Bringing the Complete AMI Advantage to a Broader Group of Utility Customers

The benefits most often associated with an AMI and AMR investment are documented and include:

• Reducing the operating cost associated with reading and preparing a customers monthly bill;
• Improving the accuracy of billing information by:
  - Reducing the number of estimated meter reads,
  - Immediate validation and verification of the accuracy of current usage information,
  - Verification that customers are indeed o the appropriate rate schedule; and
  - More timely identification of potential metering problems;
• Early identification of potential revenue integrity issues such as theft; or in the case of a water utility, improved identification of system leaks or improper customer usage (i.e. night time watering of lawns during periods of restrictions);
• Verification of the efficacy of the Utility’s load management programs; and
• An overall improvement in customer satisfaction as the utility is now able to provide customers with better information concerning their usage and cost patterns.

More advanced benefits of AMI and AMR investments comes from integrating AMI and AMR information with other utility operating systems to improve overall management and operation of the utility system. These benefits may be derived from:

• A better understanding of customer usage characteristics; which can then be used in a predictive manner to:
  - Properly size distribution system infrastructure such as substations and feeders,
  - More accurately identify when existing equipment might be nearing the end of its useful lifetime and may need to be replaced (based, for example, on the number of times and duration that operating limits have been exceeded), and
  - Accurately predict the intraday peak demand and timing associated therewith. This can, then, be used to improve the operation of the generation and transmission system to insure adequate supply, reduce cost and minimize the risk of being short of supply;
• More accurate (real time) characterization of the operating condition of the distribution network that can result in:
  - Earlier identification that an outage has either occurred or is imminent on the system;
  - Improved ability to locate (geographically) where an issue may have occurred (which allows the Company to dispatch line crews directly to where the problem may have occurred);
  - Improved verification of restoration of customer service; and
  - Improved control of what is happening on the distribution systems either directly through the system SCADA or indirectly through management of customer demand.

The potential benefits from the above are significant. One customer with a fully functional AMI/AMR deployment that was fully integrated with the utility’s Outage Management (“OMS”) and other systems was able to achieve up to a two to three hour improvement in customer outage and restoration notification which was attributable directly to the AMI deployment used in conjunction with an enterprise-wide MDMS.

The key to being able to realize the maximum benefits of AMI is being able to deploy a MDM system that is open (or non-proprietary) and can access, process and respond to information from a heterogeneous population of meters and other devices that are deployed across the system.

The fact that there is considerable current activity in this industry means that a certain set of customers has identified that benefits of accessing the additional operational, engineering and financial information (in addition to simple customer consumption information) that are associated with an investment in AMI and AMR can more than out weigh the necessary investment.

However, the majority of the companies that are currently actively seeking to make an investment in a full scale AMI/AMR deployment are the large (>1,000,000 meter end points) utilities.

Does this imply that the benefits of a fully functional AMI/AMR deployment (and therefore the myriad of benefits) are out of reach to customers on systems smaller than this?

Fortunately, the answer to the above question is probably not.

There are certain aspects of an AMI/AMR deployment (such as metering) that are relatively independent of the number of meter end points that a specific utility has. As meter technology improves, as new entrants enter the market and as production of this equipment increases, the cost point will be reduced and the meter functionality will effectively become a commodity.

Communications infrastructure is somewhat different than metering technology. Certainly there are advantages associated with having the largest number of devices concentrated within an identified communication network. Yet, while it may never be cost effective to deploy a wireless mesh system to support a 100 end point installation there are current practical solutions that make it cost effective for installations of less than 250,000. What is more, there are other communications technologies (PLC for example) that mitigate this effect. Again, as metering technology improves (for example: increased data storage at the meter that can be downloaded on a less frequent basis) it becomes extremely practical to use PLC or drive by technologies to support AMI/AMR even in the most rural (least dense) settings.

What about Meter Data Management System (“MDMS”)? Here the solution requires a bit more creativity and flexibility. Again, there must be careful consideration by any entity (large or small) not to select a closed (or proprietary) solution. Second, there can be significant costs to integrate the MDMS with legacy software systems such as (Customer Service System, Billing System, Outage Management System, Work Management System, Asset Management System, etc.). So, while the largest utilities (the ones previously identified as active in this space) can afford to purchase and install the MDM software solution at their own facilities; it isn’t practical or desirable, for all utility companies to take this approach.

So what can be done to successfully facilitate deployment of fully functional AMI/AMR system (including MDM) in a smaller environment? Fortunately, the answer lies in something these companies have historically done very successfully. That is cooperation. The MDM software solution lends itself to a service-based or hosting solution. By utilizing an independent company to host the MDMS for multiple users the cost of the software and integration can be spread over enough end-points to approximate the cost being achieved in larger installations.

Hosting is a common practice in the software world and many companies hold their financial and customer information in a hosted environment. There are many advantages other than simply cost associated with a hosted solution. These include around the clock system support, robust back up and recovery support, and the ability to adopt improvements in technology earlier than might otherwise be the case.

Deployment of a hosted MDMS offering will align expense with use; and streamline the transition from pilot programs to full-scale deployment. Early implementation of the MDMS in a hosted model will provide cost effective access to a scalable platform capable of supporting both pilot programs and full-scale deployment. The continuity of a common management platform and interface across potentially diverse meter technologies will allow clients to benefit from the use of all available technologies.

By taking advantage of these technologies and the opportunity to manage costs through innovative sharing arrangements such as hosting, these types of benefits are easily within reach of all utility customers.