If you were to write a play about the restructured electric-power industry, something along the lines of Shakespeare's “Hamlet” with each segment of the business represented by a character, you'd have a study in contrasts. Seated between the high-profile figures of the daring generation company (genco) and the upstart energy service provider (ESP), you'd find a rather unassuming character: the distribution company or “disco.” The responsibility of a disco is enormous — it ensures reliable movement of electric power from high-voltage transmission lines to end users. But the firms that serve this segment of the industry suffer from an acute lack of stage presence. What disco's do just doesn't capture the public's attention, for better or worse, the same way that gencos, wholesale traders and ESPs do.

When Massachusetts passed its deregulation legislation in November 1997, the state Department of Public Utilities — renamed under the act as the Department of Telecommunications and Energy (DTE) — encouraged discos to divest their generation assets and focus on their pole and wire business.

National Grid USA (Westborough, Massachusetts, U.S.) took this to heart and decided to operate solely as a distribution company. As a disco, the company is required to maintain a Standard Offer Service for a seven-year transition period with a mandated average rate cut of 10%. National Grid also is obligated to serve those customers whose retail energy provider defaults on service, as well as any customers not yet in the market at the end of the transition period.

Admittedly, this sounds more like housekeeping for the deregulated market than a charter for a newly reformed business. But rather than be a passive player in the restructured market, National Grid wanted to explore new ways to make an impact on the market, improve customer service and uncover new sources of revenue. This objective led National Grid to “think outside the box” of a generic disco. Ultimately, the company began offering value-added energy-information services to customers and suppliers over the Internet.

A Little History

National Grid USA is a wholly owned subsidiary of The National Grid Group, a global U.K.-based company that is a world leader in the management of electricity-delivery systems and the development of telecommunications networks. National Grid USA provides electricity-delivery service to approximately 1.7 million customers in Massachusetts, Rhode Island and New Hampshire through four distribution companies, including Massachusetts Electric.

Unlike California, discos in Massachusetts still retain their monopoly on the meter billing information system (MBIS), and so retain control over the flow of energy-usage information from end-customers' meters. National Grid recognized the inherent value in that data but also realized that in its raw form, it was just data. For an energy customer or supplier to make any real use of it, he or she had to request the data, wait for it to arrive via e-mail or on diskette, and then bring it into some analytical framework. The process was cumbersome and essentially ruled out the possibility of doing iterative analyses or anything remotely close to the realm of real-time analysis.

The solution was to make usage data available online and to couple it with a selection of ready-made analysis tools that a user could employ quickly and easily without having to install any additional software on his or her PC.

National Grid selected Energy Profiler Online (EPO) from ABB (Zurich, Switzerland), which offered several advantages. First, the software provides key analytic features — average load profiles, usage history charts, summary statistics — but doesn't overwhelm the user with a lot of extra features. Second, users can perform any of the analyses on any number of accounts, or aggregation of accounts, for any time period for which data is available. The user-defined groups are saved so they can be accessed again and again.

In order to charge for this service, however, National Grid had to submit a tariff filing with the Massachusetts DTE. Massachusetts took a consensus approach to the pricing of disco services, so the process was like any such filing under a regulated system — we justified our cost figures to DTE and proposed a reasonable profit margin. The tariff filing took more than a year to be approved, but the effort was well worth it.

How It Works

Customers with demand greater than 200 kW — who already have interval meter devices installed — can sign up for the online service and get immediate access to their data as well as a variety of reports they can customize to fit their needs. Customers with demand less than 200 kW can buy a meter with financing from National Grid and, once it's installed, sign up for the service. Data are normally refreshed monthly when customers' meters are read, but those with interval meters whom wish their data be refreshed more frequently have the option to purchase enhanced metering that is interrogated via modem.

The database that houses customer meter data is very secure (Fig. 1). The database itself is not even physically connected to the Internet and is protected by a variety of security measures, including Secure Sockets Layer (SSL) technology, dual firewalls and reverse-proxy servers. Customers log in using a unique ID and password, which ensures they can access only their own data. Users choose from several analytical tools — average load profiles (Fig. 2), usage history charts, summary statistics — and can define a specific date range and account from which to generate the report. The service also allows customers to aggregate accounts together into user-defined groups, so, for example, a chain store energy manager can see information for all of his or her stores in a given region added together.

System Rollout

We decided that in rolling the service out to customers, the way to convey its value was to first “sell” it to account managers. So, National Grid trained each and every one on using EPO. That experience allowed the account managers to then go to their customers and show them specifically how the service could help them. Some of National Grid's districts have since chosen to promote EPO with direct-marketing campaigns, but for the most part, the grassroots approach of account managers presenting the service to their customers has met with good results.

Feedback from account managers and customers alike has been very positive. Users appreciate the simplicity of the service, which allows them to log on, get the information they need and log off in a matter of minutes.

Customers with access to energy-usage information become better educated about how their organization uses energy and are able to apply that understanding in dealing with suppliers. Similarly, energy providers can use the data EPO provides to structure pricing offers that address specific customers' needs. Additionally, customers who participate in load-curtailment programs, demand-side bidding and conservation efforts need the information EPO provides to take advantage of these programs and to evaluate the results. By implementing this service, National Grid is helping to link the energy-supply chain together with information.

Future Possibilities

If one thing has been made clear by National Grid's experience in offering energy information services online, it is that distribution companies would be well served to look beyond their base charter in considering how to position their companies. Proactive discos have an opportunity to provide value-added services that will increase revenues, while at the same time expand the relationship they have with customers. National Grid encourages managers at distribution companies in other restructuring markets to consider playing an active role in enabling the competitive energy market by providing energy information services.

Roberta Laccetti, manager of load-data services, is responsible for National Grid USA's supplier load-estimation process, the collection, management and reporting of load data from customer meters, and the statistical sampling and analysis used to develop class load profiles. She has more than 20 years experience in the energy industry, specializing in load research, rate design and data management.

Elizabeth Hicks is currently the director of market research and planning in the product development group at National Grid USA. Her experience includes more than 20 years of analysis, design and evaluation of conservation and load-management programs, as well as the development and implementation of new products and services.