Responding to one of the early lessons from electricityderegulation efforts in California and other states, Bellevue,WA-based Puget Sound Energy announced last week (Sept. 27) it istaking steps to eventually give all of its customers the tools toshift their energy use away from the highest-priced, peak-demandperiods. Elected and regulatory officials in other states likeCalifornia have already said that this so-called”demand-responsiveness” for customers is the one essentialingredient that is missing in their drives to create competitiveretail electric markets.

If the customer response is sufficient, Puget Sound eventuallywill be offering customers the chance to shift their energy use tocorrespond to the more cost-effective times of the day and weekwhen the wholesale power prices are lowest, a Puget official toldan international automated meter reading conference.

The Pacific Northwest utility company for natural gas andelectric service to 1.2 million customers in the western Washingtonstate region has invested heavily in automated meter readingdevices over the past two years, and it is now combining thatsystem with a data acquisition network provided by SchlumbergerResource Management Services (RMS). The combination is designed toeventually provide customers with real-time information (via theInternet) that they can use to alter their energy use.

The program is first being developed on the electric side, butlonger term, Puget Sound officials said it may be extended tonatural gas service also.

“I think there is tremendous potential for it nationwide becauseit is the most advanced technology of its kind to bring thisinformation to customers and allow them to be savvy consumers ofenergy in a deregulated market,” said Puget spokesperson GrantRingel. “Having the information in a timely fashion is a criticalelement.”

Puget Sound Energy will kick-off a four-month pilot effortinvolving 400,000 of its customers Nov. 1, including aninformational bill insert that will “show the economic impact ofeach household’s energy use at different times during the day” as ameans of getting customers used to the fact that on a wholesalelevel the price of electricity varies widely over any given 24-hourperiod.

“New technologies are changing the marketplace, and utilitiesthat act first will be the ones positioned to take advantage ofthose changes,” said Gary Swofford, Puget’s vice president and COO,speaking at the AMRA 2000 International Symposium in Tampa, FL.”We’re establishing a new kind of interactive relationship with ourconsumers.”

Puget is attempting to determine if automated meter reading andsophisticated Internet-based data acquisition capabilities that itis applying to gain operational efficiencies and cost-savings alsocan allow customers who want to see the dynamics of electricitypricing to manage their energy use based on pricing cycles.

“With the utility industry landscape undergoing significantchanges due to deregulation, Puget’s pricing initiative is thefirst step toward a fully dynamic pricing and energy deliverymodel,” said Brad Kitterman, president of Schlumberger RMS NorthAmerica.

Ironically, the state of Washington in which Puget Sound Energyoperates is not at the forefront of states restructuring theirelectricity industry due mostly to it unique position of havingrelatively inexpensive, plentiful power supplies.

“We are watching other states very closely,” Puget’sspokesperson, Ringel, said. “With low electricity rates, we havehad the luxury of being able to learn from activities in Californiaand elsewhere.”

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