Maximize ROI by leveraging private network infrastructure for AMI and Smart Grid initiatives

AMI: the beginning of a transformation – a foundation for automating the utility

Utilities are at the cusp of what might be deemed as their greatest transformation in the history of their existence. Many global, political and economic pressures on today’s electric utilities are resulting in regulatory requirements and financial incentives that create the need for utilities to evolve from a semi-connected, silo-based, reactive organization to a fully connected, integrated, proactive organization. For decades, the underlying technology that comprises the utility’s generation, transmission and distribution architectures has remained relatively constant. Similarly, the original analog communication systems that were deployed to support the field worker’s voice needs as well as basic telemetry requirements are now reaching their end of life.

Within each electric utility, a vision has been or is in the process of being created to transform the organization into a ‘smart utility’. At the heart of the smart utility is an intelligent communications network – a communications network capable of connecting workers, customers and the utility infrastructure. An intelligent communications network provides the framework for utilities to automate all areas of their business to achieve a new level of operational efficiency. The resulting productivity increase will allow the utility to achieve a new level of cost-efficiency for production and delivery as well as improve cash flow and customer service levels – while maximizing the return on investment for the utility enterprise.

In the utility today, there are most likely a series of business unit initiatives that rely on multiple communication platforms, creating “silos” of information that present little opportunity for connectivity to support other ”smart utility” initiatives. As a part of the development of a “smart utility” strategy, utilities need to develop a plan for a cohesive enterprise-wide intelligent communications network capable of supporting and creating synergies with multiple automation initiatives.

As we are seeing today, AMI (Advanced Metering Infrastructure) is one of the hottest ”smart utility” initiatives, with AMI requests for proposals (RFPs) and awards at an all time high. Utility companies are making massive investments from hundreds of millions of dollars to billions of dollars to update the infrastructure to support large scale AMI Systems. These AMI systems rely on ‘smart meters’ that are capable of capturing and transmitting energy usage information from the customer back to the utility, as well as enabling the utility to send pricing data such as Critical Peak Pricing (CPP) and Time of Use (TOU) rates and other control information to the customer.

Knowing that the AMI system will typically cover the utility’s entire service territory, it makes sense to design a robust Wide Area Network (WAN) to support not only the transmission of data to and from the AMI system, but also to support many of the other desired Intelligent Grid applications that fall within the same service footprint.

The reality is that no one WAN technology, private or public, provides the utility with all the capabilities it needs. Therefore, a comprehensive WAN strategy that takes into account the needs of multiple current and planned Intelligent Grid applications will require a combination of networks in order to achieve both technical and financial goals.

Traditional approach to AMI backhaul as a tactical solo-application decision

AMI solutions sound simple in concept, basically requiring 2-way capable smart meters, access gateways or collection points, and a wireless connection between the meter and the utility’s smart metering application. Since the smart meters and the smart meter application provide the strategic value to the utility, the utility’s main focus in an AMI initiative is generally on the meter and AMI vendor selection, with the backhaul solution seen as a secondary tactical concern. Since the bandwidth requirements for AMI are fairly minimal, the cellular networks have been a logical backhaul consideration for AMI solutions – they are already built and ready to go, and smart meters can be installed and quickly activated, simplifying and increasing the speed of these massive deployments. As a result, the cellular network is often selected as a sole wireless backhaul solution for AMI deployments, but this approach can also present challenges.

Issues with an “all public” tactical solo-application approach

There are a number of issues associated with the selection of the cellular network as the sole solution for AMI backhaul:

Issue #1

The first issue lies in the hidden complexities of the traditional utility technology architecture. Most utilities are already battling with many silo systems and multiple networks. Adding another wireless network to the mix can increase the complexity of an already multifarious IT infrastructure – IT now has yet again one more network connection to deploy and manage, adding Operations & Management (O&M) costs that impact your bottom line.

Financially, public network monthly service fees are recognized as a soft cost that rolls under the O&M category on the financial ledger – not as a capital cost. Most Public Utility Commissions (PUCs) have allowed utilities to recover capital costs expended for Intelligent Grid initiatives in their rate case. This is not always the case for O&M costs like monthly carrier fees. Even if the initial smart utility application receives PUC approval for ongoing monthly service fees in the rate case, subsequent smart utility applications may not, resulting in a reduced ROI for the utility.

Issue #2

Another issue involves the fact that deployment of smart meters to automate meter reading is just the tip of the iceberg of the capabilities of modern AMI solutions. Once the smart meters are deployed, the utility can leverage the AMI investment through additional initiatives like demand side management (DSM), real time and critical peak pricing (RTP & CPP) and load control that can help reduce energy consumption during peak periods, better controlling costs and improving reliability as well as power quality. The ability to reduce demand during peak hours can even have a positive environmental impact by reducing the number of plants required to provide ample power during peak periods. Subsequent smart utility applications will require additional bandwidth – and these application requirements must be factored into the AMI backhaul selection in order to ensure that adequate bandwidth will be available to support this future growth.

Issue #3

The third issue involves the overall strategic direction of the utility. With a tactical silo-application approach, the needs of additional business systems throughout the utility are inadvertently overlooked, perpetuating the selection of a patchwork quilt of backhaul solutions that continually hamper the ability to achieve the vision of the ‘smart utility’ – and add operating expenses that reduce the return on investment

Issue #4

The fourth issue involves the limitations associated with cellular networks. AMI is a mission critical application whose success is completely dependent upon the backhaul backbone. AMI solutions require ubiquitous, truly always on coverage over an extraordinarily wide area. Basing the success of a mega-million dollar solution solely on a network you don’t own and can’t control may be considered too risky for your organization. The Energy Policy Act of 2005 and Public Utilities Commission (PUC) guidelines and mandates affecting SAIDI, CAIDI and MAIFI define acceptable customer service levels through government requirements for utility uptime and customer satisfaction – which typically cannot be met by a public only solution.

To further compound the mandated service level issues, the typical lifecycle of a utility AMI solution is 15-20 years. But today’s public cellular network technology is evolving faster than ever. Just as customers were forced to switch from CDPD to GPRS, the same changes will be happening as next generation public cellular technologies are released. Mobile phones have become a commodity – changing phones to upgrade to the newest network technology is acceptable to consumers and businesses. But for the utility, retouching the millions of smart meters in an AMI solution to swap the radio is unacceptable – and the resulting costs would significantly degrade return on investment.

Intelligent AMI backhaul design: a strategic approach

To maximize the value of AMI investments as well as help bring the smart utility to life, today’s leading utilities are considering the AMI communications network as a forethought – an integral design component of the AMI system. In effect, the AMI backhaul design becomes a strategic business decision that reaches across the enterprise, driven by the long-term needs of the business.

As previously stated, there isn’t a single WAN solution that can meet the diverse geographic, demographic and functional needs for an entire smart utility initiative. An intelligent mix of wireless networks will be required in order to create the most cost-effective backhaul solution to meet enterprise requirements. That mix includes a private wireless broadband network as the main artery of your backhaul solution, in combination with the cellular networks to support niches in your coverage area.

The role of the private wireless broadband network

Since a private wireless broadband network is wholly owned by the utility, it enables the creation of a wireless broadband network designed to meet the unique needs of the individual utility – regardless of how large or diverse the geographical area may be or the number of subscribers – including:

• Coverage : The utility can design the network to ensure coverage wherever it is required.
• Capacity : The utility is in charge of managing capacity – as additional applications are added in the future, the utility can easily add capacity as needed.
• Cost : Since a private wireless broadband network is a capital expenditure, the utility can include this cost in the rate case as part of a smart utility initiative.
• Control : Since the utility owns the network, the utility is in complete control of the network, able to determine Quality of Service (QoS) and packet priority to ensure adequate bandwidth for the most crucial business applications at all times. In addition, the elimination of public traffic removes opportunities for network overload that could render the network unavailable – for example, during a disaster.
• Future proofing : Private wireless broadband networks are not subject to the constant protocol changes that are taking place in the cellular networks, ensuring that the equipment you purchase today can easily remain in service over the 15 to 20 year expected lifecycle for AMI solutions.
• Security : Since the network is privately owned, the utility can deploy, enforce and manage standard security policies to provide the right level of protection for company data.
• Scalability : Unlike the cellular network, the utility can expand the private wireless broadband network to serve a customer base that may be expanding in numbers as well as into new geographical locations.
• Capabilities : The private wireless broadband network can provide whatever network and user capabilities are required. Network capabilities can include mesh technology for cost-effective wireless point-to-point or wireless point-to-multipoint bridging between locations as needed. And with complete control over the network, the utility can elect to deliver whatever user services are needed. Today’s users may require mobile voice, push-to-talk, GPS for location-based applications and image capture to document damage or other conditions. Tomorrow’s users may combine GPS and image capture to enable geostamping, providing an audit trail for equipment repair that includes the technician’s name, the date, time and exact physical location of the repair.

The role of the public cellular network

The cellular network plays a very important role in the creation of an AMI backhaul solution. This complementary network ensures the cost-effective build out of large statewide wireless broadband backhaul networks.

Utility generation, transmission and distribution systems are statewide infrastructures with millions and millions of end points that span thousands of miles. There will be areas throughout the utility coverage area with robust cellular connections capable of delivering the bandwidth and uptime required. The utility can then compare the costs to extend wireless coverage to these areas through the cellular network and through the deployment of private wireless broadband infrastructure – and select whichever solution most cost-effectively meets the requirements.

This flexibility eliminates the need to extend a private wireless broadband network in areas where it is not financial feasible, allowing the utility to design a total wireless broadband backhaul solution that offers maximum coverage… and maximum cost efficiency.

Studies have shown that for a typical utility AMI system covering a sizeable service territory, including both urban and rural areas, approximately 80 percent of the backhaul could be carried over private network equipment with 20 percent supplied by the cellular carriers.

Summary

Today, AMI is traditionally approached as a point solution with a single source of dedicated backhaul, where the smart meter selection and application are of premier importance. By reversing this approach, and treating backhaul as a component that is equally strategic as the smart meters, utilities can create a backhaul solution designed to support AMI and other business critical solutions today as well as tomorrow with a truly resilient wireless connection. Instead of a single purpose backhaul solution, the enterprise creates a future proof, multi-use backhaul solution that becomes part of a long-term ‘connected utility’ strategy. In addition to an outstanding return on investment (ROI), this multi-purpose backhaul solution paves the way for the implementation of new applications that can automate the grid and enable self-healing to better control and reduce production and delivery costs, taking utilities one giant step closer to enabling the utility of the future.