remains off;

          But wait a minute.  That mass of residential customers is the least likely group to spend money to replace their clunky, old meters.

          "If the cost recovery regime is quick enough," said NEMA President Craig Goodman, "such a type of meter could yield far more benefits to society," without stranded costs. 

          He envisions that type of meter as being bought and sold in the open market "like any other product."

          Well then who pays for the meter?

          One vision is for the marketer to pay in return for a longish contract or for the customer to pay over the contract's life.

          We talked to Tom Tamarkin, CEO of USCL Corp of Sacramento.

          He's chairman of NEMA's metering committee.  He showed his firm's meter at the Las Vegas Metering America show in April.

          His meter is to be branded Energycite.  They have only a few hundreds of them now to show but he's arranged for a large volume of them to be produced in China sometime in the first quarter of next year. 

          What is this class of meter called?

          "A variable rate meter," he replied.  Time of use is one category.  Peak demand is another, he replied.

          The most generic term is "variable rate." 

          But is the equipment available right now?

          "We're installing 350 units at Southern California Edison as we speak.  A hundred meters are in now."  He calls it the Los Angeles County beta site deployment.  It's first generation -- not commercial -- fully functional devices that are more expensive to make to make sure he get all the kinks out of it.

          The commercial-priced units will be available in the first quarter.

          His USCL is working with the PUC's energy efficiency partnership grant that's going to the county's public housing authority.

          SoCal Ed sought grant money to do the beta test so that USCL is getting paid by grant money. 

          Tamarkin believes USCL is leading the field right now but expects lots of competition over time. 

          He envisions AMR's being quickly replaced by AMI, advanced metering infrastructure. 

          "AMR was a meter with a transmitter in it and the guy would drive by in a van once a month and he'd get a read of data" gathered over the month, Tamarkin said.

          With AMI the meter is connected with a WAN, a wide area network getting the data to a utility "in a fixed-network configuration."

          The utility can send information to it or retrieve information from it.

          He calls that "remotely addressable."

          What makes California stand out in this area is the Title 24 construction code may set 2008 as the due date for all new buildings -- even residences -- to have programmable communicating thermostats inside the home to talk with the utility perhaps through the meter. 

          What about cost?

          The meter itself outside the home can be made in volume for less than $50, Tamarkin assured.  Add to that the in-home display and total cost "is in the $150 range," he added.

          A big boost on Thursday was the PUC's OK of $2 billion for a new incentive program for those who replace inefficient units with new, efficient equipment.

          Stepping back for a moment, Tamarkin describes what USCL is trying to do is to change ratepayers into customers by giving them the information they need to know what they're buying and what they're paying for it.

          The California PUC approved too $49 million in preliminary funding for Pacific Gas & Electric's advanced metering initiative.

          It's an interim decision letting the IOU move forward with the concept.

          PG&E wants to put in advanced meters for all 9.3 million gas and electric customers.

          The utility still needs PUC approval for deploying the meters. 

          Installation would take five years.

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