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This speech was delivered by Dan Taylor at 8:30 a.m., October 22, 1999. Ontario Electricity Technology Forum:  The New Reality, The Role of Technology in the Deregulated Electricity Marketplace, Toronto Hilton Hotel.

October 22, 1999

Electric Metering: "Who is measuring What? And I don't mean Watt!"

"The electric meter will be measuring both the Seller and the Buyer."

Dan Taylor IDSA Dan@DanTaylor.com www.DanTaylor.com

Dan Taylor 1543 Bayview Avenue, # 407 Toronto, Ontario, Canada M4G 3B5 +1 416-925-1668 Telephone   Facsimile # upon request

Electric Metering: "Who is measuring What? And I don't mean Watt! "

Thank you Mike (McLeod).

Good morning everyone.

First, I want to thank Kirsten Walli and the other organizers for inviting me to speak to you today.

I have been asked to speak about the Enabling Environment: de-regulation (or more appropriately re-regulation), technology and metering.

I have a number of issues to address. Most will be familiar to you and some may be new.

Let me quote my favourite economist, Joseph A. Schumpeter. "Economic progress, in a capitalist society, means turmoil".

That is why most of you are here today. These are tumultuous times in the energy sector and you all know that there will be winners and losers in every arena. The problem that we have is trying to determine what will actually happen out there. What will the final level of deregulation be? Or another way of putting it, what will the final level of enabling be?

Just who is being enabled? I would argue that the customer is being enabled. But more about that later.

Well, I’ve got good and bad news for you. The good news is that in the early days of open access we will all be taken by the hand and led through the process. The bad news is that the final level of deregulation is going to be based on your customer’s wants and needs and that is a moving target.

So how does technology fit into this? Lots of ways, indeed for many utilities, too many ways. We have lots of Information Technology to compete in the energy sales, service and support areas. Unfortunately it is very expensive in both time and money to implement and will no doubt be a powerful consolidation driver among Ontario’s municipal electric utilities, especially among the smallest 90% of them. They just can’t afford to compete and satisfy their customers cost / performance expectations at their small scale.

We can look for a coalescing down to 5-10 distribution utilities in Ontario within the next 5-10 years.

That is not all bad news for the people in this room. Some of you sell IT, some sell energy. Some of you, like our friends at Hydro Mississauga, Toronto Hydro and Ontario Hydro Services want to sell everything. I wish them luck. It is hard enough to do one or two things really well.  To try to meet the wants and wishes of your customers in every market sector is problematic at best. I would argue that the niche providers that meet specific needs of a highly focused market segment will do best.

The real future in the energy sector will be based on first-rate customer information systems. The utilities that use these systems when coupled with people who really understand marketing, communications, and the various energy businesses are going to do very well for themselves. They don’t have to be big; they just need to think ahead. Which brings me to the humble and ubiquitous meter. By the way, it is an industrial designer who happened to be a Benedictine monk we have to thank for the modern meter. He designed the first useable clock.

Meters. There are only a few things that define the electric energy business: generators (OH), high voltage distributors (OH), local distributors (MEU, some OH), meters (MEU, some OH) and lastly, the customer. That is the old model.

The new, and some would say, improved model is exactly the opposite. Customers come first, remember, they are voters too! Then comes the meter followed by the various ServCo’s, WiresCo’s and GenCo’s. Guess what is closest to the customer? The billion dollar GenCo’s? The billion dollar WiresCo’s or ServCo’s? No, the humble meter.

To be honest with you, if I could own one component of the electrical energy sector in Ontario, it would be the all the meters, MeterCo. Meters are the critical interface between your customers and your customer information system. If you get that interface right you have gone a long way to customer satisfaction. And as I said before, satisfaction is what the customer wants.

Just what do meters tell you? In a residence, usually just cumulative energy use. In the commercial environment, usually peak demand and cumulative energy use.

If you were an industrial designer, say like me, and had a client requesting a design for a meter from scratch, what would its functionality look like?  Remember, look ahead.

My new meter would include the obvious:

• Cumulative energy use

• Peak energy demand level

• Rudimentary computing capabilities

• Handheld reader interface with an external connection

But that is only a start and not good enough. Too much competition. I need to add some features, so I include:

•  Time / duration / level of peak demand use

• Higher computing capability and more memory capacity

• Meter diagnostics that can run at time of on site reading

• Meter software that is upgradeable at the time of on site reading

 Still not good enough.  I need to add more IT features, so I include:

• Com capabilities, could be telecom such as spread spectrum power-line carrier technology

• Polling capability

• TCP/IP Networking capabilities

•  Encrypted / decrypted data stream capability

• Energy management functions

• Meter diagnostics that can run at any time

• Upgradeable software by remote host at any time

  The previous features help the utility compete. Now we have to add features that satisfy your clients needs. Add:

• Functionality to buy and sell energy simultaneously through the same meter

• LCD or other screen to display real-time information for customer

• Water meter functionality or interface

• Gas meter functionality or interface

• Enhanced energy management functions

• Smoke detectors and alarm

• Natural Gas detectors and alarm

• Security systems

• Billing information

• Bill payment capabilities

• Etc.,………..

  And now the really big one:

• The ability to continuously measure the Quality of the Energy and other services provided to the customer by the local WiresCo and report those findings to that customer.

Now you know where meters are going. Meters are going to be measuring both the customer's use of energy and services and the supplier’s performance of supplying energy and services.

So make sure that when you upgrade your customer’s meter that you do look ahead and put in one that is designed to be upgraded easily and inexpensively to meet both your and the customer’s requirements.

There are real opportunities here for proactive utilities and companies.

The answer to my original question, Who is measuring What? And I don't mean Watt!

" The meter will be measuring both the Seller and the Buyer. "

Carpe Diem *.

Thank you for your time.