Another post added to AMI Services Solutions for Alberta's Deregulated Market.
I welcome the contribution of Nick to the generative dialogue, as follows: The privatization of metering services is a key technology for the “integrated” development of the resources of the demand side. “Integrated” is an added insight emerging from this dialogue. The only incentive for such development is a proper market architecture and design, to allow the development of innovative business designs. Please find four nearly one year old quotes on such designs.
With regards to incentives, under the article Energy Bill 2005 - A Waste of Time? “if true retail (and wholesale) competition is enabled, retail marketers will have the right incentives to develop innovative business designs, without the need for price controls, integrating real time metering, energy efficiency, and demand response. Again, I believe that is a vision leading to the End-State of the electric power industry.”
Under the article Strategic Perspectives on Utility Enterprise Solutions, I said: “… Bob Lieberman has given a new hope to residential real-time pricing based on the existence of a risk premium, part of which responsive customers can pocket. Bob adds that conventional wisdom regarding that real-time pricing of residential customers won’t work was proven wrong. Lieberman identifies 4 problems to be overcome develop the market: 1) Short term thinking; 2) Who's job is it?; 3) Overcoming the "DR is about protection system "mindset; and, 4) Explaining to customers what we are talking about and what's in it for them…By taking a close look to … all 4 problems can be addressed by competitive retail marketers, with innovative business designs under their own Retailers Enterprise Solutions. The result will be a new paradigm of the electricity industry for the new global economy, where increased efficiency will result. Every customer will be able to choose value added from electricity and the majority of customers will have lower prices, after a while.
Responding a letter of Jack Casazza, on the post some friendly comments on true electric deregulation, I said: “Jack’s assumption that there can be no product … differentiation is true under a deterministic world, but false on a probabilistic one. Every customer has a perceived supply security requirement … that minimizes his/her costs of electricity in the long run. By developing and applying demand response technology, an opportunity to develop new competing business designs innovations can be implemented to satisfy long run least cost power sector development and benefit from increases in scale … Actually, under systemic competitiveness that would change from least cost to maximum value added.”
On the post utilities vs retail-marketers on the purchase of communication ... I added the following, “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.”