Energy Biz - September/October 2008 - (Page 39) Vendors and utilities will have to determine product specifications based on population density, terrain and the type of information that needs to be transmitted. The numbers are staggering: 2.3 million units for San Diego Gas & Electric; 5 million for Southern California Edison; 10 million for Pacific Gas & Electric, and that’s just in one state. Granted, that’s the nation’s largest, California, but that still represents a fraction of the potential U.S. market. California is an important state given the size of the planned deployments of the three IOUs there. Accordingly, California tends to receive the lion’s share of market attention. However, in terms of advanced metering penetration, smart metering programs are well-advanced in a number of less-publicized states, with penetration rates in the range of 50 percent in states such as Pennsylvania and Wisconsin, according to Will McNamara, principal consultant at KEMA. “There is some concern among the utilities if the vendors will be able to follow through with orders as utilities scale up their deployments And when you take into consideration the use of subcontractors, some of which are located outside the United States, that will be needed to help meet these orders, the quality of the functionality or the actual unit components is also a concern,” says McNamara. KEMA estimates that the average unit cost for the equipment is about $200 per meter. The metering equipment and installation costs are around 60 percent of the total costs. But what if utilities and regulators see the initial results and begin ordering rollouts simultaneously, creating a stampede in 2010 or so when demand far exceeds manufacturers’ ability to supply these units? In preparation, both utilities and vendors report that they have worked together to secure a place in the queue to anticipate that demand, perhaps smoothing out these anticipated rough patches. With capital costs of $400 million, timing and supply are imperatives, even if all the specifications are not completely decided yet. “We have been issuing RFPs (requests for proposals) to lock in supplies. We believe it’s a little early but in two or three years there could be concerns about availability,” says BG&E’s Harbaugh. A leading manufacturer says it saw this demand coming. Greg Myers, Itron’s director of product marketing, says, “We’re very much prepared for the ramp up in production in the United States, which we’ve raised to 6 million units a year.” Itron says it was able to increase capacity from 3.5 million units in a six-month time frame. WHATEVER CONSUMER BILL PAYMENTS WILL LOOK LIKE TOMORROW, YOU CAN BET WESTERN UNION IS WORKING ON IT TODAY. The history of consumer bill payments is driven by technology. Vision. Innovation. And Western Union. By staying ahead of change, we help our clients manage change. By creating innovative, customized solutions for individual electronic payment needs, we help them stay on the leading edge. The result? Increased efficiency. Improved cash flow. Reduced costs. Better ROI. May we design a solution for you? Call Western Union. We’ll get on it today. Contact a payments expert today. New Online Banking IVR Desktop Internet EBPP Outbound Messaging Call Center Solutions Walk-in © 2008 WESTERN UNION HOLDINGS, INC. ALL RIGHTS RESERVED. 29725 WU PayServ_3.5x9.75_EB_Sept-Oct_FNL.indd 1 www.energycentral.com E n E rgyB i z 8/15/08 3:22:59 PM 39 http://www.energycentral.com
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