By Michael Wiebe, MW Consulting
August 30, 2002 — Utilities, employees, customers and shareholders need ‘fixed network’ AMR today. We have supported utilities in AMR projects that have gone to implementation involving over 5 million meters with every business case, reflecting positive stakeholder benefits as measured in net present value, EPS, customer satisfaction and PUC approval.
Fundamentally, our business case projects–including PPL Electric Utilities, Exelon (PECO Energy), Duke Energy and others–have demonstrated that fixed network AMR is a strategic tool creating benefits on a corporate scale by improving numerous processes to yield ‘hard’ quantifiable benefits acceptable to a CFO.
When seen as a corporate tool, AMR is about improved customer satisfaction, enhanced asset management, increased operational effectiveness and much more. However, the business case for this view is complex and the historical view of AMR has focused on the issue of reducing meter-reading expenses because it is the easiest to document. But, this approach misses many valuable benefits. Meter reading automation tools like mobile (MAMR) and off-site meter reading (OMR) are tactical tools for a departmental need.
This does not mean that partially automated methods like MAMR and OMR are bad ideas but as an island of technology they do not enable strategic benefits. A sound business case will quantitatively identify the best strategy.
AMR technologies continue to emerge, evolve, mature and disappear but surprisingly little change has actually taken place in over a decade. Estimates of investments by over 100 firms in AMR R&D over the last twenty years range as high as $3 billion. However, the stability of AMR technology is amazing when comparing what has actually been widely deployed to the changing face of technology since 1980 (see table below).
Interestingly, amid all the turmoil of new fixed network AMR aspirants over 20+ years, three firms have thrived: DCSI, Hunt and Schlumberger. While Itron owns the OMR and MAMR markets, it is not included in the fixed network list as it has not achieved 1 percent penetration with its two fixed network deployments. Our analysis shows that no firm failing to capture a 1 percent market share within 5 years of introducing an AMR, MAMR or OMR product survives other than as a small niche market player in that market.
DCSI, once viewed as only a rural solution, has recently upgraded its technology and it now supplies AMR systems for urban, suburban and rural needs. While Schlumberger still leads the industry in units booked, it has had to fight hard with DCSI in the last year for market leadership with DCSI actually booking more new business than Schlumberger. Hunt has carved a niche with the NRECA market but it too is facing new competition from DCSI.
A new group of companies are emerging with a diverse array of new technologies including CATV/RF Internet, hybrid RF/PLC, peer-to-peer radio and public network radio offerings from Eka, eMeter (Echelon), Nexus and StatSignal among others. In addition there is rapidly growing specialty group focusing on AMR for C&I customers by using SkyTel and CDPD public radio networks. Of these Comverge, E-Mon and SmartSynch are the leaders in the use of public networks to enable surgical AMR deployments for high revenue customers.
Wiebe is president of MW Consulting located in Winnipeg, Boston and Providence. The firm has 15 years of AMR project experience with over $700 million in AMR projects with PPL, PECO and other major clients. He can be contacted at 404-915-4991 or email@example.com.
This article appeared in Electric Light & Power, September 2002. To read more, visit http://uaelp.pennnet.com/search/ShowIssue.cfm.