Novell, Utility to Develop Networks Over Electric Lines : Telecom: The venture with UtiliCorp may help speed the entry of power companies into the communications business.

Computer software powerhouse Novell Inc. said Wednesday that it is working with a major utility to transform ordinary electrical wires into computer networks, an agreement that could both speed the arrival of “smart appliances” and accelerate the entry of power companies into the communications business.

The technology being developed by Novell and UtiliCorp United Inc., an aggressive Missouri-based utility company, could eventually find its way into millions of appliances: A worker expecting to be home late could use her computer to have her porch light and thermostat turned on in time for her arrival and have the oven heated and ready for a frozen pizza.

In addition, the technology could make setting up an office computer network far easier and cheaper. Novell Chief Executive Robert Frankenberg, announcing the agreement, showed his audience an ordinary power cord and declared: “This is all you need to know about setting up a network.”

For the electric utility industry, finding new ways to exploit its vast infrastructure is crucial in an age of deregulation and declining margins, and telecommunications services of all kinds are a popular target market.

Technologies such as the one being developed with Novell could also promote energy efficiency by giving customers tighter control over energy consumption. Industrial production processes that are heavy consumers of energy could be programmed to operate at times of the day when electricity usage is lowest and rates are the cheapest.

While there is already technology available that uses electric wires for communications, conflicting standards and limits on data transmission rates have inhibited acceptance among consumer electronics and office equipment manufacturers.

The Novell system is capable of transmitting up to 2 megabits of information without interference from power passing simultaneously through the lines. That is about 20 times the power of previous standards and is enough to comfortably handle more than a dozen computers in an office without installing special cables.

“A name like Novell, with their networking ability, together with someone as aggressive and imaginative as UtiliCorp could provide the needed standard,” said Clay Whitehead, a McLean, Va.-based consultant who authored a major report last fall for the Electric Power Research Institute on the opportunities for electric utilities in communications. “There is a lot of ferment now, but when it gels it could happen very quickly.”

But some analysts remain skeptical about how quickly manufacturers, particularly consumer electronics companies, will embrace a technology controlled by Novell. “There is some question about how easy it will be to get people to jump aboard a proprietary architecture like this,” says Stan Schatt, analyst at La Jolla-based Computer Intelligence Infocorp.

Novell, based in Kansas City, Mo., may be strongest in the office, where customers of its popular computer networking systems reside: Xerox, Canon and Hewlett-Packard have already committed themselves to developing products that work with the new standard. And Novell’s nemesis Microsoft Corp. has backed away from an ambitious program aimed at tying together office equipment such as printers, copiers and computers.

But in the home, Microsoft could have an edge. The software giant is working with Tele-Communications Inc., the nation’s largest cable company, and Pacific Gas & Electric to develop a system for managing energy use in home appliances.

The Novell partnership with UtiliCorp exploits a technology announced earlier this year called Novell Systems Embedded Technology. Embedded in a chip that would cost $1 to $2, the technology would be added to appliances, either internally or via an adapter, and effectively turn each device into a node on a local area network.

Novell and UtiliCorp will jointly develop and market applications and equipment that exploit the Novell technology with an initial team of less than 20 people. The two companies will also establish an open consortium and invite other utilities to join them in supporting the standard.

UtiliCorp, an electric and gas firm with $1.6 billion in revenue that is recognized as among the most aggressive and innovative companies in its field, says its contribution will be its knowledge of the energy and appliance market and its national brand. For example, the company has a significant business offering appliance maintenance and repair services under the brand name EnergyOne.

Deregulation and the need to become more efficient in energy operations are both helping push utilities into the communications business. Analysts estimate that if appliances are connected to energy management systems that might, for example, turn your freezer and water heater on at night when rates are cheapest, the average household could save a third of its $700 annual bill.

And some utilities are already taking advantage of their ubiquitous infrastructure of right of ways, telephone poles and internal communications systems to position themselves to offer a variety of new communications services in the future.