Electricity Costs Attacked Through XML - InformationWeek

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12/26/2007
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Electricity Costs Attacked Through XML

By implementing an in-house XML-based settlements system, a California consortium is lowering the cost of power distribution.

In doing so, the NCPA gained a step on the rest of the industry, as the California Independent System Operator will require all of its vendors to provide power distribution and billing data as XML files next March. NCPA has already tested its ability to automatically process XML settlement statements. NCPA has scaled out its Oracle system to 10 times its needs "without seeing any bottlenecks," Tiu said.

Being able to automatically process the Independent System Operator statements will represent a huge cost savings to NCPA, according to Tom Breckon, the former information systems manager for NCPA, now retired and retained as a consultant.

NCPA is paid about $100 million a year for the power it delivers to the grid, but it needs about 40% of that amount for the staff required to schedule deliveries to the grid and process the Independent System Operator settlement negotiations. NCPA represents 2% of the power delivered on the grid.

When settlement statements come in, Breckon says NCPA has eight working days to determine where mistakes may have been made. "If we fail to get back to [the California Independent System Operator], we lose our chance to reclaim the monies from corrections." Yet, he acknowledges, "we can't inspect that volume of data on a manual basis."

Gaining the expertise to deal with settlements as XML data over the past three years has cost NCPA the equivalent of one year's expense of a manager's salary. Meanwhile, NCPA has positioned itself to become its own statement processor and analyzer, submit disputes to the California Independent System Operator for corrections, and collect more of those corrected payments for members on a timely basis.

"In my opinion," said Breckon, "everybody will be doing it this way five years from now. It would reduce costs for all rate payers."

Evidence that Breckon may be right lies in the fact that NCPA has received 28 requests in the past two months for its Oracle database configuration file since making it available as open source code.

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