AMI Gets Fast Start, Still Many Lengths to Finish Race

By Kathleen Davis, Senior Editor

Advanced metering infrastructure (AMI) describes the melding of smart grid, two-way technology and the standard meter that’s been around since electrification began. With AMI, the meter knows a lot more than just power used–it knows what power should be used, what power shouldn’t be used, what the price of that power is at the moment, what the utility needs turned off and how the system is feeling and faring.

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But for all the hype about AMI and its benefits, adoption isn’t as prevalent across the United States as all the talk might lead advocates and consumers to believe. There are some large pilot programs and a number of utilities considering the benefits, but actual AMI penetration remains at less than 5 percent, according to the Federal Energy Regulatory Commission (FERC)–although that number is expected to grow.

FERC’s AMI report

At the end of 2008, FERC released its latest annual Demand Response and Advanced Metering Survey. According to the findings, AMI has made progress but remains a small number of the overall metering infrastructure.

The numbers indicating AMI penetration–which FERC rates as advanced meters vs. number of installed meters total–have reached about 4.7 percent for the United States. Although that number is low, FERC sees this as “a significant increase from 2006, when advanced metering penetration was less than 1 percent.”

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The report noted that AMI market penetration has increased substantially in nearly all regions since 2006, with Florida seeing the largest leap (from less than 1 percent advanced metering penetration in 2006 to 10.4 percent in 2008).

Market penetration differs by type of organization, according to the report. While cooperatives (co-ops), municipal utilities, investor-owned utilities (IOUs), public utility districts and federal utilities all show increases since 2006, the penetration level achieved by co-ops in the past two years is “particularly impressive” to the commission.

Co-op’s advanced metering penetration increased from 3.8 percent in 2006 to 16.4 percent in 2008. Survey respondents report having deployed 6.7 million advanced meters that are currently being used for advanced metering.

[Editor’s note: The 2008 FERC survey asked respondents to identify meters being used for advanced metering. Unlike the 2006 FERC survey, however, the 2008 FERC survey does not ask respondents to also identify meters capable of being used for advanced metering. In the 2006 survey, that distinction was not made, leading to statically inaccurate results, according to FERC.]

Installed advanced meters increased by approximately 5.8 million from the 2006 to 2008, the FERC survey states. Co-ops and IOUs cover 5.4 million of those, with co-ops having 2.4 million advanced meters (or about 41 percent). IOU AMI increased from 0.2 percent penetration in 2006 to 2.7 percent in 2008. Municipal entities show an increase from 0.3 percent in 2006 with approximately 43,500 advanced meters to 4.9 percent in 2008 with 771,660 advanced meters (see table on page 53).

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With the smart grid initiatives at the Department of Energy and the money invested in AMI from the administration’s stimulus package, AMI market penetration is expected to grow substantially in 2009, according to a number of smart grid and metering vendors. Large AMI pilots such as Energy Smart Miami appear to be a good indication of that growth.

AMI Pilots and Programs

Miami Mayor Manny Diaz announced the Energy Smart Miami program in late April 2009. The program, set to use federal economic stimulus money for at least part of the funding, is one of the largest holistic smart grid initiatives to date and will deploy more than a million advanced meters.

“The Energy Smart Miami Initiative is an investment in the future of our city, our residents and our neighborhoods, and is an important step toward creating the green jobs of the future and building a clean energy economy,” Mayor Diaz said during his press conference announcing the program. Joining the mayor at Miami Dade College’s downtown campus for the announcement were FPL Group Chairman and CEO Lewis Hay III, GE Chairman and CEO Jeffrey R. Immelt, Cisco Systems Chairman and CEO John T. Chambers and Silver Spring Networks Chairman, CEO and President Scott Lang. FPL, GE, Cisco and Silver Spring are all partners with the city of Miami in this project.

Contingent on federal support, Energy Smart Miami could begin later this year and be completed by the end of 2011, according to FPL.

With this project, advanced meters will be installed in more than 1 million homes and most businesses in Miami-Dade County. Over the next five years, FPL intends to expand the project to a total of more than 4 million homes in Florida. The cost of expanding outside of Miami-Dade County represents a $500 million investment in addition to the $200 million proposed in support of Energy Smart Miami.

“Through Energy Smart Miami, FPL will significantly accelerate and expand our capital investment program to help Miami-Dade County customers more quickly realize the benefits of an intelligent electrical infrastructure,” said FPL Group’s Lewis Hay. “However, Energy Smart Miami represents the beginning, not the end, as it is the cornerstone of a $700 million investment in smart meters to every residential FPL customer in Florida.”

As FERC noted, Florida has seen the biggest leap in AMI adoption, but other areas of the country are not far behind. AMI pilots and programs are starting up across the nation, with the largest concentrations (after Florida) in California and the northeast.

In late March, Connecticut Light & Power (CL&P) touted a sign-up sheet with 3,000 customers for its Plan-It Wise Energy Program, a voluntary rate pilot program to test residential, commercial and industrial customers’ interest in time-based rates and smart meters. The pilot program, approved by Connecticut’s Department of Public Utility Control, is scheduled to run from June 1 through Aug. 31.

“There’s heightened interest to begin the development of a nationwide digitized smart grid that will improve energy efficiency and renewable energy management,” said Raymond P. Necci, CL&P’s president.

Some 1,500 commercial and industrial customers from throughout CL&P’s service territory are participating. The other 1,500 are residential customers from the cities of Hartford and Stamford. Some customers have been chosen to test an energy orb, which alerts the customer of a change in electric rates by changing color.

In mid-April, California utility Pacific Gas and Electric Co. (PG&E) announced it had installed 2.3 million advanced meters, more advanced meters than any other utility in the nation, according to PG&E.

Labeled the SmartMeter program, PG&E began installing the meters in 2006. By the end of 2011, PG&E will have installed 9.8 million advanced meters for all customers, including 5.3 million electric and 4.5 million gas meters.

“The SmartMeter program puts in place a foundation that will enable us to reach new levels of customer service and operational efficiency,” said Helen Burt, senior vice president and chief customer officer at PG&E.

As more stimulus money becomes available and the smart grid continues to be at the forefront of industry thought, industry experts, executives and government leaders expect utility announcements of advanced metering pilot programs to grow significantly through the end of 2009.

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