The Way is Clear for Cost-Effective Rural AMR

The Way is Clear for Cost-Effective Rural AMR

By Bob Russ, Whisper Communications

Conventional wisdom says that AMR isn`t cost-effective in rural, agricultural and light suburban/small-town applications. But then conventional wisdom once said the world would only need mainframe computers. Likewise in AMR, a “wisdom barrier” has been shattered.

Innovative new technology enabling rural utilities to cost-effectively apply AMR to virtually 100 percent of their customers has arrived. And with AMR as an “anchor tenant,” now they`re in a position to migrate to value-added services where incremental revenues justify the incremental costs.

Early examples are field trials and rollouts, particularly one with KN Energy (Scottsbluff, Neb.), as well as with PG&E, LILCO, PGE, SoCal Gas and Brooklyn Union. These are possible by taking advantage of a unique combination of capabilities and architectural features which are enabled by a true, two-way, cost-effective and flexible technology.

In a key rural example, KN Energy is taking advantage of this new technology which includes not only architectural features described later, but many others. These include migration from AMR-only applications to advanced AMR energy applications with value-added services such as wireless Internet, long-distance telephone and direct broadcast satellite distribution. As a result of recent business developments, AMR breakthroughs will also be able to migrate from mobile solutions using hand-held and drive-by approaches to fixed-base radio solutions without obsolescing the equipment at the meter.

Acknowledged Service

Two-way technology allows rural utilities in particular to have “end-to-end acknowledged service” from each meter through a repeater, next via a base station and finally through any WAN to the utility. With acknowledged service, a utility is assured that all meter data, down to time-stamped, five-minute data from each meter, is secure and has not been lost. Naturally, in any wireless-based system, some packets don`t get through. But in a fully symmetrical, two-way system providing frequent and equal data transfer in either direction, packet absence can be tracked and timely follow-up transmissions can take place.

Contrastingly, in a one-way system, or any system which has one of the links which is one-way, the meter interface has no way of knowing whether or not the last meter read was received.

Here`s an example of a scenario perhaps five years from now. We`ll say a utility requires 15-minute time-stamped interval data from 50 percent of its electric and gas meters. Although 15-minute data from so many customers may seem far-fetched, utilities are slowly coming to the conclusion they must perform tariff-rate optimizations, non-rate payer-subsidized DSM and meter aggregation using such high-resolution time intervals amongst all meters. If they do not, particularly for their commercial and high-end residential customers, their competition will. By offering the kind of energy services and savings made possible by such telemetry first, competitors will “cherry-pick” a utility`s most profitable customers.

Two-Way RMI In Action

Our example utility will experience high losses of information using a one-way system due to unacknowledged packet absences caused by intermittent interference or network problems. So, one-way system losses will hinder service and open the door for competitors. Using a true, two-way system will help keep the competition at bay.

For two-way technology to work, it must be integrated into all three utility meters–electric, gas and water–for both commercial and residential applications. When a remote meter interface (RMI) is retrofitted to a gas or electric meter, it automatically upgrades that meter to the equivalent of a time-of-use meter in time-stamped intervals as finely resolved as every five minutes.

An additional feature of two-way technology is its ability to interface to any WAN through a simple serial interface. This allows utilities to perform cost tradeoffs and territorial availability and least cost routing analyses amongst more than 20 different WAN providers.

This “WAN independence” benefits utilities because they aren`t locked in to any single WAN solution. In fact, utilities can take advantage of the intense price competition which exists in WANs today and the even stiffer price competition which will exist in the near future as cellular digital packed data, personal communication services and low earth orbit satellites become fully installed.

The Payback Picture

Using today`s published prices for RAM`s Mobitex (non-negotiated), a meter read can be accomplished for under $0.001/read, and using Metricom`s Ricochet, an entire month`s five-minute meter reads can be accomplished for less than $0.03/month. Particularly appealing is that the installation and maintenance costs of these WANs doesn`t have to be borne by the utility but are covered by the WAN provider.

In KN Energy`s case, it chose a combination of Ricochet and Whisper which enabled it to offer a seamless migration path from AMR to unlimited monthly use of wireless Internet access. It took less than three weeks for KN Energy`s engineers to interface the two networks together and be up and running in the field.

Having a WAN with relatively large bandwidth also lets KN Energy offer new services over time, many of which may not even yet been dreamed of. But equally important, if in five years new services demand an even higher speed WAN backbone, it could substitute the newly chosen WAN at the base station master level, leave the rest of its network intact and offer higher data rate services over the new WAN. In this respect, newer systems lend themselves well to “future proofing” a utility`s communication investment. Figure 1 shows how AMR and value-added services build off multiple WANs.

Reach Out and Read Someone

Another key feature of new, two-way technology is its relatively long range and high speed communication links between base station masters (BSMs) and base station repeaters (BSRs).

By using a frequency hopping spread spectrum approach, transmissions at up to 1 W of power in combination with a gain antenna can provide 4 W of effective radiated power (ERP). Some of the primary advantages of frequency hopping designs are that they have excellent noise and interference rejection because when they transmit, all of the energy is sent at only one frequency vs. being spread over many megahertz of spectrum. Then it “hops” to the next frequency for the next communications packet. This allows BSR placement wherever more range is required or where the physical circumstances require higher ERP such as in a radio shadow, over a ridge or in a basement of a multi-unit building communicating to dozens of electric, gas and water meters.

The architecture of two-way technology is centered around what`s called a “WAN cell.” At the center of each WAN cell is a BSM which communicates through a WAN back to the utility. A BSM typically communicates with between 10 and 50 BSRs, each of which might be from a half-mile to as much as five miles away depending upon customer density, terrain and other factors. Each BSR is sized to handle more than 200 RMIs communicating every five minutes. In this way, a WAN cell can often cover 25 to 50 square miles in relatively flat rural/agricultural/small-town environments and is sized to communicate two-way to several thousand points every five minutes.

In addition to the high transmit power link between BSMs and BSRs, RMIs are available in three power levels (low, medium and high) which allow for system optimizations and tradeoffs between adding a BSR to a remote cluster of low-power meters or placing longer range, higher-power RMIs at those outlying meter locations. RMIs can be fully integrated into a two-chip implementation as a full digital and radio-integrated circuit.

In addition to deploying RMIs in a network, other value-added service-oriented devices can also be deployed such as sub-metering, equipment diagnostics, thermo-stats/messaging units, telemetry (e.g. temperature or serial ASCII information) and even gateways to other LANs. These are illustrated in the figure (left).

As part of PG&E`s two-year, ongoing Energy Information Services trial, some of these value-added service products have been operating to include a gateway between the Whisper system, trade name of the two-way system described above, and CEBus power line carrier, an emerging North American standard.

Ultimately, simple economics in the marketplace will drive the best solutions for particular situations. There is no “one right solution.” For most utilities, rural or otherwise, looking at the economics of installing a two-way communications network connecting their customers, the financial models strongly hinge around several key contributions and cost metrics. On the contribution side, there`s AMR savings, change of service savings, theft savings and customer-retention economics. And for the longer term value-added services issues on the cost side, there`s the total installed system cost per point.

Depending upon whether a utility includes fully burdened cost in their AMR savings calculations will yield AMR savings in the range of $0.50 to $1.00 per month and much higher for some rural applications and hard-to-read situations. Change-of-service savings can additionally represent $0.30 to $0.60 monthly savings while theft can also represent $0.40 to $0.60/month savings based on the assumed ability to detect a half percent of total lost revenues through “smart” analysis of 15-minute interval data.

Regarding the cost of residential customer retention (the commercial numbers are much greater), if the customer churn and recapture rates that the telecom business experienced are used, the value in retention works out to between $2.00 and $5.00/month on average.

Finally, value-added services can and will take many forms ranging from energy plans made possible by interval data to home automation and security to financial services and other bundled “non-traditional utility” services.

The total installed system cost per point includes both the hardware and direct labor to retrofit a radio in the field (including any meter shop recalibration required for electric meters) plus the hardware and installation cost of the communications infrastructure all divided by the total number of points serviced. When the communications infrastructure cost is included, it often adds 50 to more than 100 percent additional cost over and above that of the meter interface alone. But with the flexibility to choose between multiple WANs, new technology solutions as outlined here can provide two-way capability on a total installed system cost per point of between $75 and $100, depending upon the specific mix of urban, suburban or rural coverage.

Using appropriate combinations of the contributions and total installed cost described above yields payback numbers for most applications in the three- to five-year range excluding value-added services and customer-retention estimates. Based on such payback, a mid-size combination utility is now preparing to cover more than 15,000 square miles of utility territory for both AMR and value-added services.

Looking Forward

Finally, the level of hardware integration is on a migration path which should allow lower price points as volumes increase and time elapses. Over the next two years, many utilities will make bold moves to position themselves away from the FUD-based (fear, uncertainty and doubt) behavior that many are currently experiencing to more competitive, aggressive and calculated risk-taking behaviors that will be required in the future.

It`s of life-and-death importance that utilities maintain and enhance their customer relationships by establishing two-way communications thus maintaining and even growing their current revenues and profits. Proven technology solutions, which are economical in even rural and small-town AMR environments, now exist.

Author Bio

Bob Russ is co-founder and a member of the board of directors of Whisper Communications Inc., a Sunnyvale, Calif., utility industry provider of “True-2-Way” fixed-base RF communications technology for AMR and value-added services.

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AMR and Value- Added Services

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