Managing meter replacement


By Christine Easterfield

Wherever you look, utility organisations are replacing their meters. There has always been the ongoing programme of replacement, ensuring the latest technologies are recording consumer usage, enabling the utility to predict future needs as well as bill the consumers accurately. In the past equipment maintenance and rework to solve installation problems have driven replacement programmes; now we find that other factors are in play. 

With the economy in decline, will new meter technology help reduce costs? Is there government-stimulus “smart grid” funding to support a technology hike? Will new meters improve green credentials and help retain customers? The motivations are many but the logistics and dayto- day activity of replacing meters – and managing the output of these new technologies – has to be addressed regardless. From managing meter inventories, ensuring field operations have the right meters in the right places and updating the back office systems to maximising the productivity of each meter installed, there are practical steps to be taken in every replacement programme.

The processes of any meter replacement programme can be stated simply as a combination of the inventory management of the meters, the physical replacement of a meter in each premise and the integration of the capabilities of the new meter into operational systems. Long before reaching the stage of installing the meters, hard-fought battles will have ensured the decision to go ahead with such a programme has been made, justifying replacement en masse and identifying new meters and supporting back office systems. Optimising the steps of the installation stage is the first step to gaining benefit from a new metering infrastructure.

Consider the experience of a gas and electric utility supplying the larger part of a western state in the USA. They have over six million meters to manage and all have a usable lifetime of between 20 and 40 years. To keep six million meters within that age range, the company runs an ongoing, rolling programme of meter replacement involving over 250,000 meters each year. With the prospect of adopting an advanced metering infrastructure (AMI) across all meters, they identified a pressing need to build efficiency into the replacement process. The decision was made to introduce new technologies in the inventory management stage to speed up the shipment phase and to gain benefit in advance of the AMI decision. The business case was centred on the recovery of lost meters – a single activity that could net the organisation in excess of US$1 million in its first year.

Consistent with industry norms, within the rolling replacement programme a significant number of the meters became “lost” – typically because of recording errors when they were installed. A simple transcription error when noting the meter’s serial number, installed address or even writing the right number on the wrong work order can “lose” the meter. The results range from the pile of meters that nobody knows what to do with at the depot, to errors in billing because consumption at one location is billed to a different location or – worse – to no location at all. Lost equipment is one thing but many US state regulators will not allow utility bills to be more than 90 days in arrears. The direct consequence is that if a lost meter is not recovered within 90 days, there is a matching 90 days’ lost billing revenue. Over a year, for this utility at least, this quickly adds up to US$1million. Recovering lost meters is time consuming and costly. It became clear that a key step in the process of replacement was tracking the meters themselves so that losses are reduced and the billing activity is not interrupted.

A pilot project was initiated to evaluate the options for automating the process. Three options emerged to track meters – a manual process, tracking by bar code and tracking by RFID (radio frequency identification) tag. The manual process was effectively the “do nothing” option, sticking with minimally automated steps and relying on pen and paper to record the movement of meters. Stepping up to having barcodes on the equipment offered a technique that improved the likelihood of accurate recording but was still labour intensive as each individual code needed to be scanned. RFID tags, which could be read remotely, involved a higher initial investment but delivered greater benefits over time. Comparing the initial capital costs with ongoing operational costs showed that a long term view favoured the RFID solution. Using RFID tags resulted in a much lower operating cost than either of the other two options – and combining the investment and operating costs over a five year period showed the manual solution to be twice the cost of introducing an RFID-based process.

Two key factors contribute to the set up costs of this RFID solution – the tags themselves and the infrastructure to read the tags and communicate with support systems. In partnership with their solution provider, this utility tested the various options by replicating the warehouse situation to see how the various barcode scanners and RFID tag portals would respond in a real world situation. A major strength of the RFID tags in the tests was that they need no physical intervention to be read – simply passing through the portal registered the equipment without any need for staff to inspect or view the individual components of a shipment, giving the possibility to reduce or redeploy warehouse staff. But the cost of a tag on each meter – when there are several million meters to consider – becomes a potential limiting factor and so a compromise was identified: use the strength of the RFID tag for bulk handling of the meters in the warehouse but adopt a barcode solution once the pallet loads of meters are broken up for installation.

The result of this evaluation was to use RFID tags on pallets of meters and barcodes on individual meters – with the meter supplier providing an advanced shipping notice that reconciles which meters are on which pallets. The value of this is that as RFID technology becomes more widely used and costs decline, the use of tags can be extended as the infrastructure is already in place and cost justified by this initial project. An alternative perspective on the business of replacing meters comes from the many service provider companies that utilities can partner with when embarking on such programmes. The key relationships are around: 

  • Logistics/supply chain – collection of meters, mid-term storage, dispatch to installers, recovery and disposal after replacement 
  • Installation – managing installation teams and establishing the meter-premise link 
  • Technology supply – communications networks, handheld devices, field software, location finding tools and back office systems 
  • System integration – combining expertise in management of large projects with coordination of sub-contracted teams.

Companies offering these services can bring knowledge and experience that a single utility company would find difficult to build up. But at each stage mobile technologies can be applied to solve the same key issues – accurate and immediate recording of data and direct communication to back office systems. While the commissioning utility will specify the type of meter to install and the data that must be recorded, the service providers use their own software and handheld devices to build efficiency into the process.

One of the most wide reaching benefits of automation in a meter replacement project is the improved accuracy and speed of data capture. By using communication technologies that eliminate manual transfer of information, every activity is impacted. Instead of teams of workers writing down the references of pallets as they arrive at a depot, RFID tags on the pallets can be automatically and simultaneously read as the load passes through the portal. Instead of a handwritten note of a meter’s serial number being carried back to the depot to be transcribed into a ledger the next day, the installation engineer uses a scanner, which automatically and immediately reads a barcode and transmits it to the back office system. Instead of needing to check for incorrectly recorded meter numbers, then send crews out to check the locations and re-record the correct meter numbers, meter numbers are recorded correctly the first time. The saving in time and staff costs can reduce overall programme time by 25% or more.

This improved data capture results in more accurate tracking of meters and subsequent reduction in the costs of maintaining meter stocks. Knowing exact stock levels and moving towards “just in time” re-ordering programmes can save time and money. More importantly, accurately recording a meter’s number and associating that meter with a customer premise at the time of installation means that billing activities can start immediately. No revenue is lost while records are matched up and confirmed. Just one day’s additional revenue from each new meter can result in hundreds of thousands in recovered revenue a year.

There are many options open to utility companies as they plan for meter replacement. The meter is at the heart of the relationship between customer and company and provides a point of automation to drive down costs. As well as the advantages that an advanced meter infrastructure (AMI) can bring, traditional meter replacement is an ongoing activity for any utility and, though largely motivated by equipment maintenance in the past, environmental targets and regulatory demands are now adding to the importance of the task. Timely and effective replacement becomes a key issue.

So what are the characteristics of a meter replacement programme that a utility could use as evidence that it is efficient, concerned about the environment and planning for the future? Of course, each utility is starting from a different installed base, handling different economic and physical constraints, and is working to its own investment and cost management criteria. Even so, the hallmarks of a modern programme include: 

  • Installation of meters with local intelligence
  • Elimination of manual data transcription by using barcodes or RFID devices 
  • Growth of use of mobile communications from voice to data.

With improved metering being seen more and more as the first step to the smart grid, managing a fast and efficient programme of meter replacement is something that all utilities face. Mobile technologies, such as using barcodes and RFID tags, streamline a very labour intensive step and eliminate errors along the way. Selecting the right technologies to help automate the meter replacement process can deliver tangible benefits, faster.