Concerns about a supply crunch this summer are rousing policy makers and regulators to pry open the door to innovative technologies expected to boost demand response. The strategy is expected to curb power use when temperatures and power prices rise, boosting reliability. However, in recent forays in its implementation, voluntary demand-response programs have fallen far short of the desired results (<i>Circuit<\/i>, Dec. 3, 2004). At a February 1 workshop, the state?s energy czar, as well as California Energy Commission and California Public Utilities Commission members and staff, solicited input on parameters from industry representatives for technology that would allow ratepayers?large and small?to respond to price signals. ?We are looking at what the next generation of meters may be,? said Jackie Pfannenstiel, CEC member. She noted that as many as 11 million meters that transmit power price and supply data could replace the monthly-read gauges on the outside of businesses and residences. Although a costly proposition, she said that the installation of advanced meter systems was ?too important an investment not to do.? ?We have got to start doing something before the upcoming summer,? added Ron Hoffman, a CEC consultant. The state energy agencies gave top billing to demand response and energy efficiency in their joint Energy Action Plan, and the three investor-owned utilities? 10-year power procurement plans are required to put those at the top of their loading order. Joe Desmond, deputy secretary of energy, said open access to centralized data and supporting communications systems are needed to enable utilities and energy providers ?to capture the benefits of the system.? Examples of this kind of technology can be found in the airlines industries, the banking industry?e.g., ATMs?and the New York Stock Exchange. The workshop focused on getting a first cut on technological parameters, known as a reference design, for systems that can change with dynamic tariffs and future needs. Assuming that agreement can be reached on this technology road map, there is still the tricky issue of ensuring that it does not collide with the CPUC?s upcoming decision on the private utilities? demand-response plans. In six weeks, utilities will file their proposals for meters and communications devices. If they conflict with the reference design, it will be ?a recipe for the stranding of assets,? warned Gayatri Shilberg, senior economist with JBS Energy. Much of the decades-long resistance to compatible demand-response hardware and software was attributed to utility monopoly foot-dragging. ?How we solve the demand puzzle is not going to be resolved in the utility world,? said Jim Detmers, California Independent System Operator vice-president of grid operations. Southern California Edison, in particular, is balking because of the high cost of the meters and accompanying network. They could cost the state?s ratepayers well over a billion dollars. Pacific Gas & Electric, on the other hand, welcomes the idea, while San Diego Gas & Electric is lukewarm. The carrot for utilities and other energy providers, according to Desmond, is additional income from new products, improved outage information, faster settlement payments, and simplified billing that replaces the meter reader with software and hardware. In addition, entities from retailers to community aggregators could get a grip on their energy demand, he said. Examples of industry resisting change and then turning around and reaping its benefits include AT&T, which stifled innovation, according to Desmond. Only after it was broken up did many products come on line, such as customer ID, three-way calling, and call blocking, products the company profited from, Desmond noted. Dian Grueneich, the newest CPUC member, noted that little attention was given to ratepayers? concerns regarding the issue. She added that she hopes there will be ?an opportunity to listen to customers and their goals and visions.? The key to successful guidelines to stimulate technological innovation that will enable demand-response programs to perform was said to be guidelines that are not overly specific to ensure the participation of multiple vendors.