Facing a new and deregulated marketplace, utilities are placing bets on what strategies will be most effective in maintaining and enhancing market share and customer loyalty. How will utilities differentiate themselves from others in the provision of a basic commodity, viewed by most consumers as an everyday entitlement? What will keep customers from straying once they have a real choice? Is it pricing? Quick problem response? Valuable service offerings? All of the above?
Deregulation means new business options, but even the old business isn`t standing still. New and old converge and combine synergistically in the move toward automated meter reading (AMR). The Internet is rapidly changing the business landscape surrounding the connection to the home. The use of Internet-based connectivity devices in an AMR solution opens a treasure trove of new value-added service offerings.
Generally speaking, we know that (long term anyway) implementing AMR can save money-both in per-read costs and in more accurate billings. Customer service improves with billing query responsiveness. And deregulation promises to bring new standards and precision requirements along with more complex customer arrangements, such as tiered pricing for homeowners or multiple suppliers using different layers of the same data. For some utilities, these benefits alone provide the justification to make the move to setting up a remote meter reading system.
Access options: proprietary vs. Internet
Many of the existing approaches to AMR take a proprietary device-connectivity approach. They link a single device, the meter, into a network accessible by head-end applications. The infrastructure is based on a proprietary wireless or modem-based protocol/communication technology. Its implementation costs are passed on up front or through long-term contractual commitments. The focus is on a singe application and device-the meter. If the business goal is to simply get more precise and lower-cost reads, a proprietary, single application system may be the appropriate choice.
Other utility companies, however, are increasingly leveraging existing relationships with energy consumers and branching into new revenue areas. If the strategic objective extends beyond the advantages of automated meter reads, proprietary communications and device connectivity technologies may be too limited. The Internet as the communications infrastructure presents an exciting new option.
Internet Protocol (IP) as a communication standard lets you take advantage of any existing Internet access, including shared phone lines and broadband connections such as cable and DSL. A full-time Internet connection can easily be established and re-used simultaneously for telemetry data. There`s no need to install a new infrastructure.
With the explosion of the Internet, IP has become the accepted data networking technology standard, and IP architectures have shown a remarkable ability to adapt to new physical network media as they are created. Its flexibility, expandability and widespread adoption makes IP the communication standard that comes closest to being future-proof when it comes to home connectivity and telemetry. IP-based network connections to the home have also proven able to scale to link systems comprising millions of network nodes.
Once you tap into the Internet, the possibilities continue to emerge. Parachuting in with new services targeted by customer profile becomes a viable option. Linking the sub-metering systems of large facilities or campuses enables a new category of efficiency-enhancing services for commercial customers. And when data transfer and control possibilities can share existing phone lines in a set-up that is non-invasive for the customer, the door is open for everything from demand side management to consumer home security.
With a network infrastructure approach, the in-home network is linked to the wide-area network, and finally to multiple head-end applications. Access is provided to any device on the in-home network from any head-end application. The in-home devices can include the meter, load-control devices, home security devices, appliances, lighting devices and home automation systems.
Seeing the future revenue sources in industrial equipment monitoring and energy management, some utilities with existing proprietary AMR systems are investing in a secondary, parallel access gateway to allow them to interface to other subsystems and offer additional services.
Embedded networked controllers similar to those available in utility meters are appearing in a variety of in-home devices including appliances, light switches and security systems. Connecting all these devices to the Internet gateway means that the homeowner, through a Web interface, could remotely control a heating unit.
Demand Side Management. This becomes a practical reality when appliances are linked to the same data flow that comes from the meter and can be programmed to avoid usage spikes. For example, on a hot day when the air conditioner is operating at extended peak levels, the pool pump shuts off once an established baseline is reached.
Home Automation. This is another value-added service venture that seems particularly ripe for utilities. The home automation industry is anticipated to grow more than 25 percent each year over the next several years. And market research indicates customers are open to the idea of purchasing this type of service from their utility or telecommunications providers.
Home Security. In the multi-service home telemetry model, another natural fit for utilities is home security. For networked customer home, this can be offered at very competitive rates and with enhancements such as the ability for homeowners to remotely pinpoint a problem and have access to information that would inform appropriate action or avoid hefty false alarm response fees. With control points accessed on the Web, customers might be willing to purchase a service that, for example, allows them to disarm the security system to let the neighbor in to feed the cat. Meanwhile, cross connectivity among devices on a network lets the security system alarm trigger additional responses, such as turning on all the lights.
Home Care. A rapidly increasing population of aging adults makes personal safety monitoring a service many will find indispensable. The trend towards home care for the elderly and disabled is yet another reason consumers will be looking at technology to help out where information at a distance can provide assurances.
The future belongs to the utility providers most able to adapt to change. The handwriting on the wall says the ability to get in-home information access through networked devices and make that information available, over the Internet, to a customer who is in a remote area is going to have real value. Utilities are well positioned to provide those services.
It`s not just utility companies, but their future competitors-telcos, security companies, cable providers-who are looking at using the residential gateway as a foot in the door to reach a broad base of consumers. Because whoever owns/controls the gateway/connection into the house owns the option on the wealth of data and services that come with it. Will your customers find it important to be able to monitor the safety of an elderly parent at home alone? To make sure the iron wasn`t left on in the morning rush? Implementing a flexible, Internet-based remote meter-reading solution lets you hold your options open.
Adam Marsh is vice president of marketing at Coactive Networks, a leading provider of commercial and residential gateways for connecting devices, appliances and control systems to the Internet.