Enel, please speak up! A plea for the real story


[Compos Mentis][March 21,  2006] There is an expression that some things “cut both ways.” One interpretation is that if someone is especially visible and aggressively seeks lots of publicity about something they say they will do before they do it, then later they must expect that people will want to know how they did it. If their original plans are extremely challenging but extensively promoted, they must expect an even higher level of public attention to the outcome. That’s the price of publicity.

Almost three years ago Enel SpA (the world’s largest publicly-traded utility) announced with great fanfare that it would deploy the world’s largest automatic meter reading (AMR) system. The US company Echelon was prominently involved as the supplier of the LonWorks® power line communications that would be part of the system. At that time Enel also became a significant investor in Echelon.

A release stated that: “Enel will provide digital electricity meters and a complete home networking infrastructure to over 27 million Italian households over a three-year period.” Another release noted: “… the system provides a platform for Enel to offer its customers additional unregulated services, such as remote diagnostics and control of appliances, security monitoring and medical emergency signalling. These services can share the same infrastructure as the regulated services, enabling them to be deployed at very little incremental cost. In effect, these additional services represent pure upside revenue.”

The system is purportedly capable of an array of other utility-oriented functions including dynamic, real-time and time-of-use pricing, prepayment metering without card, remote physical disconnect and reconnect, direct load control and others.

That was three years ago. So what happened?
We – the utility, metering and AMR industry who were showered with publicity at the time – deserve to know. How well does it work? Where are the detailed technical presentations? Where are the indications that the original claims are being met? What about the claims that the cost of the residential ‘package’ would be less than $85? What about customer acceptance? Where are the value-added services? Is this project a colossal flop? Enel, please speak up!

If the publicity blitz was not enough to create a thirst for meaningful information about the progress of this deployment, there are other reasons which cause us to wonder if it is a dream that won’t quite come true. Most efforts in other countries to combine remote meter reading with a ‘gateway’ concept to support other services such as security or medical alerts have failed abysmally. The idea of the regulated ‘core’ AMR system carrying most of the cost, while a number of unregulated services take advantage of that system, sounds good on paper, but the industry is littered with the failed attempts of companies to make it a viable business.

In the United States the recent failures of AMR/gateway companies such as Coactive Networks, Sage Systems and Mainstreet Networks provide further evidence of the technical and economic challenges involved. As Echelon and Enel may now know, this business is no simple ‘walk in the park’, and there is much to be learned from those who have been down this path before. We, the industry, want to learn from Enel.

I sincerely hope that the Enel/Echelon undertaking is eventually successful. The project has obviously met a few hurdles, and there is no indignity in that. But it is time for Enel to lift the wraps, to share its insights, to discuss and describe the progress and the lessons learned along the way. It is time to reveal to the industry whether something truly important has been achieved, or whether the original grand expectations have given way to something more realistic. We live in an era of exaggerated claims and overblown promotion. Is the Enel/Echelon effort just more of the same? Or have these companies truly broken the challenging price and performance barriers that others before them have sought to overcome?

Yes, it cuts both ways. Enel and Echelon relished the earlier publicity, the fanfare of May 2000. Now it is time for more publicity – the spotlight on the actual outcomes of this effort, for better or worse. Now is the time for candour. Now is the time for these companies to open up and discuss their progress. Now is the time.

Enel, speak up!