A small, white dry-erase board hangs on the wall in Tom Wilsons modest office on North Market. Its been scribbled on and erased hundreds of times, but Wilson believes one of those scribbles, a diagram drawn almost two years ago on the heels of the California energy crisis, could be the key to growing his business rapidly.


Wilson is president and CEO of PCS UtiliData, a 20-year-old Spokane company that seeks to save electric utilities and their customers energy and money, respectively, by improving the distribution of voltage at substations.


PCS UtiliData has developed and has begun marketing a patent-pending technology called Adaptive Voltage Control (AVC), which uses computers to automate that distribution. Wilson believes the technology can improve energy conservation on a large scale, and that PCS UtiliData, which currently employs 15 people and last year had revenues of about $1.9 million, will grow dramatically as a result.


We invented Adaptive Voltage Controlwe drew it outon that whiteboard right there, Wilson says, bounding out of his office chair, grabbing a dry-erase pen. We had to find something that helped energy companies, as well as helped ourselves.


So far, PCS UtiliData has sold its technology to two utilities, Spokane-based electric cooperative Inland Power & Light Co. and Clatskanie Peoples Utility District in Northwest Oregon, as part of a 15-to-20-year beta test site program sponsored by the Bonneville Power Administration. The company is in talks with Spokane-based Avista Corp. and several other public and private utilities that are interested in the technology, Wilson says.


Additionally, it has formed a partnership with the Spokane Intercolle-giate Research and Technology Institute, which will play an active role in UtiliDatas growth strategy, he says. Two of the research institutes staff members will spend time helping PCS UtiliData write and implement a business plan that will call for it to grow its revenue rapidly within three years from $1.5 to $2 million currently, he says. SIRTIs role mainly will involve marketing, planning, and recruiting capital investors.


PCS UtiliDatas development of Adaptive Voltage Control is part of a 20-year-old industry movement toward whats called conservation voltage regulation, which seeks to make utilities regulation of voltage more efficient. Wilson and Ken Hemmelman, a power consultant with PCS UtiliData, developed AVC by applying the energy conservation strategy to the companys experience in designing, modifying, and assembling electronic control panels, such as for aluminum-plant and sawmill systems. The technology consists of proprietary software that can be used with industrial-duty hardware. About 2,000 of Inland Powers customers began receiving power regulated with AVC three months ago, and 3,400 of Clatskanies residential customers are on lines now regulated by AVC.


Kris Mikkelsen, CEO of Inland Power, says the technology will allow it to conserve about 1 million kilowatt-hours of electricity a year initially and more later as more of its customers are brought onto the system.


As we look back at the last couple of years and the energy crisis and all the challenges the region has had providing enough electricity, it becomes more and more important to look for creative approaches, to conserve energy, and to make use of the resources we have, Mikkelsen says.


Wilson says one of the benefits of AVC is that it reduces line loss, or line drop, by optimizing distribution. Line drop is the loss of voltage that occurs in a line as the distance from the substation grows. Cutting down on line loss is of great benefit to companies with large territories, such as Inland Power, which serves customers in 13 Eastern Washington and North Idaho counties.


Inland Power shared the $275,000 cost of implementing AVC in its system with Bonneville Power, Mikkelsen says. Although the initial cost was high, she says, We did a thorough analysis before we ever embarked on the project to make sure cost-benefit was there. And it was.


BPA also covered most of Clatskanie PUDs $400,000 implementation cost, Clatskanie spokesman Paul Skarra says.


Its something that can save a lot of energy, and it makes the utility more efficient, he says. It gives the utility more control over its operations. You know whats happening on your circuit and you have control over it from the utilitys office.


How it works


AVC automates the distribution of voltage through power lines by using supervisory computers at substations. The computers continuously gather information about how much voltage is being used at sensory points along a utilitys power lines. That data can be transmitted via satellite, through radio waves, or through fiber-optic lines. Back at the substation, the computer reads the data and regulates how much voltage is sent through a line according to the immediate need for power. It also can detect immediately the location of a power outage or a downed line.


Conventional voltage-management systems measure power only at the substation. They dont adjust the flow of voltage according to use and, therefore, energy is wasted when more is available than is being used.


Because utility companies dont want to subject customers, including those living at the end of power lines, to flickering lights and chilly homes, they maintain voltage above minimum levels during peak load periods. Theres almost always higher-than-required voltage in an electrical distribution system, and engineers must adjust settings manually several times a day. PCS UtiliData says its technology allows utilities to match the amount of voltage thats being supplied much more closely with whats needed.


With AVC, a computer regulates it instead of engineers, Wilson says. Engi-neers cant measure and monitor it constantly. Theyre estimating. The computer makes it precise.


Energy reduction on a line managed with the new technology varies from 0.4 percent to 2.5 percent, Wilson claims. If the technology were implemented nationwide, the country could save 3.5 percent of the electricity it consumes and reduce greenhouse gasses created in the generation of electricity by 7 percent, he asserts.


To avoid a revenue decline after implementing an energy-conservation system such as AVC, utilities either can revamp their rate structure or raise rates by a small amount, Wilson says.


The key, Wilson believes, is helping utility customers un-derstand how AVC works so theyll accept rate hikes to implement the technology.


Even some electrical engineers have yet to embrace conservation voltage regulation as an energy-saving tactic, though Pacific Gas & Electric Co., of San Francisco, for one, has said it backs the idea that regulating voltage transmission better is an effective way to conserve energy, says Pacific spokesman Jon Tremayne. The Edison Electric Institute, an electric company trade association, also has come out in favor of the concept.


UtiliData is seeking to build its presence in the utility industry while it waits for its patent to be approved, and its offering voltage-conservation technology at a lower cost than its competitors, Wilson claims. For example, Edmonds, Wash.-based MicroPlanet Ltd., which controls voltage on a house-by-house and business-by-business basis, charges each household or business about $1,150 to install regulators on their meters, says founder Greg Wieland. Inland Powers per-customer cost to implement PCS UtiliDatas technology was about $125, although Inland isnt charging customers any installation fees under the pilot program, Mikkelsen says. PCS UtiliDatas hardware is located at the substation, so its easier to install and customers are hardly impacted by the change, he says. MicroPlanets Wieland says his product reduces voltage used by an average of 10 percent, and that company currently is working with the Snohomish Public Utilities District to install its regulators at the ends of power lines and reduce costs, he says.


Wilson founded the business in 1983 as Programmable Control Services Inc., a control-systems integrator. The company began doing business as PCS UtiliData two years ago after shifting its focus from efficiency-building automation systems for factories and mills to energy conservation. It occupies a 6,000-square-foot office-warehouse building at 6620 N. Nevada.


PCS UtiliData hopes to obtain a patent for AVC within three years. The companys revenue has fluctuated between $1.5 million and $2 million a year over the last four or five years, Wilson says. The company has experienced high turnover among employees because its revenue has gone up and down, he says, but has maintained a staff of about 15 during that period.


It recently hired a Montreal-based vice president of business development to help expand the companys sales and marketing in Canada. Wilson expects some major utility companies to adopt AVC pilot programs this year, which would require PCS UtiliData to hire at least three additional employees. He says he expects the company to have revenues of about $4 million this year. If the pilot programs are successful, Wilson expects the companys revenue and employment in 2004 and 2005 to grow sharply.