The Meter is Running
By James Black, Black & Gorman L.L.C.
Automatic meter reading (AMR) is increasingly the part of the information technology puzzle that fascinates and stirs the imagination more than CIS, AM/FM and SCADA. Once thought to be just a replacement for the two-legged meter reader, these little R2D2 boxes are launching lots of pilot projects around the country. The reason is simple. The meter is the first point of contact with the customer and the greatest market intelligence device a service provider can have. To measure the rate of change in the AMR business, I called Joyce Paschall, executive director of the Automatic Meter Reading Association (AMRA).
Paschall says calls from Wall Street analysts to gauge the AMR business as an investment option have become a common occurrence lately. “They are looking for information about the size of the AMR industry, about the products that are available, about the companies that are providing these products and the utilities that are using them,” she says. The “Street” is expressly interested in companies that are not currently thought of as connected to the meter. They are asking about consolidator companies that reach economies of scale by combining water, gas and electric information technology systems. It seems Enron, UtiliCorp and the Southern Company have their eyes on the individual customer meter. So the word is out–AMR is hot.
But Paschall is already tuned in to that fact. The AMRA`s 900 total members this year represents a 35 percent growth over the year before. Its 10th Annual Symposium, at Chicago`s Palmer House Hilton, Sept. 14-17, will likely draw 1,500 attendees and 100 exhibitors. Paschall says that`s up about 30 percent over the year before.
This stampede underscores the axiom that says you can`t have too much data about your customers. As simply stated in “Marketing 101,” it`s more cost efficient to keep a satisfied customer than to try and win back a dissatisfied one. Today, the more diversified the services a provider can offer, the less likely the customer will go elsewhere for a temporary discount on one of the several services offered. Where better to find out as much as you can about the customer than at the meter? If this sounds vaguely familiar, like demand side management, that`s because it is, only with a lot more at stake than just putting a damper on peak demand loads. This is big science for the marketing department. Defining the customer has become as important, maybe more so, than striving for engineering efficiencies and cost accounting.
If marketing and demand side management are not enough to bring AMR into the spotlight, many customers are becoming sophisticated enough to expect this kind of high-tech interaction with their meter. A number of vendors have given closed loop demos of home energy management systems that rely on the family PC and a connection to the Internet`s World Wide Web. These “wired” homeowners, admittedly a relatively small number at present, want to get on the Web, dial up their own metering system and track everything from the cost of hot water for their morning shower to keeping track of long-distance phone charges hour by hour. But as PCs give way to “thin client” interactive television, it`s easy to see how a smart energy provider could be selling everything from automatic dishwasher detergent to pizza delivery along with electric, gas, water and telecom services.
But the problem with the R2D2 black box is its prodigious output. With 15-minute “reads” being uploaded to a service provider`s facility, it would quickly overwhelm current billing and customer service systems. Most of these reads are useless for anything but a “report by exception” scenario. The answer lies in creating a data warehouse: A relational database with strong object-oriented programming features where data is stored in a “vanilla” format, waiting to be downloaded to the marketing department, business operations, call center or the billing department. In this way, data can be utilized to its maximum potential. With the awesome power of relational databases from Oracle and/or Sybase, companies can store and utilize mountains of customer data. And it all starts at the meter with AMR.
That`s why it is important to keep a close eye on Wall Street, as they keep a close eye on the new non-traditional energy and telecom service providers. These energy and service providers, in turn, must keep their eye on the customer. The meter is running.
James D. Black is a founding partner in Black & Gorman L.L.C., a communications firm specializing in information technology. Black is a well-known industry writer in the field of GIS and is currently the education director for the A/E/C Systems International Conference and Exhibition. He can be reached at firstname.lastname@example.org (e-mail).