SkyTel Corp. said its six-year airtime provision agreement with Enron Energy Services Inc. is still on track as planned, despite media reports that the utility company is backing off its marketing plan in deregulated states.
The agreement between SkyTel and Enron, a subsidiary of Enron Corp., names SkyTel the airtime carrier for Enron’s planned Interactive Metering Solution, which provides automated meter reading and other value-added services. The utility hopes to provide electric services in soon-to-be-deregulated markets, competing on price and unique value-added services. Enron signed a similar agreement with Ardis for industrial and commercial customers.
California is the first state expected to deregulate its utility industry, effective Jan. 1. According to Doug Marx, director of Enron Energy Services, the company had a two-phase plan to market its services in the state. The first phase was to attract customers based on commodity pricing. Enron was offering electric rates at 10 percent less than incumbent operators as well as two weeks free power if customers signed on for a year. However, incumbent operators already were offering 10-percent discounts themselves, and customers wanted more incentive to switch to Enron.
Enron signed only 30,000 customers in a market of 30 million. The company then said it was halting further marketing of this type.
Marx disputed an April article in The Wall Street Journal that said Enron was scaling back its efforts to enter deregulated markets both in California and the rest of the country. According to Marx, Enron is not allowed to place its own meters in California homes until Jan. 1. Until then, the company is conducting consumer market studies and product development.
“We have made great strides,” he said, with architecture and data structure development for the Interactive Messaging Solution. “We’re literally working in months instead of years.”
In the meantime, Enron hopes to have some 10,000 homes in Portland, Ore., equipped with such wireless meters by the end of the year and into next year. Marx said that rollout may coincide with two or three other markets, the names of which he would not divulge.
He pointed to the second stage of Enron’s marketing effort as the primary push into California and other states. Once it begins operating in the state, Enron plans to offer value-added products and services to attract even more customers, and to do so more profitably. The agreement with SkyTel (formerly Mobile Telecommunication Technologies Inc.) plays an important role here.
The company will use Motorola Inc.’s CreataLink2 wireless module for ReFLEX networks to connect its customers to SkyTel’s network. This enables several services, including automated meter reading, which simply means the utility will be “paged” with electric-usage information.
But both Marx and officials at SkyTel said that wireless meter reading is only a fraction of what can be provided.
“Everything we’re doing is really more about a total service solution, which provides automated meter reading, but also provides a host of value-added services,” said Mark Rodgers, vice president of SkyTel’s fixed wireless division. “The services we’re developing are very practical and are really going to enhance people’s lifestyles.”
First of all, the CreataLink2 module will not necessarily reside only in the meter. States have different rules for deregulation, and some do not allow the meter to be unbundled from the utility. So in order to provide the same service, the wireless module must be able to exist in other areas while still performing the same function.
“We need to think about the meter as only one point of the network, not the network itself,” Rodgers said.
The module can be in the meter, on the thermostat, in the alarm security panel or even on a light post away from the home, providing wireless capabilities to several homes in the neighborhood at once.
Once installed, Enron can provide basic automated meter reading as well as customer-care solutions and advanced value-added services.
The utility plans to offer customer-care services at no extra cost. With the CreataLink2 module somewhere in the home, utility companies remotely can connect and disconnect power and allow customers to receive daily consumption updates and usage costs.
Revenue-enhancing services include family messaging using a fixed paging station in the house, wireless alarm backup and eventually the ability to control larger appliances by “paging” them.
SkyTel has similar telemetry agreements with other utility companies, and is expected to announce soon another with Novatek, a gas, water and electric utility based in Milwaukee, Wis.
