To: Michael Shames/Eric Woychik, UCAN
From: Toby Tyler, PG&E
Re: Upstream Metering and Market Rules (DAWG B, 6/26/96)
Date: July 5, 1996

Michael and Eric:

Many thanks for your thoughtful paper on upstream metering. I'd like to
take this opportunity to offer some general comments on PG&E's behalf.

Does your proposal preclude the use of load profiling without upstream
metering? If so, it would seem to limit the ability of customers to elect   
direct access to those who are aggregated through an upstream meter. If,
as we suspect, the opportunities for taking proper advantage of upstream
metering are limited, how will other customers without interval meters
access the competitive generation market?

If appropriately implemented, we believe that load profiling may provide
this access on a broader scale, without the need for customers to bear
additional cost shifting. I agree that load profiling restricts the   
potential for reductions in the marginal cost of power that may result
from general responses to price signals. But so too would upstream
metering when combined with load profiles downstream.

Upstream metering can be an expensive way to minimize accounting
error.  At the transformer, it requires primary voltage meters, which
today cost $1,000-$5,000 or more to install. More importantly, distribution
system design does not lend itself well to metering entire circuits or
loads at the substation level.  These systems are often "looped," with
multiple delivery points to ensure reliability. As a result, a meter at a   
transformer or substation may capture more or less load than it was
intended to.

Net metering could introduce unintended cost shifting. If downstream
customers' loads are significantly different from the load pattern at the   
interval meter, direct access customers may not realize the cost savings
they expected or were promised. Or they may realize them at the
expense of other customers.

The UDC will always have a need to meter end-use customers. Besides
billing for distribution services, measuring distribution loads is   
essential for investment planning, and for the safe and reliable operation
of the distribution system.

Toby Tyler
e-mail: txt9@pge.com
tel: (415) 973-6600
fax: (415) 973-4071


cc:
Nancy Day, NEV
Mac McCay, SDG&E (fax)
Megan Scott-Kakures, SCE
Sy Goldstone, CEC (fax)
Jim Price, DRA
David Kaplan, PG&E



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