By Teresa Hansen, editor in chief
Advanced metering lets utilities connect with customers in ways that were impossible a few years ago. Typically, utilities have used information collected at the meter through automated meter reading (AMR) and, more recently, advanced metering infrastructure (AMI) installations to provide customers with better usage and billing information. This type of information is useful, but it provides only a fraction of the benefits available to utilities through advanced metering. Information obtained through the meter can be used to build relationships between utilities and customers and to improve customer service and utility operations. It isn’t enough, however, to simply collect data; collecting the right data and managing it efficiently are imperative to obtaining all the benefits available through advanced metering systems.
Utility executives are expecting AMR and AMI technology to keep customers informed and satisfied as electricity rates rise and supply declines. Many executives, including Michael Garrett, Georgia Power’s president and CEO, understand the importance the technology can play.
“In more than 40 years in this business (electricity generation and delivery), I’ve never seen a technology with more potential than AMI,” Garrett said recently during the opening session of Autovation 2008 in Atlanta.
Robert Geneczko, vice president of customer service at PPL Electric Utilities, spoke during the same session and agrees.
“We have an opportunity at this stage in the game to change our industry’s history,” Geneczko said.
Metering technology will allow utilities to reach out to customers and educate them, he said. Educating and ultimately satisfying customers will be important for many reasons, including rising energy prices.
PPL has big plans for its expanding AMI system. Electricity-generation price caps enacted in PPL’s service territory (eastern Pennsylvania) in 1998 are scheduled to be lifted in 2010. Geneczko expects residential rates to rise 34 percent as a result. PPL says the technology will help satisfy customers when price caps are lifted.
“We plan to be our customers’ energy advisor when this happens. We want to help them understand how they use their energy,” Geneczko said. “Meters place an electronic eye on 1.4 million customers.”
Not all customers will want to know the details of their electricity usage, but some will, said Karen Blackmore, research director with Energy Insights, an IDC company.
“Some consumers will be interested in daily usage to help them understand when and why they use more energy on different days,” Blackmore said.
Information such as real-time consumption and time-of-use rates can be delivered through an online system, interactive voice-response technology via the telephone, texting to PDA devices, or other Web 2.0-based tools.
Geneczko said PPL expects to save money by implementing AMI, but the “ultimate justification” for using advanced metering technology is customer satisfaction.
In addition to customers, several departments within a utility can benefit from information collected through AMR or AMI. Billing and customer service departments benefit from having detailed usage information at their personnel’s fingertips, allowing them to more completely address customer questions and concerns. Back-office customer service also can use the information to help revenue assurance by monitoring tamper and usage trends from customers.
Other departments not directly related to billing and customer service benefit from information gathered at the meter. Michael Markides, a senior research analyst in the Power and Energy Group with IMS Research, said the forecasting department can benefit from an efficient cycle of data throughout the network, not only from the endpoints with smart meters.
“This enables better management of power delivery to all customers, thus minimizing the need to get power from off-network purchases,” Markides said.
A utility’s engineering team can benefit from an AMI system that delivers well-managed data, he said. Tie-in points and substations can be better monitored in real time, and engineering teams can manage the distribution system more efficiently.
Blackmore agrees. She said that “segments of the utility value chain” other than billing and customer service such as generation, power delivery and shared services, can benefit from data collected at the meter. Generation can use data for forecasting and load analysis, along with demand response quantification. Delivery can use data for transformer sizing and distribution design. And, shared services can use the data in rate analysis, energy-efficiency usage analysis and settlement.
Meter Data Management’s Role
To get the full benefit of an AMI installation, an effective meter data management solution is a must.
“The data collected is only as good as the meter data management solution,” Geneczko said. “It must be robust.”
An Autovation panel session echoed that. The panelists, all meter data management experts from major metering and meter data management companies, said that a centralized system for processing, storing, managing and leveraging large amounts of meter data is necessary. The system should also be able to process real-time interactions.
Keith Jones of eMeter said that meter data management should focus on the business process, not just the data. Any utility using AMI should have an integration platform linking AMI systems to the utility’s business systems, he said.
Energy Insights thinks the best way to store meter data is in a repository that can collect metering data from any customer type through varying communication methods from many meter systems, Blackmore said.
“A meter data management system establishes the “Ëœsystem of record’ for meter data,” Blackmore said.
Because it is often the system of record, most experts think the data collected should be stored at least 13 months, and some utilities plan to store it as long as 24 months.
In a full-scale AMI deployment, it is common for a utility to collect hundreds of thousands of data readings each day. This many records stored as long as two years is a lot of data for a customer service system to manage. Data storage and retrieval issues are huge concerns, especially for a utility’s IT department.
“This is an area utilities need to understand,” Blackmore said. “Costs associated with large storage and fast retrieval can greatly impact an IT department.”
Some utilities have put together a business analyst or program management type of office that facilitates and orders requests for data and upgrades and answers questions on the meter data management system.
Most of the Autovation panelists also believe it is important to involve the IT department and set up an internal organization to be responsible for the data. They said the utility should determine which internal organizations will be involved in the system implementation and operation, and ensure those organizations are involved upfront and are committed to the project.
A team approach with departments such as regulatory, IT, delivery, load research and customer service is needed, Blackmore said.
“Utilities also need to be in it for the long haul, as it can take five years to fully realize the benefits of many AMI projects,” she said.
Date Collecting and Sorting
Most of the panelists said that often utilities and their internal organizations don’t know initially what information will be beneficial and what information they should collect. Debbie Henderson, business development executive with OSIsoft, recommended that utilities collect data even if they don’t know what they are going to do with it yet. Blackmore agrees.
“Taking an approach that the data can help link processes and be used to change how work is performed today will give utilities a chance to transform existing operations,” Blackmore said.
Billing, tariff, time-of-use pricing, and connect and disconnect are areas in which utilities typically find necessary justification to get systems approved and installed. Many in the industry say the real value of AMI, however, will come from using the information to improve distribution system operation and efficiency. A 2007 Energy Insights survey revealed that utilities are interested in improving operational efficiency as well as increasing customer satisfaction and meeting regulatory requirements. Operational efficiency areas that stood out were grid reliability and outage management, Blackmore said.
“Some utilities are using AMI data to determine outages much faster than waiting for customers to call them,” she said. “They can then decide where and when a service truck needs to roll or if they can use other switching technologies to take care of the outage.”
Utilities’ load research departments are also eyeing AMI customer-usage information to help develop demand response programs, distribution design and load analysis.
Smart Grid Strategies
Utilities and industry experts know that AMI benefits come from smart meters and the smart grid, Markides said. An infrastructure connected in real-time improves overall power-delivery operations.
Utilities envisioning the intelligent grid are studying advanced analytics to tie data such as AMI with weather data, customer-usage patterns and load forecasting to better manage the grid, Blackmore said.
“In the future, as demand side management and other energy-efficiency programs grow and as plug-in hybrid electric vehicles (PHEVs) become more ubiquitous, the need to know which energy supply resources are usable and when they are available will be of great importance,” she said.
Where utilities begin upgrading their systems is the big question for vendors, Markides said.
“Will it be with meters, will it be with the meter data management system, or will it start with the grid?” Markides said.
With so many solutions and vendors, the key will be who can deliver solutions at the system level and provide a product for utilities that can immediately benefit all departments.
“The smart grid is a bit cloudy right now,” Markides said.
A few utilities will try, and within a few years a systems approach will be on the market. That means utilities will start overhauling their entire delivery methods, beginning with upgrading the grid, centralizing data needs and collection, and implementing smart meters for customers, Markides said. He thinks the missing piece is legislation, which will affect how utilities adopt technologies. For example, he said that some utilities will try to get a “pass-through” for implementing smart meters. That would allow consumers to absorb some of the cost. If such legislation passes, then smart meters would be the first step for a utility wanting to overhaul its entire infrastructure, Markides said.
Whatever utilities decide to do, PPL’s Geneczko said they need to get started.
“The time to invest is now,” he said. “Do it for your customers.”