UPSTREAM METERING:  	A CONCEPTUAL ASSESSMENT

    14 June 1996            Eric Woychik, UCAN

INTRODUCTION AND OVERVIEW

The concept of upstream metering is to use metering points between a set of
individual customers and the transmission system.  This may involve a meter at a
transformer serving three customers  or substation serving fifty customers.  If
a specific load pattern can be isolated by upstream metering, which may involve
one or more meters, then direct responsibility for this demand pattern can be
attributed to those who use and should pay for this power downstream.  

This allows the users of this power can be billed for the exact load flow,
accepting the normal amount of error in any metering.  Thus, the settlements
process can be resolved without fear of subsidy flowing to the power exchange of
to bilateral contracts customers.

The use of upstream metering assumes that the meters used for this purpose are
acceptable to the ISO and PX for purposes of providing bulk power settlements.
There are a number of issues then about how to ensure that this type of
metering, which would usually be at the distribution system level, can be
accomplished.

The second major issue area involves the resolution of the bills for power that
customers pay who are downstream of the metering points used for settlements.
Once upstream metering responsibility is clearly defined, then any issues with
averaging of customer prices for power, such as with load profiling can be more
clearly defined.  Most importantly, where parties take responsibility for
payment of power based on upstream metering the potential for subsidy through
load profiling, price averaging, or load shifting load is dramatically reduced.

This does not, however, diminish the potential for conflict over subsidy between
customers who are downstream of the upstream metering points that are used for
bulk power settlements.  With responsibility established for upstream metering,
the opportunity for customers to install their own individual meters is not
reduced.  This would allow for what has been termed "net metering" to determine
the aggregate power use of customers who are downstream of points directly
metered upstream.  This aggregate power use would be the arithmetic difference
between the upstream metered power use and the individually metered power use.  

With application of upstream metering and net metering, individual customers
have the flexibility to install meters as they wish and subsidy can be
eliminated that may otherwise impact power users and providers upstream of
responsibly metered points.  This approach then provides the basis for
responsible load profiling and aggregation without the use of individual meters,
while allowing the use of individual metering for those who so choose.

ISSUES WITH UPSTREAM METERING 

An initial set of issues related to upstream metering can be summarized as
follows:  

 	Distribution company access to allow upstream meters to be placed on
their facilities.
 	Standards for upstream meters.
 	The use of upstream meter information, such as confidentiality of use of
metering data.
 	Who will be responsible for meter reading, verification, and data
transfer to accomplish settlements?

ISSUES WITH DOWNSTREAM AGGREGATION, LOAD PROFILING, AND NET METERING

Additional issues relate to the treatment of customers by aggregators
downstream, as follows:

 	Whether customers must "buy into" the choice of upstream metering or an
individual meter?
 	Will customers who choose to "opt-out" be required to purchase an
individual meter?
 	Whether the sponsor of an upstream meter gains special rights to
aggregate for related downstream customers?
 	Whether by purchasing and installing upstream meters an aggregator can
limit the entry of other aggregators?
 	Whether aggregation based on upstream metering and load profiling must be
regulated to ensure against potential abuses and inequity?

A RECOMMENDED APPROACH FOR DISCUSSION

UCAN believes that upstream metering provides a responsible point to define
power and financial flows so that a proper settlements process can be
accomplished without concern about major subsidy to customers who are upstream
of such metering points.

A set of customers could agree to have their power provided by an aggregator who
uses upstream metering.  For those who choose to remain default customers it may
be possible for an aggregator to agree with the UDC to net out the specific
(non-RT-metered) power quantities of the default customer based on load
profiles.  The default customer loads would be "net of" (subtracted from) the
upstream metered load.

Then the question is whether by providing upstream metering and because meter
providers would have exclusive use of that information the entry of other
aggregators would be prohibited?  The obvious answer would seem to be no.  But
what if another aggregator wants to set meter downstream of another upstream
meter provider?  This would also seem to be acceptable.  

Thus, there should be no artificial entry barrier to either meter providers or
aggregators.  Consistent with this there should not be requirements for meter
providers to disclose metering information to other aggregators.