The consumer is really up a creek without much help in measuring use and cost for anything like real time analysis and as a layman who has worked at energy conservation in my home (like many homeowners have), the lack of measurement just smacks you in the face all the time. There is so much to here to develop and so much need. Personally, I need data per circuit, per room, per outlet, per appliance and then I need the graphical software that wil make sense of this and make recommendations based on historical data. I will give just a few examples to make my point:

You have a heat pump. You know adding radiant barrier or thermostatically controlled attic fans to your rafters/roof could decrease the amount of time the heat pump runs in the summer but you wonder whether or not decreased attic heat gain in the winter will increase your winter bill. A temperature sensor in the attic recording one year of data combined with one year of electrical usage data and decent home energy management software should help you with the projection. Right now...it's your intuition and a hit an miss approach to remodeling expense that guides your decision making.

You run a small business in your home. You have six servers of different makes and models and Operating Systems and (BIOS) power management versions. You cool your office with your heat pump. You want to know how you should update your servers (e.g. replace) or constrain them (virtual servers, consolidation of services, etc.). Right now...this is just hit and miss...You take an educated guess think about if the the decision is economically feasible and ....

It's like this with every decision...for every appliance you buy. Just think how much decent software would help consumer organization measure the actual efficiency of "Smart Power" appliances. Does that refrigerator really use only 450 KwH per year? You don't really know until you buy it....

Thanks

Ryan M. Ferris www.rmfdevelopment.com/energysa.html

By merging what the author wrote I can come up with the following statement:

Advanced metering systems that enable new and variable prices issued by competitive retailers, which can be downloaded into meters over the network, create opportunities for regulators to enforce energy policy, retailers to differentiate their service, and for consumers to choose from an array of offerings to find one that best matches their needs and lifestyle.

The process of integration and restructuring of demand is what I call the development of the resources of the demand side, which should involve 2GR on: 1 - long term planning, 3-5 years; 2 - resource adequacy, 3-6 months; 3 - operations planning, 1-2 weeks; 4 - day ahead scheduling, 12-24 hours; and 5 - real time security, 5-180 minutes. The last activity is under control of the system operator.

To allow 2GRs to differentiate their services, regulators should shift from price control energy policy to prudential regulation energy policy, so efficient variable price offering plans are selected by customers (not just consumers anymore) to choose the plan that best matches their needs and lifestyle. This means that 2GRs will develop business model innovations to compete in the retail and wholesale markets.

Recalling the post Synthesis Proposal Agreement of EWPC, the essential generic market model paradigm is: retail competition with active demand and ultraquality transportation. So there is a need for ultraquality transportation, which requires integrated transportation (transmission and distribution) operated on the Normal State (probabilistic concept) on every utility because demand is active and endogenous. For the same reason, no entity related to the retailer should operate transportation at all. That is a requirement for incumbents in the EU to handle, even for UK operators.

In short, as part of the ongoing generative dialogue, I see EWPC a lot closer.

Every customer needs to have a contract with some entity to be able to be connected to the grid. It is not an imposition, but a reality. EWPC has a value chain vary familiar in other industries without price controls: wholesale, retail, customer.

The contract can be with a generator (like a wholesale customer in other businesses) or a retailer, since distribution and transmission only deal with electricity transportation under EWPC. 2GRs, as explained in the post above, is a paradigm shift from 1GRs that deals with the 5 activities required for the development of the demand side, which may have customer owned DGs and grid smart PHEV.

By the way, I agree that the author might be agnostic to some of the issues we are discussing. However, we should invite him to speak for himself about the impacts of shifting from 1GRs to 2GRs, ultraquality transportation and the several meanings of the term utility.

Echelon was one the first companies to do a large implementation of metering infrastructure to ENEL Italy.

Doesn't sound very promising though.

Distributors should no longer perform retail services to end-users and should be integrated to transmission, and thus not be able to make contracts with end-users. That is what EU is calling for, following the UK model.

Every end customer that used to contract with distributors needs to make a contract with a middleman (AKA retailer). Those retail services should be served by competitive retailers. A wholesale to customer switchboard is just one of many the business models of middleman. So no switchboard monopoly is allowed in the EU.

Three day ago I told you that “I agree that good businessmen would like to get a large market without competing, like "a sufficient number to flatten the demand curve." However, I suggest that it should be the market that selects the winning business models for every market segment.”

What I was saying about Echelon is old. ENEL as a regulated retailer made a large roll out of Echelon's electronic meters (I think to preempt competition) and Echelon had some difficulties meeting the contract. In short, they are experienced.

I flat disagree. There is no reason for a supply contract. Do I make a supply contract with a gasoline refiner, or distributer? So why with electrical. IF there existed a true market in which all suppliers and customers participated, (again, think gasoline) with zero transaction and invoicing costs, there is no further requirement.

Electricity is not yet a commodity like gasoline, which can be stored at every location in sufficient quantities economically, where customers would drive to get it. That is the mistake behind the energy only market, discussed recently.

Electricity is not a true market either. Under vertical integration it is a controlled market. Under EWPC there are two markets operating at the same time: 1) a controlled market of the "wires only" bare bones transportation utility, which is developed by a system planner, operator and controller, and 2) a non real time open market with a wholesale, retail, customer value chain.

However, I agree with you that maybe in 20 or 40 years electricity might emerge as a commodity in advanced countries, later worldwide, when the penetration and efficiency of PHEV has a large enough installed capacity, and large base load power plants are no longer needed. There are still other competing technologies and breakthroughs required to such far away scenario, including environmental impacts of battery technologies. As such, at least one PHEV in every world wide garage is a very risky proposition. Other alternatives will be available to guarantee security.

In the mean time, many new technologies, like solar and wind, will complicate the storage issue. EWPC then becomes a transition paradigm to electricity as a commodity that should have started in the 90s, where the need for retailers is very clear. Integrating demand in power system operation requires the 5 sets of activities, starting with long range planning, to develop of the resources of the demand side. The basic issue is to avoid long run (adequacy) and short run systemic risk (large blackouts).

During the transition, wholesale to retail switchboard will be just one more retailer. I don’t discount other business models scenarios emerging to replace gas (i.e. hydrogen) service stations.

There is simply no reason for implementation of the fair market system to wait for any of these technologies. Implementing the market has no pre-condition requirement for them. It is a pure regulatory choice which could be done successfully immediately.

Further, without such a market to fairly compensate advances in local storage, efficiency, load levelling and generation we are much less likely to ever see any significant implementation of them, which seems to be the basis of much of the resistance.

If you believe that, perhaps you might theoretically describe any potentially successful alternative in the same level of detail I have, so we can discuss it's at the same lavel. Personally I don't see any alternative fair "retail" system which accomplishes all of the goals with the same level of flexibility. There's really no alternative of an open free market, and to implement that we need smart meters and some disinterested party ro operate the exchange. Think stock market, etc.

I don't need to have an alternative document. There are many player today in the market which have deployed subsystems for demand response, AMI-AMR, energy efficiency, etc., which will be integrated in the future to satisfy diferent market segments. New developments will also arrive as customer feedback develop.

As the author says: "...the full potential of smart meters to enhance competition, enable energy efficiency, and create a new market of innovative energy services so the benefit of consumers as well as utilities can become a reality."

Disagree completely quoting me as "the rules are not required," in an open context. EWPC is about market design and architecture, which is about rules.

I hope other readers, including the author, will enrich the dialogue with forward looking statements. Maybe they can supply info on what's emerging, which we have not perceived yet.

Otherwise, please let the readers make their own conclusions of this extended duopoly.

Let's see if other people understand your position. As you read earlier, I don't have a position; I am open to find out what's emerging. Readers don't even have to write a line to make their own conclusions. We wrote enough already, under this article, and in many others in energypulse.net. Give them a change!

Let me say one quick thing however. I saw someone ask if we Echelon has smart metering products. Echelon does indeed have smart meters -- and more importantly a complete smart infrastructure -- on the market today. It is already being deployed in high volume and we believe it is therefore more mature, feature-rich and cost-effective than other offerings just now coming to market.

Len,

As explained earlier in detail on energypulse.net and in my presentation at Carnegie Mellon University, EWPC is an emerging paradigm of market architecture and design, open to a generative dialogue. See "Why a generative dialogue?" on slide 4 of the presentation. So, I don't have to be downloading and reloading a position, but concentrate on listening to what's emerging.

Recently, the members of UtilityAMI saw a similar need to provide direction to the vendor community and other stakeholders on what is needed to implement the utility to consumer communications interface to consumer devices and systems. The new group - OpenHAN (http://sharepoint.ucausersgroup.org/OpenHAN/ ) is developing use cases, requirements, security guidelines, and high level architecture for the home area network and the devices connected to it from the utility applications point of view. This is a very active community that is engaging utilities, vendors, and regulators. The results will likely be seen most clearly when California adopts its mandatory programmable communicating thermostat regulations in late 2008 / early 2009.

Implementing the dynamic face of energy efficiency - direct load control, price responsive demand response, intelligent energy management - is a significant systems engineering problem as well as a problem requiring regulatory stability. Technology is not necessarily the problem - we have plenty of technology. To use it there needs to be a clear business case for all partieis involved and the end user needs to be isolated from the details of the technology so they actually use it. EPRI's concept of prices to devices says it well - give the end device the ability through technology to know the context of its energy use including price and let it decide how to use it so the end user doesn't have to.

Erich W. Gunther - Chairman - UtilityAMI and OpenAMI

Is utility price control regulation remaining with UtilityAMI?

If remaning, Is there a business case that support such price control?

Is transportation reintegration being considered?

If not, Is there a business case that support native loads or Is it just political?

Is retail competition not required?

If required, Is there a business case for 2nd Generation Retailers (2GRs) as envisioned above?

Is there a need for the develpment of the resources of the demand side as explained above during a transition to stored enough electricity or system planning will be done just on the supply side?

Thanks,

José Antonio

Could you post how energy consumers best can become involved in this process?

Additionally, I have other questions. For example are you aware of efforts by vendors like Carrier to extend thermostat control to the web via programmable interfaces. For example, I actually paid $500 for a thermostat with attached cell interface for an HVAC remodel I completed only to find that the cell service wasn't supported in my area. I am hacking my way through Serial to IP driven wireless solution now...The linkage to smart phones and PDAs and remote control seems like an area of real promise...

We are very much concerned about Global warming and I am sure that it is a very positive beginning in that direction to not only control the emission of Green House gases but subsequently reduce by way of change in the consumption pattern.

Smart metering, Advance metering, two-way communication all are Good but to the extend to the Electricity Service Provider. The consumer is still not provided with the benefits directly.

The system should be able to provide some kind of control mechanism in the hands of consumer. Through any technological innovation, we can send signals to change the behavior of the consumer/consumption pattern but at the end it is the consumer who should have the freedom to decide depending upon the individual judgment. In this era, the technology should also support elimination of middle man.

Recently I come across another innovation in automobile. That is a talkative car which reminds the Driver and passengers of any anomaly e.g. door open, Seat belt not fastened etc. The same innovation can be adopted to VALUE ADD this new and advanced metering technology solutions. It will help then in two ways, through the Display (Eye organ) and through listening (Ear organ). We should then try to innovate so that other sensory organs are also become an integral part of the entire system to make this system a complete system from the perspective of real time information, better and quality consumer service, network reliability and security at a affordable cost.

Once again thanks and heartily congratulations,

Praveen Goyal

Your ideals are interesting. EWPC is a market architecture and design which is customer and environment oriented, aimed to take into account the needs of customers at the Bottom of the Pyramid as seen on slides 38, 39 and 40 of the presentation at Carnegie Mellon University last March.

Recently, I suggested “that regulators worldwide should shift from price regulation to prudential regulation, under a global institution,” on the post Synthesis Proposal Agreement of EWPC, and had an objection right away the global institution.

2GRs are an alternative to 1GR if we are to integrate demand into a synchronous power system without sufficient storage, everytime, everywhere. Unless there is a prudential regulation that protects customers from abuses, I agree that middlemen should be ideally avoided. In practice, that may be just a dream for quite some time.

See also the post Ongoing Generative Dialogue.

"By developing a market on customers differentiated supply security (sensitivity to shortage) requirements, an efficient rationing system can be developed."

This statement highlights to me the key error I feel you are making in EWPC, which is assuming that any individual customer of electricity will have a single (sensetivity to shortage) characteristic which classifies them for at least a long contiguous time period. If you think about it, that is not the case. As a customer, my sensetivity to shortage will alter dramatically on a daily basis depending on what I have happening. I may normally accept some significant inconveniences regarding supply in order to feel I make a real contribution to the conservation efforts of my society, but if my inlaws are visiting for a week in midsummer, then FOR THAT SHORT PERIOD, I will wish to have unlimited access to all the electricity my A/C unit needs. Again, I may normally accept having my PHEV only partially charged up by most mornings if the supply is exceptionally expensive except for a 4 hour period after midnight, but if for some reason my contract requires me to arrive at the downtown corporate office 50 km away rather than at the suburban branch I normally work from, for two week, then FOR THAT SHORT PERIOD, I will wish to have much greater access.

These sorts of fluctuations are what is at best only very poorly recognized by your proposed "every customer deals with a retailer" model, and which I address with IMEUC, eg. a single central market with zero transaction costs, where every customer gets continuous access to every supplier and the price is set by a LMP model. With that system, I have no need to concern myself about what the precise wording of my current retailer's contract says regarding my significantly exceeding my typical load profile for a short period, etc.

Your system, where customers are forced to learn to choose among a plethora of differing "retail contracts", is simply a recipe for customer frustration and inaction. Best is to define what the ideal set of rules will be for grid reliability with (minimal - or - none) reserves, then explain / train / rollout that system to all customers. You will no doubt try to respond that "best rules can only be found by retailer competition, but that is not true when the rules we are all looking for are "what rules allow maximum grid / supply reliability with minimum reserves and lowest cost generation?". Those rules are very simple. A single marketplace where every supplier makes their offerings available and customer continually selects their requirement from among those suppliers on a fifteen minute interval. No arbitrary restrictions on who may be suppliers or customers, all operating equally.

Without such an infrastructure, no free market in electricity can exist and no grid can survive without huge spinning reserves, nor can the grid accept unreliable generators such as wind and non-storage solar. Your "retailers" won't help.

With such an infrastructure, your retailers are simply a costly redundancy.

Len’s opinion of a gasoline pure commodity example tells everybody to go to a gas station to a retailer. It is not possible for a small customer to purchase gas from the refineries yet! Why is that?

Electricity is even more complex than gasoline as short run and long run systemic risk management require the 5 kind of activities I have mentioned earlier from planning to real time operations of a centralized market. As you read earlier, energy market only are unreliable.

I believe that as readers of energypulse.net, we are still waiting to learn how switching every 15 min. would get better prices for customers under LMPs which operate under centralized markets. Below are a few quotes under the article Playing with Fire - Part II and a quote from today at the end. Readers should draw their own conclusions.

On 1.6.07 Len posted: “It's something that I've known intuitively all along, but am just coming to clarity on the details now. The real problem with de-regulation as currently advocated variously in North America is the LMP pricing model. The justification for LMP pricing is "aure it often pays far too much to the large low-cost baseload generators, but those plants will have that added value built in to their capital value as they are bought and sold on the open market, so the shareholders who own the plants will have paid such a high price for the plant that they will not be making an unusually/unfairly high return on their investment." On the same post above Len adds: “I simply don't see why LMP is a better market design than having every customer make specific 15 min contracts a day in advance with any of the individual generating entities capable of delivering to them, which is a real market and given a bit of technology will work just fine…. See my coming article for more. ”

On 1.6.07 I posted “…The reason I perceive is that he now sees the LMP concept in the way of his wholesale to customer switchboard….”

On 1.8.07 responding to another post of Len, I posted “…Thanks Len for your insistence against LMPs….”

On 7.27.07 Len posted “…which I address with IMEUC, eg. a single central market with zero transaction costs, where every customer gets continuous access to every supplier and the price is set by a LMP model.”

My understanding of EWPC is it operates a central wholesale LMP market, but only a priveleged few (the Retailers) are allowed to participate. How is that different in any significant way from eg. most present de-regulation experiments, including California 2000? Why should said retailers be granted that priveledge. (And BTW, I DO have the option to purchase me gas from either a wholesaler, eg. large integrated company like Shell, BP, Texaco, PetroCan etc. or from any of a myriad of small players like the no-name-brand reetailers.)

Thanks for your patience. I think the long discussion with Len, on whether retailers can be bypassed or not, has a high noise to signal ratio, which seems to be unproductive for the energypulse medium.

If retailers can or cannot be avoided remains a paradox for other readers, I want to know from a fresh perspective, but which I will not engage. I will consider the rear mirror debate (learning from the past) on retailers closed with my post of 7.28.07, going back to the possibility of a generative dialogue (learning from the emerging future).

Returning back to Jeff’s article and with a lot of respect for all readers, including Len of course, I suggest readers and the author to consider my post of 7.17.07 and my responses to Erich and Praveen, not as a position, but as to what seems to be emerging.

Integrating energy efficiency, demand response and other services with advanced metering to the homes makes a strong business case for 2GRs as the developer of integrated resources of the demand side. This is a change from a supply orientation with flip the switch service (exogenous demand) to a customer orientation.

Demand can thus become endogenous in power system planning, operation and control, completing a (demand vs. supply) fully functional market, with both wholesale and retail competition performed with 2GRs in the value chain from generation to customers.That is another angle of what I been calling EWPC.

The statement is an error, and based on insufficient analysis. The correct statement is "In marketing gasoline, there is no way to avoid having points of distribution". There is simply no logic for extending that to a concept of "and the distribution entities must be different from the wholesale suppliers.", as you do.

How large is Shell's retail network? Shell has a network of 50000 retail stations, almost twice the number of McDonalds.

When Texaco merged with Chevron in 2001, Chevron Products Co. temporarily gave up rights to the Texaco retail brand as an antitrust stipulation, and gas was sold in the U.S. under the Texaco retail name by a competitor. In July 2004, Chevron regained non-exclusive rights to the Texaco retail brand and started selling gas under the Texaco name in the Southern and Eastern United States: Alabama, the District of Columbia, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Texas, Virginia and West Virginia. In July 2005, Chevron started selling gas under the Texaco retail name in a broader area, including many states in the Western United States. Chevron regains exclusive rights to the Texaco retail brand in July 2006.

In the UK ... The convenience, quality and superb service we offer is really appreciated by the millions of customers who use our BP Connect and BP Express stores every day. It’s the 4,500 people who work throughout the retail division who make sure our customers have this enjoyable shopping experience.

Have been thinking about this problem for some time. Two years ago, I presented a venture opportunity at Rice U. No one picked it up, but I contend is would be beneficial overall.

Does anyone know if Energy Pulse will accomdate an attached power point program. The powerpoint demonstration is a little over 2 minutes. It represents 24 hours of meter information in hourly segements. Of course the segements could be in tenths of an hour or six minutes.

I am still looking for a partner to field test 1000 residences, preferable in Texas.

Dale Steffes

All you have to do is to come up with the hypertext and post it, like we have been doing for articles (see next paragraph). The way I do it is to use a www.blogger.com, which has very simple 1-2-3 instructions to start. As you create a post, Blogger creates the hyperlink text automatically. You should color the link, to make the output readable.

I think you are the original author of the gasoline analog on energypulse article Providing consumers with better information must be the first step in building a 21st century US electricity infrastructure.

In the article you said “These price signals could be built around 15 minute intervals (or should mimic the market pricing dynamics of the relevant wholesale electricity market). If an electricity consumer wanted to lock-in these price signals with a forward purchase they could do this through the utility or the competing providers.” Meaning it was ok to purchase electricity from a regulated monopoly retailer or from a re-regulated competitive retailer.

This is a level of intrusiveness that I don't think will be appreciated by the average American.

How do you construe "empowering" consumers with the regulators' motivation of "changing their behavior?" This is Orwellian doubletalk, plain and simple. This is to empower regulators at the expense of customers!

We should not jump to conclusions as to what Dale has in mind.

Under EWPC the customer will developed a relationship with the competitive 2GR of his or her choice, based on prudential regulations, just as you probably do and have done with your banking retailer. Banks monitor each transaction you make with them. Are the banks intrusive with the money and credit references of the average American?

In the generative dialogue I suggest that prudential regulations should come from a global institution, so that the little guy is not taken for a ride. What do you suggest on this different and wider perspective?

As I see it, this solves a number of debated issues. It wouldn't inform your utility company of your every move unless they called for your individual info each second or minute. It allows the condition of the grid to call for changes in adjustment sizes ranging from very fine to very course. That would simply be a contrast of the price jump vs. each member's price sensitivity. That's a self tuning loop so it continually corrects for new factors.

If a generator, large or small, or a storage facility or even a shedable load could provide a large enough quantity at lower than the going rate, they could contract for a certain amount with the grid market manager. That would automatically drop the price.

Thanks if you are joining the generative dialogue on Electricity Without Price Controls (EWPC), otherwise hi anyway. I understand reality is a bit more complex than what you propose (see next paragraphs on the generative dialogue). However, in terms of intrusiveness, I get that you are proposing will reflect very closely what it will happen in most customer - retailer relationship, which is management by exception.

In earlier dialogues it became crystal clear that energy only markets without ultraquality transportation are unreliable at some point of another. In that respect, EWPC suggests that for demand to become endogenous, 2GRs should get involved in 5 distinct sets of activities, from long run system planning to short run real-time operation.

Prices should not be published before learning very closely what demand is. 2GRs should supply their demand estimates are at wholesale, in time and space, based on their contracts with customers and taking risks for deviations, just as generators will supply generation available. The result is sets of LMPs.

In addition, price formation on the grid is not just for the real-time market, where balancing transactions takes place. There is also day ahead markets and EWPC strongly suggests week ahead markets that become very useful when (Murphy comes in and) demand forecasting gets way off larger or when unforeseen large duration outages of large power plants occur in a given control area.

My old meter had a rotating disc. One revolution was one tenth of a kilowatt hour. As appliances switched on and off I could see the difference in the rate of rotation of the disk and I could reasily determine my rate of consumption of the product. My old meter also registered the total kilowatt hours consumed by means of 5 dials. Of course it did not have a facility for "time of use".

The new meter has a digital readout that does not display the rate just a number representing the total number of kilowatt hours I have used. That is a giant step backwards to me. Now I have no means of determining the effects of a particular item operating in my house.

The new meter which I am told I will be paying for in 2010 when "time of use" rates will save me bundles of money (I am laughing) has a second display which apparently will read the consumption based on the time I have used the electricity. Right now it flashes a row of 8's alternately with the kilowatt hours total which makes reading the darn thing incredibly annoying.

The cost of the new meter is estimated to be 3 to 4 dollars per month. Unless electricity provided on the "off" hours is free it will be impossible for me to recoup the difference based on my current consumption which is already very low. I am an avid conservation type and really do not use much.

To add insult to injury so to speak the meter will NOT be able to record any electricity that I generate and send back to the grid. A different meter will be required to do that. I am told that is "net metering" and this new meter is incapable of doing performing that function.

So sorry to curb the above enthusiasm but one thing smart meters definitely are NOT is smart....at least the one that I have now.

I think I am fast coming to the conclusion that it would be wise to install a diesel generator and disconnect from the grid altogether. At least when the electricity goes off I will know that it is entirely my fault. Maybe I could run it on biodiesel. Any one got any experience doing that. I think I am gonna need to talk to you.

Malcolm

If you're really interested in the off grid diesels, let me know as my father has done more research than should be possible on them. They may not be better in all aspects, but you've identified that some issues outweigh others.

Now THAT's more like a smart meter.

Smart choice?

Be the consumer and make your own decision which is not to have anything to do with all of the above. It is nothing but repeated confusion.