By Michael Valenti

The national energy policy act of 1990 removed many government regulations affecting the power industry, fostering a competitive business environment similar to that in other industries. With annual utility revenues of $300 billion as the prize, a new breed of service company is using expertise in high-tech communications to help utilities cut costs, differentiate their products, and offer more revenue-generating opportunities.

Seattle-based ConnexT is an example of this kind of company. In 1993, ConnexT president and CEO Maura O'Neill approached McCaw Communications (now AT&T Wireless), a leading wireless-communications company based in Kirkland, Wash., to start a joint venture with an electric utility to develop a wireless information highway to homes and businesses, combining state-of-the-art communications, software, and computing technologies.

O'Neill reasoned that this highway would enable the utility to run its business more efficiently and provide retail customers with pricing options for more economical energy consumption. Puget Power in Bellevue, Wash., joined ConnexT as the majority shareholder in 1995. Since then, several utilities have hired ConnexT's services, including Duke Power Co. in Charlotte, N.C.; Carolina Power & Light in Raleigh, N.C.; Pacific Gas & Electric in San Francisco; and Alberta Power Ltd. in Edmonton.

"The deregulation of the utility industry is analogous to the deregulation of the telephone industry," O'Neill said, "when the breakup of AT&T sparked aggressive competition among a host of technology-driven long-distance providers and a flow of new products from the local-telephone-service providers." A one-time environmental analyst, O'Neill served as an assistant director of energy for former New York City Mayor Ed Koch before forming her own management company, O'Neill & Co., in 1982.

Many utilities want to develop innovative services but lack the time, expertise, or capital to do so. O'Neill and her colleagues at ConnexT conducted extensive customer and market research to identify the communication tools needed to provide these services, then deployed software and computer technology to develop them.

ConnexT provides three types of services that enable utilities to reduce their back-office and field-operation costs as well as defer significant capital investment by optimizing electrical distribution. The first set of services, called MeterManager, is based on automating meter reading to perform automated reads, on-request reads, outage reporting, tamper detection, logical disconnect, and load surveys. The advantage of superior metering accuracy is then passed along to retail customers in the form of new pricing options. Retail customers can select the billing and payment schedules that best suit their respective cash flows.

MeterManager is implemented by installing a variety of electronic devices that measure electrical input into commercial and residential meters. These devices can be embedded during meter manufacturing or retrofitted in standing meters. The devices are made by a unit of Schlumberger in Norcross, Ga.; Itron Inc. in Spokane, Wash.; and CellNet Data Systems in San Carlos, Calif.

Utilities can pass along improved customer services—such as new pricing options—under ConnexT's MeterManager program by installing a variety of electronic devices in commercial and residential meters. Retail customers can select billing and payment schedules that meet their needs.

ConnexT designs the software used in MeterManager and the interfaces within the network. MeterManager is connected to ConnexT via wireless, cellular, satellite, or telephone links as needed.

An early installation of this service was a 15,000-meter automated network for Puget Power customers in Olympia, Wash. "Since installation in January 1997, we have identified bad meter reads and identified persons who stole electricity by tampering with their meters," O'Neill said. "We can also provide actual final meter reads when people move in or out of homes, rather than estimating their use."

The second set of services provided by ConnexT uses sophisticated software tools and wireless communications to provide outage management, a facility distribution database, and automated electrical-plat design. The TELLUS software, for example, was designed by Zarko Sumic, an electrical engineer and vice president of technology development at ConnexT, to determine the likely cause and location of a power outage. For a storm causing multiple outages, TELLUS can estimate the cause of these outages 20 times more accurately than traditional methodsÑsending out work crews to examine miles of power lines for a break, tracking telephone complaints about lack of service, or examining where meter reads overlap. "TELLUS can speed outage repairs by hours or even days," O'Neill said.

The key to the new technology's performance is fuzzy logic, which combines the inexactness or fuzziness of actual occurrences with mathematical gradients to permit engineers to use computers more effectively in predicting the events that cause outages. In power-distribution systems, this fuzziness takes the form of the location and cause of system outages, which can be very elusive, particularly in the case of multiple power outages.

"We have a product that can not only help locate a downed tree over a power line but also help coordinate the dispatch of repair crews in order to restore power to customers faster than ever before," Sumic said. "The more severe the storm, the better the product works."

In addition to its outage capabilities, TELLUS can be used in construction applications by virtue of its geographic-information-system (GIS) technology. The GIS maps a utility's distribution system; stores the information in an open database from San Francisco-based Oracle; applies advanced applications to the data; and provides the necessary information concerning client engineering, operation, and design needs. This can significantly reduce the cost of new electric and gas hookups as well as the capital investments in distribution systems.

Pennsylvania Power & Light in Allentown, for example, installed TELLUS software in December 1995 to assist its engineers in selecting the shortest cable routes as well as the optimal transformer and service sizes in an underground residential design. According to the company, TELLUS cut design time by 90 percent and construction costs by 6 to 18 percent.

Chelan County Power in Washington is using TELLUS to eliminate time-consuming paper mapping, reduce customer response time, and cut costs. The new software has also helped engineers at South Carolina Electric & Gas Co. in Columbia reduce the cost of underground utility construction for residential developments by up to 10 percent.

ConsumerLink, the third set of ConnexT services, encompasses customer information systems, bill calculation, statement printing and mailing, and cash processing functions without the considerable investment required by new computer equipment. "We are currently developing the hardware and software for ConsumerLink with Netscape in Mountain View, Calif., and hope to launch it before the end of the year," O'Neill said.

In addition to retrofitting standing electrical meters for utility clients, ConnexT can imbed monitoring devices during the meter-manufacturing process.

Among the services utility customers can subscribe to through CustomerLink is OutAlert, which notifies customers by telephone or pager when a utility outage occurs at either their workplaces or residences. This option is particularly attractive for people who own a second home or are concerned for elderly parents, as well as for commercial customers who are not on the premises 24 hours a day. ConnexT staff are working on an improved version of OutAlert that will notify the customer of the predicted time to restoration.

UseAlert subscribers are notified by mail, telephone, or other means if their utility consumption exceeds a specified level, based on meter information collected daily. This capability helps commercial customers manage their electrical-demand charges and determine whether there are water leaks in systems such as boiler feedwater or process water streams.

The UseWatch service involves using frequently collected meter readings to develop detailed load profiles that help customers understand and control their own electrical use. For large, commercial, process-sensitive customers such as pulp and paper mills or petroleum refineries, real-time access to their own meters can be provided.

OneBill is designed for utility customers with multiple locations that increase electrical costs and make it difficult to extract meaningful management data. This service consolidates the bills from each location into a single bill that is presented to the customer, electronically pays the utility, and provides electronic management data.

Utilities will also be able to earn entirely new revenue streams from services unrelated to their base product by partnering with ConnexT to sell security and hazard monitoring, inventory monitoring, and other services to retail customers on a subscription basis. The first example of this will be HomeGuard, a home security network of 15,000 homes that ConnexT will acquire from Puget Sound Energy.

The next step for ConnexT is marketing the company's expertise to potential clients in Europe and Asia, where power providers are following the American example by privatizing and deregulating. "When the electric and gas utilities break up in any country, all sorts of business opportunities present themselves," O'Neill said. "We can help both power suppliers and consumers reinvent themselves to take advantage of those opportunities."


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