Utilities vs Retail-Marketers on the Purchase of Communication Technology

I added a comment to the EnergyPulse article Beware of Standards that Speak with Forked Tongue Considerations and caveats for purchasing communications technology, tha says:

Keith Martin, President & CTO, Tantalus Systems Corp., tell us about “the big confusion for those considering purchasing a system comes at junctures when the dominant standard has yet to be declared victorious.” The solution to the confusion is to be found by planning for the welfare of the whole system, based on a clear vision of the future. Such a vision will lead eventually to retail marketing of electricity, without price controls, as transaction costs become negligible.

There will be no utility, but several competitive retail marketers, making it simpler “how to apply the wisdom related to standards to today’s technology choices.” The decision of a competitor is much different from that of a monopoly. The competitor decision is one of life and death, while the monopoly error many times is paid by the customer.

Late professor Fred C. Schweppe recommended on the book “Spot Pricing of Electricity,” that customer’s choice should be centered on price-reliability, and not on price alone. Retail-marketers are better positioned than utilities to perform retail marketing. By letting retail-marketers (not utilities) purchase an AMI system to develop their business designs, under a set of minimum standards, much of the confusion goes away. Eventually winning standards will arrive for each market segment. In a sense the purchasing decision becomes part of the relevant winning business designs models.

In synthesis, the big question posed by Mr. Martin then becomes: How can a retail-marketer negotiate its way through a minefield of options and select devices and methods and technology standards that will meet its long-term needs? My simple answer: by innovating to develop a winning business design for its market segment.

To complement the underlying ideas behind my proposal, please look at other comments about true deregulation, based on the welfare of the whole system, under the following EnergyPulse articles:

“The Business Case for Demand Response”

“An Alternative Business Case for Demand Response”

Why We're Selling Advanced Metering All Wrong... And How to Sell It Right

"2006: New Challenges and Opportunities in the Brazilian Electric Energy Arena"

“Energy Bill 2005 – A Waste of Time?”

"Strategic Perspectives on Utility Enterprise Solutions."

“Free All Wisconsin Utilities to Make Money Helping Customers Save Energy”

“A Few More Unfriendly Comments on Electric Deregulation”