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Geopolitical events like war in Iraq and weather patterns like unusually cold winters can spur fears of oil shortages, and thus lead to higher gas and electricity prices. Whether the oil shortage is real or contrived is anybody’s guess. The truth is, most of the time nobody knows why energy prices fluctuate. This is because energy utilities today have no reliable way of judging demand, and therefore cannot properly allocate supply. Why do energy prices soar on the back of a perceived shortage? One explanation is that the average electricity generators in the U.S. run at about 54 percent of capacity. In order for a power utility in Chicago, say, to keep generating capacity in reserve that will only be needed for eight hours during the hottest summer day of the year, then consumers must bear the price. Unfortunately, that price turns out to be nearly 600 times the average cost to cover the utility company’s cost for reserve generation. Today the grid that distributes power is not smart enough to look elsewhere for additional energy to meet unseen peak demands. Supply and demand in the energy industry still rely largely on the same rudimentary technology used since the 19th century: door to door meter readers. At best, a reader will have a laser gun so he can read meters without getting out of his car. When readers can’t access your meter, they make an estimate, which means actual demand lags a month or two behind billing estimates. As modern technology streams email, stock prices, and digital photos into our wireless hand-held devices, why do energy utilities still go door to door? Until recently, the cost and availability of technology to read meters or other devices remotely have been inhibitors to all but the largest industrial energy consumers. Now, thanks to low cost wireless devices and industry adoption of open standards, the game is changing. The ability to monitor energy assets remotely and in real time gives utilities a huge opportunity to improve their earnings performance by better matching supply with demand. Asset monitoring extends enterprise operations to embedded devices or smart machines and remote sensors. Energy usage data can be gathered, filtered and integrated into back-end applications, or communicated via alerts to designated personnel to take appropriate action. By proliferating this real-time digital technology, electric utilities would know when your lights go out, or better yet, when they are about to go out. Today when your lights go out, often the only way your local utility knows is if you call and tell them. With remote asset monitoring, crews could be dispatched in advance to provide preventive maintenance, improving customer service. As devices are added the energy grid becomes more “intelligent.” Ultimately, it would be self-monitoring, self-diagnostic, and even self-correcting to lessen the need for manual intervention. To be truly competitive, electricity markets require real-time price signals – and related technology – which will allow people to make choices. Consumers could opt to give up control of their thermostats in exchange for ensured lower energy prices. A utility could offer consumers the service of remotely reducing their air conditioning during the day when the home was empty. A pilot system called “GoodWatts^™” is being tested among 100 residential customers in the Philadelphia metropolitan area. GoodWatts allows a utility to remotely control air conditioning systems and other high load appliances over a secure network. As a result, the utility is able to reduce capacity requirements during some peak periods, or when wholesale rates warrant that other forms of capacity are more economically viable. Utilities benefit from real-time asset monitoring precisely because their improved ability to match demand with supply will avert supply disruptions. Utilities would amortize technology investments by reducing the need for the robust infrastructure they have today. Reduced volatility and risk in the energy market would lead gas and electricity prices to stabilize and trend downward, regardless of what happens on the nightly news. Another area where Information Technology intelligence could be applied is in the area of outage management. Outages are common in most utilities. A significant activity of utilities is maintaining their assets and recovering from outages when they occur. Many of today’s outage management processes are characterized by labor intensive, manual, voice-based processes. Since crews and customers are all using the phone or private networks to communicate outage status, there is a tremendous amount of manual information gathering and data entry required. Integration technology addresses integration needs around the processes used to support operations, manage and maintain assets, and provide customer service for a utility. For example, using an outage management system could help to decrease the time required to restore utility services when an outage occurs. It also improves communications to press, public officials and customers regarding the status of an outage and the expected recovery times. With Integration technology, like IBM’s for example, the energy and utilities marketplace has an effective way to redesign processes and integrate those processes with operational applications, data, remote user devices and physical assets. This integration environment will effectively add intelligence to distribution networks, in ways that will enable fact-based decision-making in real time.