Advanced Meter Reading
Debunking the Myths
An executive speaks out.
March 2005
By Mark Leach
I think, frankly, that it's those marketing folks who conjure up all the myths about advanced meter reading. Rather than sheepishly admitting that their product is deficient in multiple areas, corporate spinmeisters spin webs of words and images into difficult-to-understand concepts, hoping upon hope they can fool us. They bank on the old adage: tell a lie enough and soon people will begin to believe it.
Automatic meter reading (AMR) is an area in which myths constantly swirl, so it's time for a little truth about AMR, long considered a promised land among utility executives. Time to toss out the marketing jargon. Time to bust some myths.
First, if AMR is the Promised Land, then why in the heck isn't every utility, municipal, and cooperative throughout the world relying on it and preparing to deploy it? A seemingly simple question, I think. The answer is that AMR has more holes than the Titanic's hull. All sorts of holes: technical holes, hardware holes, network holes, communication holes. The Promised Land? It's more like a wasteland.
Bottom line: AMR's hype outpaced reality, leaving the marketplace littered with failures, fake promises, and foolish hype. Here's why.
AMR was viewed as a niche technology with niche benefits rather than as an enabling platform with tentacles that can touch nearly every operational area within a utility. Better billing was billed as its chief, if not single, benefit.
Deregulation turned return on investment (ROI) analyses into a fool's game. Outrageously long payback on AMR investments made the risk higher than the potential benefit.
Hardware designs were clunky. Totally underglass designs were a pipedream.
Network coverage, communication costs, and quality issues added layers of complexity, sucking promised efficiencies (e.g., real-time pricing, time of use, power quality) in the process.
Data overload was suffocating and the software needed to analyze it all was nowhere to be found. Boxes of metered data piled up with no means of understanding what any of it meant.
For AMR to prosper, it must morph into something larger and more significant to a utility's entire enterprise. Going forward, the new game centers on advanced metering. Advanced metering is, at its core, a complete real "real-time" system that incorporates and integrates hardware, flexible communications via public or private networks, and software for Web-based analysis and sophisticated management reports.
Advanced metering, done correctly, can address all of AMR's deficiencies. If a system is missing any of these elements, it's not an advanced metering platform. An advanced metering platform can enable all areas of a utility's enterprise to benefit from the metered data. Let's review some of advanced metering's chief benefits:
The billing department gets much more efficient in collecting usage data and issuing customer invoices.
The call center receives far fewer calls (80 percent of calls are bill-related in some fashion) because bills are more accurate.
Risk management faces less risk with time-of-use metering.
Real-time pricing makes sales executives more competitive in retaining or attracting new customers.
Load management and load aggregation provides a load of new micro and macro efficiencies.
Marketing adores advanced metering's energy-use diagnostics because it changes the selling equation from commodity/cost to one of partner/value.
Operations and field support enjoy insights into electric power issues such as transients, voltage disturbances, power factors, and harmonics.
One of the biggest myths is that AMR is far different from advanced metering. Advanced metering, performed correctly, offers many more benefits than AMR, touching the entire enterprise.
But that's just one misconception. Below I identify the three other biggest myths in the industry.
Myth 1: Advanced metering requires juggling several hardware, software, and network vendors.
Myths of the non-Greek variety bother me. To me a myth is nothing but a big fat fib. In the utility industry-particularly within the advanced metering arena-there are so many myths swirling around that it's hard to keep them all straight. So I've taken on the role of chief myth buster. Read on only if you want to hear the unvarnished truth.
For many years, technology folks have debated the question: What's better: purpose-built best-of-breed technologies, or all-inclusive end-to-end solutions?
Conventional wisdom holds that best-of-breed technologies are just that-best-in-class, tops, primo, top-dog. The downside to best-of-breed technologies is their limited scope. Companies that build and sell best-of-breed technologies have no interest in solving the world's problems, just the part they know the most about. Their goal is to make the best darn widget in the entire world. Period. On the end-to-end solutions front, conventional wisdom holds that a fully integrated, seamless system running from A to Z is preferred over just niche, best-of-breed technologies.
Think of it this way: best-of-breed is like going to a fine Italian restaurant. The flip side: Piccadilly's Cafeteria. It might not be the best food in the world, but with all that food lined up end-to-end, you're sure to leave feeling pretty darn robust no matter what! Best-of-breed or end-to-end? That's the question. On its face, the question presumes that best-of-breed technologies and end-to-end solutions are mutually exclusive. One always must make an either/or choice. Wrong.
Who says a company that's developed best-of-breed technologies can't also be an outstanding end-to-end solutions provider? Who says a company with end-to-end solutions can't also be regarded as having best-of-breed technologies? In what playbook is it written that a single company is incapable of spawning best-of-breed technologies and end-to-end solutions?
Best-of-breed and end-to-end are terms devised, embraced, and propagated by pundits to depict two different philosophies on how to buy technologies. Don't fall victim to
conventional wisdom where you're forced to make a best-of-breed/end-to-end choice in every situation.
In the advanced metering arena, for example, the best-of-breed/end-to-end dilemma revolves around whether to deal with a single company or multiple hardware, software, and network services providers. Go the best-of-breed route and you face a litany of integration challenges and inevitable finger pointing should problems surface among the vendors. Pick an end-to-end vendor and you could be at their mercy if it doesn't perform. We believe a technology can accomplish both. Settle for nothing less than best-of-breed and end-to-end in the advanced metering arena. Avoid the either/or route and you just might find a way around the sand traps and water hazards.
In the advanced metering arena, for example, the best-of-breed/end-to-end dilemma revolves around whether to deal with a single company or multiple hardware, software, and network services providers. Go the best-of-breed route and you face a litany of integration challenges and inevitable finger pointing should problems surface among the vendors. Pick an end-to-end vendor and you could be at their mercy if it doesn't perform. We believe a technology can accomplish both. Settle for nothing less than best-of-breed and end-to-end in the advanced metering arena. Avoid the either/or route and you just might find a way around the sand traps and water hazards.
Myth 2: "Real time" is an absolute term in advanced metering.
What the heck does the phrase "real time" mean in the world of business? Everyone talks about business moving in "real time." Real time this. Real time that. It's assumed everyone intuitively understands what "real time" is and that everyone operates under the same definition.
But, in fact, "real time" means different things to different people. To some it means "close to now." To others it means "when we can make it happen." To still others it means "whenever we get stuff done." "Real time" has morphed into a relative term, not an absolute one."
Well, I'm no dictionary, but to me "real time" means "real time." I know you're not supposed to define something using the same words, but I'm an engineer. We deal in absolutes. We leave the fuzzy stuff to the marketing folks.
"Real time" means now. Immediate. It means currently. "Real time" should mean real "real time."
For example, you are reading this page in real time. Your eyes are moving across the page from left to right. The letters form words. The words form sentences. Information flows through the optic nerve to the brain, and the brain processes and understands.
All of this is happening now. Currently. In real time. Real time is now, not later. Not over a period of many minutes or hours or days or weeks. Real time means when you want it and need it most.
In my opinion, real time is only accurate when describing how any connected meter can be read in as few as five seconds. During this real-time period, our systems are designed to initiate a wireless connection to the meter, capture data located anywhere in the meter's ANSI tables, relay the data to our secure meter management data center, and update our advanced meter portal. All of this is completed in as few as five seconds. Not three minutes. Not once a night in batches. Now. Immediately. Currently. In real real time.
The advanced metering and AMR landscape is full of real-time hype. Check under the hood and you'll discover that real time is in the eye of the marketer, not from the well of reality. Utilities are facing a number of business challenges that demand an increase in the velocity of their operations. If you're seeking to move to real-time operations, find an advanced metering platform that operates in real real time as well.
Myth 3: Advanced metering only streamlines a utility's metering department.
When AMR first popped up on radar screens, utilities viewed it as a niche technology with a niche benefit: a way to cut meter-reading expenses. Unfortunately, this narrow view of AMR continues to scar its more promising offspring: advanced metering.
Advanced metering can do a lot more for utilities than just reduce meter-reading expenses. Analysts suggest that over 50 percent of advanced metering's quantifiable benefits spawn from departments other than metering, namely customer service, distribution support/engineering, finance, and marketing.
Customer Service
Empowered by the right advanced metering platform, customer service representatives can remotely manage move in/move outs, service connect/disconnects, and meter re-reads in real time without dispatching field visits. Without estimated meter reads, billing is more accurate, reducing the number of calls to customer service and the need for follow-up investigations. And since the vast majority of customer service calls are, in fact, bill related, it's been estimated that utilities can save up to $2.50 per customer per year from this change alone. According to several industry sources, the following numbers should be considered when calculating actual benefits from an advanced metering deployment:
15 to 25 percent of utility customers move annually;
Off-cycle meter read: $10 to $20 per read;
Billing adjustments: $5 to $25 per event;
Generating estimate bill: $0.50 to $5 per bill;
Customer service call: $1 to $10 per call;
Follow-up investigation: $5 to $75 per event;
Trouble ticket: $25 to $150 per event;
Re-bill account: $5 to $25 per bill; and
Revenue lost to float: $0.50 to $2.
Distribution Support/Engineering
If it can enable real real-time customer load information, an advanced metering platform provides the data infrastructure for real-time pricing support, and helps maximize system planning, thereby impacting distribution, substation, and transmission. Power quality and reliability also can be monitored with an advanced-metering platform, enabling proactive responses to issues before customers complain. An "always on" platform knows when connectivity is breached and helps ensure restoration crews are appropriately dispatched to problem areas.
Marketing & Sales
As a direct link to your customers and their energy consumption needs, advanced metering can help generate additional revenue. With load profiles and time-of-use data, utilities can better manage system resources and offer previously unavailable energy management data to customers.
Meter Reading and Operations
With advanced metering, the most obvious savings come from reductions in direct labor, transportation, specialized equipment, clerical support, office space, management supervision, benefits, contract meter reading, and job-related and mandated training. Huge savings follow when a utility can do remotely what used to require field support. Add to this substantial savings in communications costs and the ROI for a real real-time advanced metering platform is evident.
Advanced metering is defined differently by different organizations. Don't be fooled by impostors parading as the real thing. A deficient advanced-metering system won't add up to a hill of beans.
Mark Leach is the chief technology officer of AMRON Technologies Inc. He can be reached at mleach@amronm5.com.
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