Plugging Gaps in Power Use

IT taps new data tools to cope with deregulation

New planning, measurement and analysis software is giving the electric utilities industry a beacon of hope for dealing with energy deregulation.

New products from Lodestar Corp., Enermetrix and Henwood Energy Services Inc. are providing IT managers at utilities and corporations with tools to deal with shifts in energy markets.

While promising to bring more efficiency to the markets, deregulation has created an upheaval that is forcing electricity generators and distributors to try new ways of doing business. It has also forced IT managers generally to plan for unexpected power outages that can sap the strength from their e-businesses.

And with half the states in the country having passed energy deregulation laws, IT departments in all types of businesses are looking for better ways to manage the data related to their electricity purchases and use.

Some utilities are turning to companies such as Lodestar and Enermetrix, which offer energy management software for the retail and wholesale industries.

Lodestar last week unveiled its Transaction Management Hub, which is designed to meet the energy transaction and load management needs of ISOs (independent service operators), RTOs (regional transmission operators) and energy providers. The hub enables customers to configure their own business rules that involve the input and output of complex pricing, financial and energy consumption data, according to officials at Lodestar, in Peabody, Mass.

Shell Energy, a 2-year-old startup and affiliate of Shell Oil Co., is offering natural gas and electricity to deregulated marketplaces. Currently operating in Georgia and Ohio, the company has plans to expand across the United States, according to Shell Energy CIO Tim Byers.

Byers implemented Lodestars BillingExpert, part of the developers Customer Choice Suite for Retail Companies, to help facilitate billing and load monitoring. The software also lets Byers integrate his supply, forecasting, billing and financial management applications.

However, Byers didnt start out with that plan.

"We were originally paying a consultant money to build out a unique package," said Byers, in Houston. "It was a little naive on our part to imagine that we could build a complete package. We realized pretty quickly that wasnt the way to go."

Byers chose the Lodestar software because of its rate language and because its metadata model allowed for relatively easy reconfiguration in price plans and table structures.

"When you go into a state with different rules and regulations, you may very well have to make changes to the underlying structure," he said.

In addition to its packaged software, Enermetrix operates an online exchange where ISOs, RTOs and other energy traders can buy and sell electricity and natural gas.

John Zbihley, president of OnDemand Energy Solutions Inc., an energy management services provider based in Pittsburgh, is a big proponent of Enermetrixs namesake transaction management software and trading network. OnDemands customers are midsize and large businesses that spend $100,000 or more on energy annually.

In the past three years, Zbihleys business has grown almost 10 percent, to more than $100 million in energy transactions.

"There is no way we couldve completed those types of transactions in a manual way," Zbihley said. "You need a network, and you need software to get it done."

For those utilities still planning for deregulation, Henwood, of Sacramento, Calif., sells deregulation simulation software. The company late last month announced a partnership with Hymet Inc. to offer weekly hydroelectric forecasts for the volatile electricity market in the Northwest.

Houston-based Conoco Inc. uses Henwoods workstation software to set up market scenarios and simulate a certain models impact on the market.

"Under deregulation, there is all this focus on RTOs, and depending on the structure of those, there will be implications on how power flows," said Stephanie Russares, manager of power market analysis at Conoco. "This model will allow you to simulate those impacts."

Managing the flow of electricity is not just for utilities anymore. For companies that are fairly adept at managing risk, Gerald Keenar, a consultant at PricewaterhouseCoopers, in Chicago, suggested they look into real-time metering and control of their facilities to figure out where to reduce energy demand.

Keenar also suggested that companies look at opportunities to sell power back into the market—an option that is available only in deregulated markets.

Select Energy Inc., in Berlin, Conn., which uses Lodestars billing, load management and settlement applications, is itself a provider of energy management software that allows customers to monitor their energy use in real time.

Jim Grace, manager of information operations at Select Energy, said he is able to bundle some of Lodestars efficiencies—the ability to price hourly or subhourly consumption—and pass on that information to his customers.

Select also uses Lodestar to price commodities that are directly linked to the wholesale marketplace.

"So our customers might buy a block [of electricity] from us, and anything above that they would buy on the open market," Grace said. "This offers flexibility to get a better price."