Puget Sound Energy to test real-time energy pricing

Washington state�s energy market is not yet deregulated, but Puget Sound Energy already has committed to providing real-time pricing information to some customers, under a new program. Beginning this winter customers will be able to compare bills based on fixed rates vs. market prices. By next year, the utility will be able to offer real-time pricing to those who want it.


Sylvie Dale
Electric Light & Power Online

TAMPA�Washington state�s energy market is not yet deregulated, but Puget Sound Energy already has committed to providing real-time pricing information to some customers, under a new program to begin Nov. 1.

Having laid the groundwork for a wireless automated meter reading (AMR) system, Puget Sound Energy and Schlumberger RMS, a unit of Schlumberger Ltd., will investigate public interest in having access to electricity prices on a real-time basis. If they get the expected response from bill mailers, 400,000 customers could get real-time pricing information. The pilot program will reach all types of customers from industrial to residential.

�For all of the ballyhoo that went around on deregulation and how much choice customers were going to have, there is really today very little customer choice going on in this business,� said Gary Swofford, vice-president and chief operating officer for Puget Sound Energy. He was an opening session speaker Wednesday at the AMRA conference.

�We�re seeing very few customers who are actually changing. The reasons are clear; there�s very little to choose from so far.�

To make rational choices, customers need to be exposed to real-time prices before they use the energy, Swofford said. He defined real-time pricing as �knowing what you�re using at any given point in time and having the opportunity to be able to manage that usage.�

Beginning in November, the utility will start stuffing bills for 400,000 of its 1.2 million customers with an insert that shows the economic impact of each household�s energy use at different times during the day, and begin familiarizing customers with dynamic pricing.

Swofford said this winter customers will be able to compare bills based on fixed rates vs. market prices. By next year, the utility can offer real-time pricing to those who want it, he said. Utilities hope these systems eventually will help reduce the need for peak generation or they can get premium prices for it.

During the past 2 years, Puget Sound Energy, the state's largest utility, has invested in the Schlumberger data acquisition network, a customer information system, and a customer service center to get the pilot project up and running. The utility�s customer information system was operational April 1, and the call center has been open for a year.

�We�ll have by the end of November, 1 million gas and electric meters converted to automatic meter reading." Swofford said.

The company has already begun to reap a pay back from investment in the technology. It has helped reduce power restoration times by 30% in the areas where the new AMR systems have been installed, Swofford said.

Because the system is scalable, Puget Sound Energy hopes to earn a return on its investment by marketing services to small utilities, including use wireless meter reading, the call center, web-based customer services, automatic outage management, billing services, and payment processing.

"Just last week, we signed up our first water municipality on that same fixed network. We�ve got about another half a dozen water systems we�re talking to right now,� Swofford said.

Looking ahead, Puget Sound Energy hopes to position itself as an attractive choice for energy and other information services by embracing deregulation before it happens.

�Deregulation is a genie that�s out of the bottle, Swofford said. "We�re not going to put it back in. It is going to grow. It�s going to take some more time and other states are going to learn from what�s happening in places like California.�

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