VALUE-ADDED ENERGY SERVICES: 

A BOON TO MANUFACTURERS



Technological advances, coupled with greater competition in the 

telecommunications and electric power markets, have prompted electric 

utilities to broaden the array of value-added services they provide.



By Danialle L. Weaver

    Manufacturers and industrial energy users, who account for $47 

billion in utility revenues, can avail themselves of a wide range of 

value-added services now being offered by electric utilities. Chief 

among the new services is two-way metering, an interactive tool that 

allows industrial customers to manage their energy consumption on a 

real-time basis, thus reducing, energy costs. 

    Electric utilities already have established extensive microwave and 

fiberoptic networks for communications between plants and substations, 

but about 98 percent of those networks are untapped, according to a 

recent estimate by the Edison Electric Institute. Using switched, 

two-way broadband telecommunications networks coupled with personal 

computers, utilities can offer industrial customers the ability to 

manage their energy consumption and reduce energy costs. 

    By reading meters electronically and in real time, and by offering 

customers monetary incentives, utilities can raise their own ratio of 

sales to potential output. This, in turn, allows them to implement 

flexible pricing strategies and provide higher-quality services to all 

customers, explains Washington, D.C.-based telecommunications lawyer 

Steven Rivkin. 

    The market for automated meter reading is expanding rapidly. In 

1994, there were approximately 3.5 million electric, water, or gas 

automatic metering units installed across the United States. By the end 

of 1998, analysts predict that the figure will grow to more than 12.5 

million installed units, which represents an increase of more than 300 

percent.







ENERLINK

    Currently, about 40 of the nation's electric utilities offer 

EnerLink, an energy management tool allowing large energy users to 

monitor energy usage in multisite locations, in multiple locations 

within a facility, or for a particular piece of equipment. Equipped 

with the software, a PC, and a modem, customers can calculate "what if' 

analyses using actual demand and energy figures.

    In areas with real-time pricing, utilities use EnerLink to send 

industrial customers electronic mail messages containing real-time 

pricing information on a day-ahead or hour-ahead basis. EnerLink allows 

customers to graph energy use against customer base load, calculating 

the dollar amount associated with exceeding contracted load levels or 

of credits established for keeping demand below established thresholds. 

    EnerLink was created by a subsidiary of The Southern Company in 

Atlanta for an industrial-gas customer considering building a new 

facility in a competitor's service territory. To help make its 

decision, the company needed data on existing and future load patterns 

and electricity prices over a year's time. EnerLink allowed the company 

to simulate the expansion and the resulting electricity costs. 

    Another customer, a 5,200-mile petroleum-products pipeline 

operator, used EnerLink to track and manage energy consumption, 

forecast bills, take advantage of lower-priced off-peak power, deal 

more effectively with a multitude of utility vendors, and find new 

efficiencies in operations. The list of utilities offering EnerLink 

includes Boston Edison Co., Constellation Energy, Duke Power Co., 

Oklahoma Gas & Electric Co., Portland General Electric Co., Consumers 

Power Co., and Public Service Co. of Colorado.







CELLNET 

    Kansas City Power & Light (KCPL) and Union Electric Co. is now in 

the process of installing another such system that offers industrial 

customers the ability to select the dates that electric bills are 

issued, thus allowing, manufacturers and industrial energy users to 

bring revenues in faster, reduce bad debt, and improve cash flows. That 

system is offered by CellNet Data Systems, San Carlos, Calif., and is 

currently being installed on industrial meters in the service 

territories of both KCPL and Union Electric. Other utilities using 

CellNet systems include Pacific Gas & Electric, Georgia Power Co., and 

Northern States Power. 

    CellNet's network uses cellular radio and computer database 

technology to transmit data from meters directly to KCPL:s and Union 

Electric's information systems centers. It is retrofitted on existing 

meters, and offers customers the ability

to capitalize on time-of-use pricing or other flexible rate structures. 

CellNet's network also allows customers access to their usage data 

through the Internet, if they wish.







SOURCECOM 

    A third type of two-way metering technology being offered directly 

to energy end users nationwide is called SourceCom, which is of 

interest to smaller industrial customers with multiple site locations. 

SourceCom, introduced in January, is being marketed nationwide by 

Illinova Power Marketing, Utility Network Services Company, and North 

American Energy Services Co. SourceCom is designed to reduce the cost 

of all utility services such as electricity, gas, water, sewage, and 

waste disposal. Dollars saved by reducing waste can be used to retrofit 

existing equipment with additional energy-saving devices. 

    SourceCom also offers clients a way to select their own service 

providers for electricity and gas as the utility industry is 

restructured. The technology allows companies with multiplant sites, 

such as refineries or plastics manufacturers with different energy 

inputs, to pay one electric bill for all their operations. 

    One component of the SourceCom system, called total resource 

conservation management, outlines opportunities to facilitate 

operations, reduce consumption, and save money. The goal of this 

component is a 10 percent overall decrease in the use of electricity, 

natural gas, fuel oil, and water as well as a reduction in solid-waste 

generation.

    Other two-way wireless applications geared toward industrial 

customers are being explored by Centerior Energy, Constellation Energy 

(the result of the merger between Baltimore Gas & Electric and Potomac 

Electric Power Co.), Detroit Edison, Duquesne Light, and Allegheny 

Power.







NEW APPLICATIONS

    Earlier this year, the Electric Power Research Institute set up a 

new information systems and telecommunications business unit to help 

utilities expand their interactive communications offerings. Many of 

the new applications are just now emerging, notes Steve Drenker, who 

heads the EPRI unit. Some of those potential new wireless or 

fiberoptic-based services of interest to industrial customers will 

include the ability to:



* Stay in touch with sales forces in the field, allowing them to check 

inventories remotely, provide product information to potential 

customers, and place orders from the field



* Collaborate with design teams located anywhere in the world on 

complex projects *Prototype component parts using rapid prototyping 

technologies



* Gather bids for new products from companies located anywhere in the 

world



* Settle financial transactions quickly, in real time 



    Manufacturers and industrial energy users can benefit greatly from 

the plethora of value-added services currently or soon to be available 

to them.







FOR ADDITIONAL INFORMATION PLEASE CONTACT:

AREA DEVELOPMENT AT (800)735-2732