[Read "Peeling The EDI Onion:  Part 1"]

Transport

The Internet has enabled anyone to throw up an FTP or HTTP website to move information.  But most of these types of solutions require people touching the data, driving up the cost of the solution.  In its origins in the 1970’s, EDI introduced mechanisms such as the Value-Added-Networks [VAN] and inner/outer envelopes that enabled parties to automate the transport of their transactions.  Computers could now reliably send transactions to other computers without people being involved.

The Internet in the 1990’s took EDI practices into new domains.  The first step was to replace the middle-men VAN’s.  Solutions like the North American Energy Standards Board’s [NAESB] (formerly Gas Industry Standards Board’s [GISB]) Internet Transport, and the Internet Engineering Task Force’s [IETF] AS2 provide transport of transactions across the Internet that assure privacy, authentication, integrity, and Non-repudiation in sending transactions.

The second step still in progress is the adoption of ‘Service-oriented architectures’ [SOA], including use of WSDL and SOAP.  SOA enables real-time exchange of information, speeding up the batch-oriented world of EDI.  You no longer need to wait a day to find out the disposition of your transaction.  Wholesale and smart-meter energy marketplace demands make real-time exchange of information critical.

Best practices

One of the most common statements we hear is ‘the cost of EDI is too high’.  The reason costs of EDI are high is classic ‘pay me now or pay me later’:  you pay higher EDI upfront costs by fully automating a process, eliminating people touching transactions and eliminating errors (which cause people to touch transactions).  Making computers speak to other computers can be expensive; the downstream savings is usually worth it.

The transactions of an energy marketplace translate into real money.  The enrollment transaction turns on a meter for an energy retailer.  The usage transaction converts into actual dollars that a customer will pay.  These transactions are extremely valuable to a retailer, and are tracked that way.  Like inventory at a warehouse, they need to be able to pull a transaction, to remove a transaction, and to view the lifecycle of each transaction.

One best practice that EDI people live by is the transaction ID.  Each EDI transaction has a unique number attached to it, enabling a company to track this information as it comes in to or leaves their organization, and the downstream actions taken on that transaction (e.g. ‘was that usage billed’).  Many non-EDI markets do not include this convention, making it difficult for energy retailers to track and maintain ‘usage’ and other inventories.

Another best practice learned from EDI world is the ‘acknowledgement’, the ‘997’ in X12 EDI world.  Non-repudiation concepts include the receiver not being able to claim they did not receive it, the proverbial ‘return receipt’ in snail mail worlds.  People with low-budget hosted FTP or HTTP sites don’t normally provide receipts/acknowledgements, opening the door to claims that trading partners never received the transactions.

These practices often mean the difference between a computer taking action or a person taking action.  They represent true cost-saving measures in an organization.

Conclusion

The real costs of ‘EDI’, no matter X12 EDI or XML EDI, is not that you have to pay someone who knows what ‘REF*12’ means.  The real cost is that you need to pay attention to the gory details that enable you to eliminate errors and people touching transactions.  There is no magic bullet or magic WSDL or magic FTP site or magic HTTP site to do this.

Fortunately if you are an energy retailer, there is ESG.

ESG is called by many an ‘EDI Company’.  This name misses our significant presence in the Retail Energy Billing and Wholesale marketplaces.   But for certain, we know energy EDI (Electronic Data Interchange).   More accurately, we know how to integrate systems from multiple companies and shops.  Among other skills, we have mastered EDI, both traditional and state-of-the-art, to serve this purpose.

For ESG, the EDI onion has many layers:  formatting, transaction structure, electronic exchange/transport, and best practices.   This series will explore these in detail.

Formatting

What people think most when they hear EDI is the formatting developed in the 1970’s to enable computer systems to exchange information with other computer systems.  We can all be honest:  it is a cryptic language that has fed many children of the people who have mastered that language.  We can also be honest and admit that that cryptic language is still used today to exchange BILLIONS of transactions daily.  It is compact and, once programmed, runs forever.

XML, now over ten years old, offers a strong alternative to traditional EDI formatting (key point:  XML is a formatting language only, just one layer of the EDI onion).  XML’s primary advantage is its human-readability.  A human can pick up an XML transaction and actually understand what data is in the document (the structure), where traditional EDI uses structural conventions stored outside of the transaction itself, normally in Word Implementation Guideline documents.  XML takes this a step further offering XML Schema documents, which provide the structure of the document in a format that both a human and a computer can read.

Structure

The non-XML EDI world wrestled with the structural side of electronic information exchange decades ago, the ANSI X12 standard representing one of the fruit.  X12 transaction standards set the high-level structure of an EDI document.  While not perfect, it does bring parties closer together when deciding to exchange electronic transactions.

In this respect, the XML world is a newb, the retail energy XML world even newbier.  There is no foundation of existing XML EDI (versus X12 EDI) transaction standards that a company can rely on having broad market support.  X12 has an XML initiative that attempts to morph their transaction standards into ‘XML-Ready’, but this has not been widely adopted.  Ontario has XML standards that at one time promised to be an industry standard, and ERCOT deployed retail energy XML transaction standards in 2001 that are barely used today.  Recently the Maryland gas energy marketplace developed XML transaction structural standards for their marketplace and essentially started from scratch.

Perhaps the greatest hope at this time for Retail Energy XML standards is the North American Energy Standards Board [NAESB].  This organization forged many standards in the Gas industry, and is the de facto keeper of retail energy standards at this time.  Their current body of work uses X12 EDI, but they have always correctly preached that formatting is separate from structure:  it would not take much to transform their structural transaction standards to XML EDI.  NAESB faces greater challenges in that hope, but that is a topic outside of the scope of this post.

There are other structural issues to consider.  XML brings the possibility of  using Web Services Description Language [WSDL] and Simple Object Access Protocol [SOAP].  These cross over into transport issues which we will cover in Part 2 of the series.  WSDL and SOAP still require parties to observe structural standards.  Without a body setting those structural standards, it becomes a free-for-all.

ESG helps energy companies master the free-for-all.  Our CTG framework normalizes every existing marketplace, including every existing transaction format and structure, into a single specification that can be easily deployed.   A company does not need to be worried about XML Schema’s, X12 asterisks, etc. because ESG presents the data in a common format.

Stay tuned for part 2 where we discuss transport and best-practices!

[Read "Peeling the EDI Onion:  Part 2"]

Provider of Last Resort (POLR) is the function a utility usually serves in markets that have opened energy supply to competition, serving customers who do not choose a competitive supplier.  What will the POLR of the future look like? (more…)

When Texas opened its ERCOT marketplace to choice in 2001, they pushed all their chips into the middle of the table.  The ‘affiliated retail electric providers’ AREP were split from the existing utilities – renamed ‘Transmission and Distribution Service Providers [TDSP]  to reflect their new responsibilities – and these new AREP’s were given a period of time where they served as the default electric provider.  With default rates set high by the PUCT, energy consumers were incented to find a new electric retailer.  Eventually the burden of providing default power was spread across a broader group of REP’s.

When Pennsylvania opened its market in 1998, legislators were not so confident in the hand they were dealt.  They left the ‘default’ commodity providers as a part of the utility, and further hedged their bets with ‘caps’ that served as an ‘emergency valve’ in case energy choice did not work as designed.  After a flicker of hope for choice, higher wholesale costs essentially shut down the PA electric marketplaces.  PA residents benefited from artificially low rates set by these caps, which expire 2010 and 2011.

As these rate caps expire, consumers are getting a taste of what wholesale-market-driven prices are like.  In theory this is not much different from gas for our cars.  The market sets a wholesale price, and retailers offer products based on primarily those wholesale costs.  When prices go really high, people buy smaller cars or hybrids, or they drive less.

The same is true with electricity:  we need to consume less.  Demand continues to grow, and adding supply options in the northeast corridor is difficult , with ‘not-in-my-backyard’ [NIMBY] issues greater due primarily to population density.  Load control and other energy-saving products will grow once customers are more aware of the dynamics of the electricity wholesale markets.

Creativity in solving energy challenges is critical.  Imagine if Bill Gates stuck with his original statement that computers would never need more than 640kb of memory?!  Or if pre-1980 AT&T and Ma Bell’s were charged with deploying nationwide cellular coverage?  We most likely have no idea what the greatest energy saving invention will be in 10 years.   We are more likely to get that invention – and help solve our energy issues – with more cooks in the kitchen, not less.  Relying on a single regulated company – the incumbent default utility – to solve these problems is not the path with the most options.  Instead, let’s have a vibrant, alive, competitive marketplace of energy providers with access to the data and controls needed to offer products that give customers the incentives necessary to change their usage patterns.

Over the next few years we will see if PA’s hedged bet leaving the utility as the default energy provider was the right move.  The proof is in the pudding:  a wide variety of energy providers, products and services to help consumers manage their energy and energy costs, or most consumers on default service from the utility, with state- or utility-driven solutions to energy challenges?

I prefer my pudding with the flavor that comes with lots choices and options, please.

Starting 2/1/2010, Texas meters are moving to the head of the class.  Smart Meter Texas, a website/webservice collaborative of the big four TX TDSPs (AEP, Centerpoint, Oncor, TNMP), goes live that Monday providing energy consumers, REP’s, and other parties access to both data and features that raise the bar in smart grid world.  Where other states and markets are dipping their toes into these future capabilities, Texas is diving head first.

(more…)

I remember once reading an article in a major newspaper proclaiming that a good indicator of growth in the economy was the growth in number of packages delivered by FedEx and UPS. This obviously makes sense since consumer purchases represent approximately 70% of our GDP and a significant percentage of the goods purchased are delivered by overnight couriers. A similar analogy can be made for measuring growth in the retail energy industry. (more…)

ConEd hosted a ESCO meeting to announce some initiatives rolling out shortly.

Mandatory Hourly Pricing [MHP]

• MHP for accounts 1000kw – 1499kw total peak demand (not just one meter) begins Nov 2009, meters installed by Apr 2009 (300 customers)

• MHP for accounts 500kw – 999kw begins May 2011, meters installed by Apr 2010 (1400 customers)

PowerMove Expansion

• Allows Customer to choose supplier when they enroll, getting 7% savings immediately

• Expect Jun 2010 implementation pending PSC approval

Automated EDI Testing

• New automated testing process will reduce testing timeline to 10 days
• Web-based testing interface for trading partners; see progress; interact; email updates when files posted, etc.

• Implementation Jan 2010

Miscellaneous

• 600k accounts switched (3.1M total)
• 60 ESCO’s, 15 electric only, 28 gas only, 15 E&G

Attached below is FE’s summary of FE’s UCBRR solution.

Summary:  FirstEnergy-UCBRR-Summary-20090917

Links:

• Website, Rate Form for Met-Ed/Penelec:  http://www.firstenergycorp.com/supplierservices/files/Supplier_Registration/Ratedesignform%20rev%206%2021%2007.xls
• Website, Rate form for Penn Power:  http://www.firstenergycorp.com/supplierservices/files/Rates_and_EDI/suprates.pdf

The PA PUC ordered both PPL and PECO to prepare a report for how they would do Rate-Ready in their marketplaces.  PPL is leading a collaborative of LDC’s, suppliers and service providers through the requirements needed to make this happen.  Combined with POR, these markets in PA should be busy!  Notes:

• PA markets Duquesne, PennElec, MetEd, Allegheny Power and Penn Power all provide Rate Ready already.
• Most expect the new RR solution to look alot like the existing RR solutions already in place in PA
• PPL and PECO started with Bill-Ready in 1999
• To join the fray, contact Bruce Bolbat at PPL.
• A report is due to the PA PUC by 11/9/09.
• ESG is helping to coordinate Suppliers in this effort.  If interested, contact ESG at 800-773-3298.

Hot off the presses, these will certainly share equal-billing with that last Harry Potter novel you are still trying to finish.

PJM IG’s 2009-08-08