Deregulation lifts power utility software exports

New Zealand is finding a ready international market for power utility software developed locally in the wake of deregulation of the industry five years ago. WEL Technology, which sprang from the IT department of Waikato power company WEL Energy, has sold its billing software to utilities in the US (which is deregulating this year), Canada and Malaysia, and plans to move into the UK and France.

New Zealand is finding a ready international market for power utility software developed locally in the wake of deregulation of the industry five years ago.

WEL Technology, which sprang from the IT department of Waikato power company WEL Energy, has sold its billing software to utilities in the US (which is deregulating this year), Canada and Malaysia, and plans to move into the UK and France.

WEL Energy created its "time-of-use" billing package PV2 for its own use and then set up WEL Technology as a fully owned subsidiary, selling the product to 11 other New Zealand utilities. In May this year, enterprise resource planning software company JD Edwards started distributing PV2 worldwide as an add-on to its own suite of products.

John O'Hara, chief executive of WEL Technology, says PV2 is designed for billing business customers according to the time of the day electricity is consumed.

"Electricity costs are highly variable because, unlike petrol, gas and other forms of energy, it can't be stored," he says. "At midnight a hydro-power company will still be producing electricity, so there is far more supply than demand and prices are next to nothing.

"Conversely, at certain times of the day it can be expensive. In the US there was a spike where it went up to $7000 a megawatt/hour. This was caused when some coal plants were taken out of service for maintenance and very hot weather caused everyone to use their air conditioning."

O'Hara says while the electricity companies balance costs out for the residential market, selling electricity to the consumer for around 10 cents per kilowatt, larger customers are given the option to pay market prices according to the time of day. PV2 is designed for the latter customers, he says.

"For a utility around 5% of customers are big industrials which generate 40% of revenue and that is who we are aimed at.

"One business customer was paying $20,000 a month for electricity before the utility started using PV2. Now its down to $7000 a month.

"Companies are shifting a lot of functions to night. These days many buildings put the air conditioning on at 4am and pre-cool the building at off-peak time. Then at 6am the air conditioning goes into low power mode to maintain the temperature."

PV2 is based on the Oracle 7.3 database (currently being ported to Oracle 8) and is written in Visual Basic. O'Hara says WEL has spent about $2 million to date on developing the software.

Also with its eye on the international market, Sanderson Computers has just obtained benchmark certification for 1.1 million consumers for its Gentrack utility software.

Gentrack, another locally developed billing system for utilities, is used by more than 30 electricity, water and gas distribution companies in Australia, Malaysia, the UK, Northern Ireland and Cambodia. James Docking, business development manager for Sanderson Computers, says 25% of the Gentrack's revenue currently comes from overseas but this is growing rapidly as deregulation takes hold in other countries. However, the number of sites in New Zealand will shrink next year as local companies merge.

As local utilities merge and thus increase customer numbers and as Gentrack continues to be sold overseas, Sanderson needed to prove that the software was capable of handling large numbers of customers, he says.

"When you're coming from a New Zealand background where sites have 300,000 or less customers you need to be able to show you can handle greater numbers. In Australia a site will have a million customers, while Asian sites have three, four or five million."

The benchmark was carried out on site at United Electricity in Dune-din using working data. Processing was performed in real time and the process was audited by Pricewater-houseCoopers.

Gentrack is also working on benchmarking to three million for large overseas sites.

The objective is to secure audited results to assure potential clients throughout Australasia and the US that Gentrack is a fully tested solution for major utility companies.

Auckland-based Peace Computers has also had success in selling its package Energy to Vancouver-based gas company BC Gas.

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