by Timothy O’Hara, Infogix Inc.
Advanced metering systems give consumers more control and understanding of how they use electricity. The amount of data that smart meters process, however, quickly can become overwhelming, and relying on humans to monitor information manually to catch and remedy errors is inefficient and ineffective.
Data provided to utilities and consumers can be used to improve customer service through forecasting consumer demands, regulatory compliance and reducing outages. But smart meters have been connected to homeowner and business billing errors, which create unhappy customers and negative headlines that lead to increased regulatory scrutiny, plus losses in utilities’ auditor fees, productivity and public trust.
Big Data, Big Problem
According to two recent Oracle reports, organizations across many industries are not ready for big data challenges. Private sector organizations with $1 billion or more in revenue reported losing an average of $130 million annually because of the mishandling of data, according to “From Overload to Impact: An Industry Scorecard on Big Data Business Challenges.” A second Oracle report based on a survey of 151 North American, senior-level executives at utilities with smart meter programs, “Big Data, Bigger Opportunities: Plans and Preparedness for the Data Deluge,” finds that smart grids are increasing utilities’ data collection 180 times.
Managing Operational Losses
Several studies estimate utilities lose 2 to 5 percent of their revenues as results of information error issues associated with billing and revenue recognition–all preventable operational losses. The major causes are process failures, changes and updates in the reference data, and data quality issues within source systems.
The ability to validate billing independently and automatically is necessary in managing customer data. Software solutions can help by heading off and resolving errors before they spread throughout systems, make it to customers, and before companies incur these operational losses. By eliminating the manual processes and automating information controls, the entire process becomes streamlined and easier to manage and reduces risk and increases customer satisfaction. When considering a software solution to implement, look for a combination of core capabilities, including: flexible information validation rules; balancing checks; detail cross-checking; duplicate transaction detection; reconciliation; and real-time visibility through continuous monitoring and case or exception management.
Meter Data Management
To manage real-time data, utilities can implement a plan for automated information controls. Meter data management systems can be necessary for smart meter deployment and operations, but often they are overlooked. The software platform can receive meter data from one or multiple smart meters, verify and store the data, and deliver the data to utility operations applications such billing, outage management and more. Software solutions can decrease information errors related to billing and increase efficiencies.
Manual Component of Smart Meters
Utilities also can coordinate regular in-service testing, integral to meter accuracy, according to a March 2011 white paper by the Edison Electric Institute, Association of Edison Illuminating Cos. and Utilities Telecom Council. By participating in periodic or sample methods of testing, utilities can learn of issues, especially related to billing. Periodic on-site safety audits and read verification also should be part of the utility’s business practices post-smart meter deployment to designated areas. Before smart meters, a utility employee had to visit to each customer’s premise monthly to read the meter. Also, utilities would check the safety of the electrical service, condition of the meter location, access problems, meter anomalies, hot sockets and the general physical condition of the customer site. Problems were resolved on-site in real time. These practices were necessary to asset and risk management and still should be conducted periodically where smart meters are located.
Sixty percent of consumers surveyed were unaware of smart grids or smart meters, and only 43 percent of these people viewed smart meters favorably, according to IBM’s “2011 Global Utility Consumer Survey.” Sixty-one percent of people with a strong knowledge of energy technology viewed smart meters and smart grid deployment plans positively.
Educating energy users on the basics of energy consumption and ways they can improve their usage will build customer trust in providers. When installing smart meters for existing customers, utilities must notify customers and explain properly why customers will experience a short interruption of service. Neglecting this step can result in angry, disappointed customers. They also must receive timely, correct bills to ensure confidence. By following these practices, utilities can create a more confident, loyal consumer base. A smoother, more efficient operating procedure will salvage some monetary and operational losses as a result of smart meter deployment.
Timothy O’Hara, CPA, ICCA, is an account executive with Infogix Inc. He focuses on identifying, scoping and developing business cases for Business Operations Management Solutions to solve business problems relating to control and risk. O’Hara has held numerous roles within Infogix during his 15-year tenure and is implementing a co-branded certification program in Control Design (ICCA) with the Internal Controls Institute. He has a bachelor’s degree in accounting from the University of Scranton.