Afraid of AMI Commitment?

By R. Bryan Seal, P.E., SmartSynch Inc.

For almost 30 years now, I’ve been a part of an industry that has evolved from electro-mechanical meters read by “sneaker net” to advanced metering infrastructure (AMI) systems. While the advanced metering market has continued to evolve (and is projected to grow at least 15 percent to 20 percent annually for at least the next five years), utilities still face regulatory, consumer, market and evolving tech obstacles when implementing AMI.

Bringing Home the Data

During the past couple of years, the term “smart grid” has been percolating into popular media, conjuring up visions of a Jetsons-like, highly automated electricity-delivery system, where home appliances and utility infrastructure meet and interact in an overarching, interoperable IT system. While I think the day is near when we will have this, it is not here yet.

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Most utilities I know want technology that solves today’s problems and doesn’t create more problems tomorrow. Most neither want to be early adopters, nor do they want to run behind the pack. For utilities just getting into the AMI game, I say begin with what you have readily available.

We all live in an information age with at least two communication media at our disposal at all times. We’re connected through phone lines, TV cable, Wi-Fi, cellular or public wireless and satellite. Most of us have several of these touching our lives at any moment. It makes sense for utilities to use these same media instead of reinventing the wheel.

For many companies, public wireless is a good data backhaul choice for strategic deployment. Cellular network providers invest billions in their networks annually. They are extremely reliable and efficient for transmitting data from smart meters. With public wireless, a utility needs only to ensure a location has cellular coverage. These days it will, with the exception of the most rural service points.

No matter where a utility is in developing its AMI strategy, public wireless allows for advanced-metering installation and data retrieval. These can be used for cost-of-service projects, voluntary time-of-use (TOU) programs, load research and hard-to-read meters. Targeted AMI can be easily and quickly deployed with data coming “home” in a matter of months.

If you’re worried that this technology cannot be integrated into your future AMI strategy, don’t be. Data pulled in this manner from commercial and industrial (C&I)AMI points can be read directly from your meter data management (MDM) system or imported into it. Also, C&I AMI using public wireless backhaul will not be stranded when you eventually decide to roll mass AMI–this technology can simply be overlaid with a mass AMI system in the future.

Historic Perspective

A few years back at Mississippi Power Co. (MPC), we had something called the “power route,” which was a meter-reading route consisting of our wholesale and largest retail customers, that represented more than 60 percent of our revenue. It really wasn’t many meters. Each operating division had one of these routes and customers were scattered throughout our service territory. Problem was, at many of these locations, we had employed fairly sophisticated metering (well, KYZ meters and magnetic tape recorders were state-of-the-art at that time), which we did not let our normal meter readers touch. Our district metermen or meter mechanics were the only ones trusted enough to read these sites. It generally took a couple of days a month per route to read these power routes. If there was trouble with any of those meters just a few days into any billing cycle, the meterman would not find it until the next month’s billing. The result was thousands of dollars could be at risk and many hours spent explaining to customers why their bills were estimated (not a good thing). Additionally, MPC was reorganizing its metering organization and we determined reading this type of route monthly was not something we wanted to support laborwise. So in 1989, MPC began implementing targeted two-way remote reading of these power route customers via public backhaul (analog cellular or POTs) in an effort to reduce labor costs, increase the probability of “good” data and increase billing accuracy by using electronic meters. This advancement enabled us to have the type of reliable data needed to begin developing marketing initiatives and creating innovative rates structure.

Although some utilities have taken similar paths with larger customers, many have not.

And, while there is much more technology available today than 20 years ago, the premise leading to implementing targeted AMI for C&I customers remains valid today: You don’t have to roll an entire AMI system to gain a majority benefit.

The U.S. Department of Energy’s Energy Information Administration offers information encompassing all energy sectors. The most recent year of complete data for the electricity sector is 2006. If you pull down the spreadsheet for all U.S. electricity sales, you can gain an interesting perspective.

While residential customers make up 87.1 percent of the total customer base, they are responsible for only 35.2 percent of MWhr sales and 43 percent of revenue. C&I make up only 12.9 percent of customers but represent 64.8 percent of MWhr sales and 57 percent of revenue.

These numbers show that strategic spot-deployment of C&I customers is a great way for utilities to launch their AMI initiatives and gain a high return on existing resources–absent the risk of going all in on an AMI build-out.

Making the Data Count

Once you deploy targeted AMI, what will you do with the data? Here is an obvious one. Utilities are always seeking ways to forge new partnerships with customers. With a heightened awareness of capacity constraints, rate increases and environmental concerns, consumers, particularly C&I consumers, want to learn more about energy consumption and do their part to conserve and reduce costs. The answer is to provide C&I customers with innovative rates based on time-differentiated data and see what happens. C&I customers are in a good position to utilize usage data and react to time-differentiated energy rates. They are smart folks and will figure out how to save money. And because 12.9 percent of C&I utility customers represent 64.8 percent of energy sales, who best to first target efforts to reduce the present strain on our electrical grid? Additionally, by frequently providing usage data to C&I customers, utilities position themselves as partners, rather than adversaries. This allows customers to choose when and at what price they will use electric energy, rather than just getting a bill sprung on them at the end of the month.

If you’re looking for the best bang for your buck and wanting to move forward with AMI but are afraid of committing (financially or otherwise) to a technology today, consider targeted AMI in lieu of a mass strategy. It could be the right solution at the right time.

Seal joined SmartSynch in May 2005 to lead the company’s software, hardware and firmware development efforts as vice president of engineering. He was named chief knowledge officer in January 2007.

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