United Electricity is spending more than $1 million upgrading its systems in anticipation that “deemed profiling” will be widely adopted to allow competition for residential customers.
Dunedin-based United is unique in New Zealand because it was set up to sell to customers across four different networks that it doesn’t own. Deemed profiling, which is used in the UK and California, is a method of calculating who pays for energy consumed. United and Southpower recently announced a trial where each utility will take on up to 1000 of each other’s customers.
United chief executive Anthony Fowler has presented a proposal to Energy Minister Max Bradford outlining how competition for residential electricity customers could be put in place this year without waiting for further technology developments.
Residential competition has been forestalled because of the cost of sophisticated metering. That’s because the wholesale price of electricity changes each half-hour and retailers need to know what power has been consumed during each half hour and also the wholesale price for the period.
Fowler says the trial with Southpower removes the excuse that technology is not available to allow competition. “It’s too easy for power companies to excuse inaction by saying they are waiting for the right technology or for the technology to become affordable. This trial gets us started.”
United has ordered a powerful Digital Alpha 4100, at a cost of $287,000, to drive its upgraded Gentrack software platform, which provides the underlying billing system.
“We’re also looking at front-ending it with systems that link to the database as well as the PABX for call centre support,” Fowler says.
“Because of the nature of our business, we don’t have the ability to cross-subsidise, so we have to spend a lot of effort on service at the lowest possible cost.”
The upgraded system will be rolled out over the next five months. Fowler says he expects testing to begin early in December.