In the serene city of Palo Alto, with broad sidewalks dotted with mature trees leading up to manicured lawns fronting large California-styled homes, Smart Energy International met with Tom Auzenne, Assistant Director of Utilities, Customer Support Services Division, City of Palo Alto.

Tell us a bit about yourself.
Tom Auzenne: I’ve been in the utility industry for more than 30 years, and I’ve been at the City of Palo Alto for approximately 14 years. Prior to that I was with Pacific Gas & Electric Company. I’ve had a variety of positions, from marketing and customer service through to natural gas transmission, governmental affairs, energy efficiency and the like. In my current position I am in charge of customer service and marketing for the City of Palo Alto Utilities.

And please give us some background on the utility.
TA: The City of Palo Alto Utilities (CPAU) Department has been in existence for over 100 years. Our department supplies electricity, natural gas, sanitary sewer, water, and commercial fiber optics services. The Public Works Department also provides refuse and storm drain services. With this varied combination we are unique in this part of the United States. You usually find that a utility will provide maybe one or two services, but hardly ever six or seven.

Tell us about your AMR plans.
TA: Metering is a very important subject, certainly for us as a utility, as it has gone beyond being a simple cash register to a system of dialog with customers. When we initiated our AMR pilot program, we looked at determining which reading methodology would suit us best both operationally and financially. We were particularly interested in finding a solution for those meter installations that were difficult for our meter readers to access, due to increased customer site security. At the same time we were also going to upgrade our aging customer information system. It’s a bit of a chicken and egg situation right now. Again we are in a unique situation, because our meter readers read gas and electric and water, which does affect cost-effective calculations for a full AMR rollout. We will have to do either all or nothing.

Electric is fairly easy, with a number of manufacturers who offer electric metering. Gas is slightly more problematic because of the number and location of the meters – once you put something in the ground life gets kind of complicated because of communication access. Water meters are probably our most problematic installation, because not only are they in the ground, but the environment is terrible. You have boxes that fill with water, sometimes you have to have metal covers, so there has to be a reliable way to get the signal out the box. But I think we have addressed most of these operating challenges with various technologies. We have been successful in billing our test routes, and accessing our difficult-to-access installations. We are testing three different reading methodologies and expect to settle on one.

And are you involved with AMI?
TA: We have a pilot system in place with about 100 of our largest commercial customers. Some are using it daily, others are using it quarterly. We are looking at expanding this once we have our CIS replaced, which should be by 2009.

The meter information is uploaded to a secure server that customers can access. Right now we have a third party vendor looking after this, but meter manufacturers are also starting to offer these ‘back-office’ services. The concern with this is being locked into one particular vendor on a vertical basis. We have third-party meter reading software, we have a different third-party billing software, and our CIS will be supplied by yet another vendor. The one thing that hasn’t really happened yet is open architecture for a lot of the different functions. You have to be able to tailor the product to the customer, and there is a lack of flexibility at the moment.

Other than the commodity itself, information is probably the single most important service that the utility can provide to the customer. If you want to partner with your customers, say with demand response programs, you have to provide them with the information and the tools to enable them to make intelligent decisions. I’ve been a big fan of providing information direct to the customer for many years, and the market for making this information available is becoming more mature.

Water and energy efficiency has gone beyond the basic utility rebate. It’s much more customized now, and needs to be customized for individual customers’ business operations. You have to be able to provide them with high quality data and information – so again we get back to metering. Metering is not just the bill, it’s also the heart of the demand response, efficiency, load-shifting, and load-shedding programs. It is also the key to whatever the future will bring.

What are your plans for the future?
TA: We will have to have our CIS backbone in place in order to look into that future. Then we can ask what types of metering products and services do we want? It may be that AMR will never be cost-effective for us – there will always be meter-specific tasks, not necessarily related to reading, but our approach has been to investigate both AMR and advanced metering. I see a melding of the two, because the same technologies you use to read the meters could be used again for metering infrastructure on a near real-time basis. The business is still evolving and the product is still evolving, so it’s a good place to be. I’m looking for a technology that is sufficiently adaptable and won’t become obsolete in the near future. It has to continue evolving to meet the needs of both the utility and the customer.

Open architecture and total interoperability will allow a variety of new players to enter the market. It will be interesting to see if the market will decide the next steps, or if mandated changes will be introduced. When regulators want to see change they usually force the issue, so I expect to see interoperability coming sooner rather than later.

What strategies have you got in place to communicate with customers?
TA: About 12 years ago we implemented a key account program. Eighty percent of our revenue comes from commercial customers, so it was an easy jump to put out super customer service reps to look after our large customers. This was in anticipation of electric and gas direct access in the late 20th century. We deal with our customers not only on efficiency matters, but on billing matters and emergency outages, as well as planned outages for system improvements. The idea is to have a single, consistent point of contact with the customer whenever possible.  

How do you manage customers who steal energy?
TA: We haven’t had very much of a diversion problem at all in electric or gas. Water is a bit more problematic, in that you can have someone in a tanker truck pull up to a fire hydrant and fill it up, or open a bypass around the meter. But in terms of unaccounted-for losses it’s been negligible.

Are you involved in R&D activities?
TA: One of our energy efficiency research, development and demonstration projects is really interesting, and may be unique in the energy utility industry. We had two identical buildings, side by side; one had its old HVAC (heating, ventilating, and air conditioning) system replaced with a new, high performance HVAC system, and, at the same time, the other building had its old HVAC system replaced with a ground source heat pump system. We are currently using advanced metering to monitor both systems, and we’ll be publishing a paper on this work shortly. The difference in efficiency is staggering.

From the economics of that demonstration project, we’ve been able to replace the old HVAC system during a remodel of Palo Alto’s Children’s Library with a ground source heat pump system. Using advanced metering, we are in the process of displaying the real-time performance of that system on the web and routing it to a big video screen in the facility itself. Again, this is a wonderful application of metering and the display of data.

What’s your vision of the future?
TA: On the metering side, it would be trying to identify those metering systems which will give us and our customers the greatest value. For the utility in general, we will be looking at reducing our carbon footprint to the extent that our customers are willing to support this. We are looking at renewables, and we are the national leader in terms of percentage customer participation in our renewable program – the Palo Alto Green Program. Our purchasing policies have to strike a balance between finding renewable energy but still meeting local capacity and other supply-related issues. We are also trying to tie our utility’s operations in with the City’s climate protection goals and strategies. So there will be a lot going on in the next few years. Meter data will be a key component of our measurement and verification efforts.

Thank you for your input.