WSJ -- Dallas Utility to Install 3 Million 'Smart' Meters ...............................................
May 27, 2008
Dallas Utility to Install 3 Million 'Smart' Meters
By REBECCA SMITH
Landis+Gyr Holdings Pty Ltd., an international utility-meter company, is expected to announce Tuesday a $360 million deal to furnish Dallas utility Oncor Electric Delivery Co. with "smart" meters for three million homes and small businesses.
The meters are part of an important trend to help consumers control electricity use and to help utilities cut operating costs and improve electric-system reliability. Texas has seen some of the sharpest electricity price increases in the U.S., and the meters have the potential to curb costs by giving retail suppliers new pricing options.
Among other features, the meters will send readings wirelessly, giving consumers and suppliers very detailed information on electricity use.
"What seems pretty clear, as people try to make better use of electricity and water, is that the old monthly meter reading won't cut it anymore," said Howard Scott, managing director of the Scott Report, a publication that covers the advanced-meter industry and is a unit of Cognyst Advisors LLC. It doesn't invest in any of the companies it covers.
Though the contract is big, it is likely that even bigger ones are coming as the nation's utilities and regulators search for ways to cut "peak" energy use, which plays an especially large role in pushing up energy costs. The biggest California utilities are making meter selections currently.
In a recent analysis by Deutsche Bank, researchers said 50 million old-fashioned meters in the U.S. are likely to be replaced by advanced meters by 2010, at a cost of about $18 billion.
The contract with Oncor, a unit of Energy Future Holdings Corp., caps an effort by closely held Landis to build a meter and communications company offering different types of meter technology. Landis, based in Zug, Switzerland, has been acquiring smaller meter and communications companies since 2002, investing $1.2 billion in more than a dozen companies. In the U.S., it recently acquired CellNet, one of the biggest vendors.
Cameron O'Reilly, Landis's chief executive, said sales are taking off as costs come down and as utilities search for better tools. In the future, he said, consumers will be creating "home area networks" in which air conditioners and water heaters and other pieces of equipment will be cycled automatically to reduce electricity use. "We're seeing tremendous innovation now," he said.
Oncor is proposing to give all low-income consumers free in-home display monitors to enable them to see, at a glance, how much electricity they have consumed and at what cost. The displays will help "the low-income consumers stay within their budgets so they can manage their costs better" and avoid bill shocks, said Oncor spokesman Chris Schein.
Oncor doesn't yet have rate approval, but it said its program, as currently envisioned, will cost its customers $2.35 a month for 11 years, or about $300. The meters alone cost about $120.
Houston-based Centerpoint Energy Inc. earlier this month announced that it intends to install roughly 250,000 meters, covering part of its utility territory.
Write to Rebecca Smith at rebecca.smith@wsj.com
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