ANALYSYS: Power to the People
By Bob Lewis
I recently discovered that my hometown (Louisville, Ky.) power utility has moved to the forefront in the world of e-commerce. LG&E Energy Corp. recently formed LG&E Retail Access Services (RAS) in order to take advantage of new business opportunities created by the deregulation of the electric industry.
To find out more about this new venture, I was directed to Diane Rihn, the manager of business operations for RAS. She described the current state of deregulation in the energy industry. "The electric industry is deregulating much in the same way that the telecommunications industry deregulated to allow competition. So, just as you can get your long distance from AT&T, MCI, Sprint and a myriad of others, you’ll soon be able to buy your electricity from the supplier of your choice."
Deregulation is happening on a state-by-state basis, most notably in California, Pennsylvania and New York. Kentucky has not yet deregulated but this initiative will eventually go nationwide. The whole concept behind the forming of RAS was to offer new players that want to compete in the deregulated world as an alternative energy supplier, a ‘one stop’ shopping for virtually everything needed for a startup operation.
Rihn described some of the components of their back-office utility offering. "RAS will purchase the electric meters, install the meters, read the meters, forecast electric demand, schedule and deliver the electricity, and bill the end-use electric customer." To her knowledge, RAS is the only provider of this type of service in the U.S. When she started to explain the size of their operation in California -- 1700 commercial meters -- I was curious how it could be profitable doing business 2,000 miles distant.
Then the e-commerce side of this story emerged with ‘Smart meters’. Each remote electric meter contains a modem, and is set up to call an 800 phone number every hour and transmit data relative to the amount of electricity consumed during the preceding 60 minutes. This unique feature is only one part of the program that makes the RAS operation a success. In addition to using the latest recording technology, RAS is heavily dependent on the Internet to provide many of their other offerings.
Rihn described some of the WWW tools a typical Energy Manager in California has available for their use: hourly electric usage, Web invoicing, on-line local weather conditions, forecasted usage and up-to-date usage for the current billing period, as well as an ‘ad-hoc’ reporting package.
On a personal note, Rihn informed me that she was an IT manager with LG&E for the past 13 years, and was responsible for the development of all of the current RAS systems. Two months ago she transferred out of IT, to become the RAS Business Operations Manager. Her final comment was, "In short, I’m IT’s worst nightmare, when one of their own becomes the user."
A quick look at the RAS chart shows a very ‘neat’ example of the successful e-commerce marriage of Internet, Client Server, and the mainframe. You can visit the RAS Web site at https://www.lgeras.com. This is a secured site so you won’t get much further, but you’ll see more by selecting the button that says "Tell me more about RAS!"
Bob Lewis is VP of IT at the FoodService Purchasing Cooperative Inc. (Louisville, Ky.). He can be reached at email@example.com.