Web start-up gives customers the power

Two trends-home automation and the deregulation of electric power companies-have come together in California to produce a company that its CEO calls the "world's first Internet utility."

Utility.com buys power wholesale, finding the cheapest electricity every hour through a computerized automated power exchange. The company sells that juice to homeowners in California at rates that CEO Chris King said can be substantially reduced for two reasons. Transactions costs can be cut by moving all billing and account management onto the Web; and in some cases, customers can shift their high power usage hours to off-peak times, taking advantage of cheaper kilowatt rates.

"By using the Internet we reduce our transaction costs by as much as 90% compared with traditional paper-based billing," King said. "That creates savings that we can pass on to customers." A $100-per-month power bill could be cut by as much as 15%, he said. Customers can sign up on-line for the service-which was rolled out last week-and upon receiving a monthly e-mail bill, can go to the Web site and pay by credit card or debit card.

But back-office costs aren't the only overhead utility.com has managed to avoid. Instead of sending meter readers to check individual households' power consumption, utility.com equips customers with meters from CellNet Data Systems. CellNet's meters integrate two-way 915 Hz to 928 MHz radios that communicate with controllers mounted on utility poles up to a quarter of a mile away. Base stations then network the controllers into a WAN that sorts and stores the data.

"Utilities basically have balanced their rates at the end of every year, or even every two years," said Denise Rushing, sales and marketing vice president for CellNet. "They check out their utility purchases at the end of the year, and if their fuel costs were higher or lower than expected, there's an adjustment. Today, in a competitive market, electricity is being sold on an hourly basis. California is the first competitive market to require more frequent data, and [utility.com] is among the first to take full advantage of the kind of data the CellNet network can bring back."

Customers can retrieve that hourly data when viewing their electronic bill on the utility.com Web site, viewing their power consumption over the last year or comparing the current month's usage with that of the previous year. Eventually, utility.com expects to offer "smart" thermostats containing radio receivers linked to the CellNet network.

"Customers with this equipment can go to the Web site and set thresholds for their heat and air conditioning needs at different times of day-to turn the [air conditioning] on a half hour before they arrive home, for example," King said.

CellNet is working on a thermostat with full two-way messaging functionality. "That would allow us to offer more services," King said. "We could monitor the actual temperature of the home or business."

Some analysts have questioned whether this kind of home energy management will catch on. "Only about half the homes in the country have PCs, and about half of those are connected to the Internet," said Rene Wiley, an analyst who studies home automation for Kiser Ranulf Associates. "And although California has had deregulation in place for a year, only about 1% of its consumers have actually switched power companies."

But King is confident that the market for cheap, automatically controlled power will only grow. Eighteen states have deregulated their electric utilities so far, and more likely will follow. Utility.com is targeting Massachusetts, Rhode Island and Pennsylvania, as well as looking for relationships beyond its current ones with the three biggest utilities in California.

ARRIS PASSES 100K LINES Arris Interactive, the sole announced supplier for AT&T's broadband telephony deployment, said last week that its Cornerstone system has more than 100,000 lines in service. Of that total, more than 60% are in the United States.

@HOME OFFERS WEB FAX Subscribers to @Home Network can send faxes over cable Internet, now that the provider has signed an agreement with .comfax Inc. Users download software from the .comfax site, then send documents and images from their PC desktops over .comfax's global IP fax backbone and get receipt confirmation via e-mail.