Utilities Find Savings in AMR for Transient Customers

By Garrett Johnston

Although utilities often find it difficult to prove that a large-scale automated meter reading (AMR) deployment provides an acceptable return-on-investment, AMR has long been successful for niche applications. One of the most effective uses of AMR is for transient locales, such as apartments in college towns, where constant customer turnover makes manual meter reading expensive.

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Using AMR in transient areas can provide a proven and relatively concrete payback. Some utilities use AMR technology to save hundreds of thousands, even millions, of dollars to read meters at apartments or other traditionally transient locales.

Many utilities figure apartment residents move about 1.5 times a year. And many AMR systems can provide on-demand reads, enabling utilities to obtain a customer’s last meter reading without sending an employee to the site, thus improving efficiency and decreasing costs. Many AMR systems also can provide a virtual turn-on/off feature that allows utilities to monitor usage at unoccupied sites. At these locations, an alarm goes off when usage exceeds a predetermined level.

The cost of manually reading meters at apartments can be astounding. Each time a resident moves, utilities have to dispatch a meter reader in a truck at a cost of about $10 to $20 per read. That can be expensive, especially for utilities in college towns where apartment dwellers can make up a significant percentage of the population—as much as 35 percent in at least one instance. For a utility with more than 3 million customers, that can mean there are almost 1 million read-ins/outs during the year.

It’s no wonder, then, that the use of AMR for read-ins/outs at apartments appears to be on the rise. Only about 3 percent of utilities currently use AMR to turn customers on/off, a figure that has remained steady during the past three annual surveys of more than 100 utilities conducted by Atlanta-based research firm Chartwell Inc. However, about 30 percent of utilities plan to use AMR to reduce the cost of collecting read ins/outs at apartments or other transient residences, according to Chartwell’s 2002 survey of 115 utilities.

In 1998, Nashville (Tenn.) Electric Service (NES) estimated it spent more than $1.9 million to collect beginning and end-of-service reads from the 75,000 apartments in its service territory. The utility has since installed the MicroNetwork from Spokane, Wash.-based Itron Inc. on 23 apartment complexes and about 13,000 meters in NES’ service territory. NES eventually plans to install the technology on all apartment meters.

The system has helped NES recently save about 600 off-cycle trips per month. Figuring that the cost of each special read is about $16, the utility estimates it saves about $9,600 per month.

NES is not alone. Kansas City

Power & Light has eliminated at least 100,000 off-cycle reads a year by receiving on-demand reads from the SchlumbergerSema fixed network implemented in 1998. The utility estimates each off-cycle read costs $10 to $15, meaning the utility saves about $1 million to $1.5 million a year.

Wireless fixed networks and powerline carrier systems appear to be the most popular technology choices for this application. Apartment reads can help cost-justify two-way AMR systems, and eliminating special reads is often a large part of the business case for utilities installing AMR systems on all or most of their meters.

Fixed networks—which include wireless and powerline carrier technologies—were most often mentioned by utilities in Chartwell’s 2002 survey for decreasing off-cycle reads.

Nashville Electric chose Itron’s MicroNetwork, which is a fixed network that uses RF communications to collect data and cellular lines to send data back to a host processor. No other system could provide a similar RF technology on a small scale, according to utility officials.

Although wireless fixed networks can provide many value-added services—including off-cycle and on-demand reads—system-wide fixed network.installations can cost tens of millions of dollars. Each utility needs to figure out if a large-scale deployment is best for them.

Telephone solutions have a mixed record at best. While telephone lines are readily available at apartments, phone-based AMR installations often are expensive and problematic because of installation costs and phone line accessibility. Phone can be expensive for surgical applications—at about $30 a month per line.

By comparison, Nashville Electric Service pays just $15 per month for cellular access used to transfer data from its MicroNetwork to central processors. NES estimated the installation cost at one apartment complex was about $34,000 with a return-on-investment of just 15 months.

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Powerline carrier systems also help utilities, especially those in rural areas, save money. Cass County Electric Cooperative in Kindred, N.D., is installing DCSI’s two-way powerline carrier system on 12,000 meters. The utility estimates it could save between $20,000 and $25,000 through remote collection of on-demand reads for move ins/outs at apartments and other transient locations. The co-op’s meter readers typically spend an average of three to four hours a day on off-cycle reads.

South Central Electric Co-op in Lancaster, Ohio, is using the one-way Hunt Technologies’ Turtle system to save the utility about $10 to $12 per off-cycle read. That estimate is based on: half-hour drive time for each off-cycle read, $18 per-hour wage of meter readers, employee benefits, gas costs and truck maintenance.

Some utilities are looking to use more basic technology. Mobile systems can help utilities save money by collecting more than monthly reads. Northeast Utilities in Hartford, Conn., has saved about $250,000 a year using mobile and handheld systems for off-cycle reads for investigations and move-ins/outs.

Northeast Utilities uses its mobile system for read-ins/outs. When the utility does an off-cycle read for one customer, it collects and keeps the read for all other nearby customers. The utility then can use that data if a customer at one of the nearby premises moves out within the next few days.

Northeast Utilities has found this to be cost-effective, even if the meter is read a few days before the owner actually moves out. The cost of energy used during those days would be less than the cost of a special visit, according to the utility.

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Prepaid metering is another alternative to help reduce the cost of reading transient locales, though the price of prepay systems can be a large obstacle to overcome. When apartment owners provide prepaid cards, rental customers can move in quickly because they simply put money on the card to receive power instead of signing up through the utility. When a customer leaves the premise, the utility does not have to send an employee to obtain a final read.

Phoenix-based Salt River Project has used a prepayment program to reduce the utility’s cost and number of disconnects/reconnects. While prepay systems are traditionally aimed at low-income customers, SRP—which has the nation’s largest prepaid metering program with 28,000-plus customers—also uses its powerline-carrier based system for seasonal customers.

The ability to provide an actual, or hard, turn-off could further increase AMR usage for transient customers, when the price level for such functionality becomes more affordable.

For now, utilities with an abundance of transient customers should consider using remote meter reading technology. When used for transient locales, AMR can provide significant savings that can help justify installation of the technology—either for niche or large-scale applications.

Garrett Johnston is a managing editor/research analyst for Chartwell Inc., an Atlanta-based research firm focusing on the utility industry. He is editor of Chartwell’s AMR Research Series, a twice-monthly publication focusing on the automated meter reading industry.

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