EWT: Briefly explain how the need for greater energy management and efficiency has impacted, and continues to impact, your organization.

Tarnoff: The advanced metering infrastructure (AMI) industry is being driven by rising energy prices, increasing environmental regulations, shortages of energy and water, and distribution constraints. Utilities, along with consumers, businesses and legislators are demanding solutions to better enhance reliability, manage costs and conserve resources. Key legislation is in place (e.g., EPAct) or being drafted (e.g., building codes) to meet these needs. Utilities, consumers and businesses alike are looking to solution providers for the products to make this a reality. Cellnet is challenged with developing industry-leading solutions to these market needs. Today, Cellnet provides the utility industry with the leading data communications network and enables the reality of advanced infrastructure for top utilities across America. We operate the single largest AMI network in the United States, which adds up to more than 12 million electric, gas and water endpoints already deployed and delivering data daily for the nation's top utilities.

The energy and water markets today can be categorized as open-loop systems. Energy and water providers know what they move into the distribution systems, but they do not know how much is being used by consumers until a month or more later. Consumers, likewise, have no immediate information on the cost or amount of energy and water they are using. The result is inefficient use of assets and higher costs to consumers, businesses and utilities alike.

Cellnet is meeting the industry challenge by creating products to enable ZigBee in-premise networks that act as an extension to a utility's AMI. Just as AMI closes the loop by providing near real-time energy and water consumption information to the utilities, in-premise networks close the loop for consumers by linking near real-time price and use information from the utility to their appliances and controls (e.g., smart thermostats) to manage their use and cost.

EWT: Please explain why your organization selected ZigBee technology? Did you consider any other alternatives?

Tarnoff: Cellnet has been a leader in communication in the energy and water industries. We closely watch technology and emerging market needs. The market has defined specific needs:

• open standards protocol with no or negligible licensing fees;

• vibrant industry support;

• tangible products and services from multiple sources;

• remotely upgradable firmware;

• no new wires;

• low power (e.g., the ability to operate on batteries measured in years);

• reliable;

• low maintenance (e.g., meshing, self organizing);

• ability to scale to hundreds or even thousands of devices;

• standards-based security (e.g., AES128); and

• ability to read electric, gas and water meters.

In short, ZigBee delivers what the market is asking for. No other technology does all this. We considered and continue to evaluate many other alternatives including Home Plug, Wi-Fi and others.

EWT: How is your organization benefiting from ZigBee?

Tarnoff: Cellnet benefits from ZigBee technology and the ZigBee Alliance itself. As stated earlier, the technology provides the features that the market wants. This makes ZigBee the ideal choice for making available the information on the utilities' smart grid to home and business owners. The ZigBee Alliance provides a beneficial forum for learning about the technology, ensuring interoperability and addressing evolving market needs. The alliance also provides the opportunity to network with industry leaders leading to new business opportunities.

EWT: Can you explain how ZigBee is helping your customers?

Tarnoff: Information on price, present consumption and environmental impact will now be readily available for homeowners and businesses to balance budgets and life-style or business operations. ZigBee certification ensures device interoperability. Consumers are assured that a device from manufacturer X will work with one from manufacturer Y. This fosters competition, giving consumers more choices at affordable prices and enabling energy management and efficient home area networks.

The home area network may consist of:

• In-home displays. Stand-alone units that provide energy use information, pricing, alerts, and other messages.

• Programmable communicating thermostats (PCTs), also known as smart thermostats. These thermostats receive price and control signals from the utility to manage consumers' energy budgets, match lifestyle needs and enhance service reliability. They can also function as an in-home display.

• Load control switches. Switches that turn on and off loads such as domestic water heating and pool pumps in response to signals from the utility or local in-premise controller.

• Lighting controls. Switches and dimmers that regulate lighting in response to signals from the utility or local in-premise coordinator/controller.

• Intelligent appliance. Refrigerators, dishwashers and other appliances connected to the in-premise network respond to control signals and send operating information to the network.

• Utility access point. The interface between the in-premise network and the utility. The UtiliNet ZigBee gateway would perform this function.

• Coordinator/controller. Keeps track of devices on the system and can provide additional software interface functionality to automate customer preferences.

• Other yet to-be-discovered applications.

EWT: Are there any new opportunities that the adoption of ZigBee has brought to your organization?

Tarnoff: ZigBee has been instrumental in opening a new category of opportunity in the utility market, which is to provide near real-time utility information and services for energy management and efficiency beyond the meter into homes and business across North America. Cellnet is developing solutions to interface home area communication technologies with the Cellnet UtiliNet AMI, and is expanding its suite of ZigBee offerings, as well as exploring other technologies. Devices such as in-home displays, load control devices and programmable thermostats are being designed to promote home and business energy management and efficiency.

About Cellnet Technology:

Cellnet provides intelligent communication and automation solutions to energy and water businesses worldwide. The company's offerings include advanced metering infrastructure, in-premise networks, automated meter reading, SCADA and distribution automation. Cellnet's proven record of delivering customer value is demonstrated by more than 14 million customer endpoints representing contracted revenue of more than $2.2 billion over the next 15 years. For more information, visit www.cellnet.com.

Mak Tarnoff is the director of product marketing for Cellnet Technology Inc. A 27-year veteran of the utility industry, Tarnoff's focus is to provide product vision and strategy as a foundation for implementing technology solutions to meet customer needs. As a recognized utility subject matter expert, he has held positions providing marketing and product leadership for companies including Distribution Control Systems Inc., Navigant Consulting, New York State Electric and Gas, and the Knoxville Utilities board.