‘Real-time meters’ zap fees

FREEZING TINY egg- and
spinach-stuffed quiches, Cliff Maupin
says, uses a lot of electricity. Maupin,
facilities manager at Nancy’s Specialty
Foods in Newark, joined a Pacific Gas &
Electric Co. pilot program in January to
more closely track his company’s
electricity costs. PG&E and other utility
companies call the service "real-time
metering." "It’s not exactly real-time,
but you’re able to see your energy bill the day after you use it
by logging on to a Web site," he said. "It’s a great help to see
how flipping a switch or changing a compressor at the plant can save you money."

By TOM ANDERSON and ALAN ZIBEL
BUSINESS WRITERS Oakland Tribune

The metering program is the first step in implementing what experts call "real-time pricing" — linking the
minute-by-minute wholesale price of electricity to the prices consumers pay.

Most users now pay the same price for electricity regardless of the time of day — even though electricity
used at times of high demand, such as hot summer afternoons, is often much more expensive.

Experts say exposing users to the true costs of peak-time electricity gives them a powerful incentive to
reduce demand at times when supply is the most constrained. That, in turn, diminishes the possibility of the
kind of power blackouts that swept across California last year.

"If we had had it in place, we would not have had an electricity crisis," said Severin Borenstein, director of
the University of California Energy Institute.

Closely held Nancy’s Specialty Foods makes frozen appetizers, such as petite quiches, mushroom turnovers
and crab cakes. The company uses two air compressors to flash-freeze the food, but the machines also hog
a lot of electricity.

Maupin said he checks a special PG&E Web site daily and tweaks the machines and other equipment at his
factory so they use less power. Out of the thousands dollars a month Nancy’s pays in energy bills, the
company has saved about 10 to 15 percent due to the metering program.

"We probably would get more savings out of the program if we had a full-time energy manager, but it
works for us," he said.

The California Energy Commission estimates the program will result in using 500 fewer megawatts
statewide this summer, which equals the output from an typical gas-fired power plant.

More than 6,000 PG&E business customers are taking part in real-time metering, said Sophia Ignacio, a
PG&E manager who runs the program.

"We are still studying the impact the program has on energy consumption," she said.

The service is free to midsize businesses. The energy commission has put up $35 million to fund the
real-time metering programs, which are offered by the state’s utility companies, including PG&E.

The program is targeted at shopping centers, big-box retailers and small manufacturers such as Nancy’s.
Most large manufacturers already have meters that put out real-time information.

Borenstein, who has long been an advocate of real-time pricing and has lobbied behind the scenes to make
it a reality, said real-time pricing has the potential to spark "huge" declines in demand at times of peak
usage.

That’s because it doesn’t take a large cut in statewide demand to dramatically reduce prices in the market,
he said. If 2,000 to 3,000 megawatts of demand is removed from the system, ample electricity supplies
would be available and energy producers wouldn’t be able to charge sky-high prices. A megawatt is enough
electricity to power about 750 California homes.

Advocates also believe real-time pricing would reduce the need to use polluting "peaker" power plants,
which are fired up at the times of highest demand.

While real-time meters started to be installed in California at midsized businesses last August, the state
Public Utilities Commission has not yet established a regulatory structure for real-time pricing. However,
PUC Commissioner Michael Peevey is working on designing a system that would allow it.

"We want more flexibility on the demand side because it will lower prices for everyone, and that’s good for
the environment," said Julie Fitch, a Peevey adviser.

The PUC is scheduled to hash out the issue by next summer.

Borenstein criticized PUC President Loretta Lynch for what he described as holding up progress on real-time
pricing, but said she has been more amenable to the idea in recent months.

Redwood City-based eMeter collects data from the advanced meters and sends it to utility customers, such
as Nancy’s Specialty Foods.

John Wambaugh, eMeter’s vice president of operations, said the state Energy Commission and his company
have set up the foundation for more advanced energy conservation efforts.

Funding for the real-time metering program expires next June. Wambaugh said the cost of the service,
which includes a $1,700 meter and a $30 monthly charge, might be rolled into the energy bills of
businesses in the program.

"Next year it will be interesting to see how the state and PG&E want to move forward with real-time
metering," he said. "There are a lot of ways to go."

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