The government said yes to the smart grid – now what?


By Chris King

The United States just announced $3.4 billion in smart grid grants (total projects of $8.1 billion), mostly for smart meters. China announced 200 billion yuan for smart grid. Australia is giving out $100 million for it. The EU is requiring the installation of smart meters throughout Europe. The UK government is to announce smart meter policies by December 31.

Utilities are now challenged as the ones being held accountable for turning the smart grid vision into reality. Utilities need to deal with new technologies, new consumer applications, new business processes, and new expertise. At the same time, they face aggressive government timelines and strong regulatory scrutiny. Utilities literally must build the plane while flying through the air, and make sure it’s ready by the time it lands!

So what’s the first logical step for utilities now that the government has said yes? The emerging best practice is, surprisingly enough: start now with Meter Data Management (MDM). This strategy is being promoted in programmes by smart meter deployment veterans such as Siemens (“MDM first”), Accenture (“No regrets”) and others. An “MDM Now” approach is strategic, has “no regrets,” maximises smart meter benefits, and avoids implementation pitfalls. MDM is the foundation that is needed regardless of ultimate implementation decisions, and the right MDM will support the addition of whatever functionality is required in the future.

MDM Now provides utilities with the experience, knowledge, and foundational IT system that utilities need in five critical areas for ultimate smart grid success:

  • Technology: Hands-on experience with smart meter technologies from the perspective of using grid data, not simply installing equipment and collecting data
  • Business processes: Understanding of new business processes inherent in smart meters and of how existing business processes can be affected or improved by smart meters and smart meter data
  • Consumers: Exposure to consumer expectations and consumer response to smart meter applications so as to gain consumer buy-in and, as importantly, avoid consumer backlash
  • Government: Preparation to meet the high expectations of government officials who expect to quickly see tangible consumer benefits in return for the billions of dollars, yuan, pounds, and euros being spent on smart grid
  • Standards: Taking standards from theoretical, paper descriptions to actual implementation and operation of hardware and software using those standards.

MDM Now provides a solid foundation for any utility heading down the smart grid road, achieving several major technologyrelated goals. The first is enabling an understanding of the real-world issues in operating smart meter systems and collecting the data. Smart meter hardware pilots provide the bare basics of understanding how to install and operate the technology but give little or no insight into the system and data management challenges. These challenges stem from the production deployment need to maintain reliable and accurate data communications capability with hundreds of thousands or millions of end points undergoing constant change: meter replacements, fluctuations in interference to both RF and PLC communications, automatic reconfiguration of communication paths, customer moves and changes, premise modifications, addition of new devices such as smart appliances and in-home displays, and so on. MDM Now provides the IT platform to monitor and manage this highly dynamic environment and, through operation of the combined smart meter hardware and MDM, the experience needed to scale successfully from a pilot of a few thousand points to millions.

The second technology goal served by MDM Now is learning how to extend the life of existing IT systems in the rapidly changing world of smart meters. Legacy systems were designed for a batch oriented world and limited data quantities of monthly, quarterly, or even annual meter reads and without other data and communications related to smart meters. MDM functionality can extend the life of the billing, outage management, and other systems by pre-processing smart meter data for existing systems. Interval data can be pre-processed into time-of-use data and peak-time rebate amounts can be calculated in the MDM. These billing determinants can then be delivered to the existing billing system. Another example is outage data, which can be filtered during a storm so as not to flood the outage management system with excess and unnecessary data.

The third goal achieved is the compelling technology strategy of a Service Oriented Architecture (SOA) that separates the sources of data – smart meter systems – from the uses of data – utility IT systems. This provides the utility with complete flexibility in selecting and implementing new smart meter technologies in the future and avoiding lock-in to a single smart meter vendor. The resulting competition between vendors reduces costs and improves performance. The separation of sources and uses also allows for upgrading or replacement of utility IT systems – or addition of new, smart grid applications – without being required to modify the smart meter system.

Smart meters and the data they generate will transform existing utility business processes and add multiple new processes. MDM Now begins the learning process today in manageable, incremental steps, beginning with meter-to-bill, progressing through automation of connect/disconnect and other processes, and ultimately ending up with electric vehicle charging management and integration of distributed renewable energy resources.

MDM Now enables utilities to learn how to actually utilise smart meter data in the utility enterprise. Bringing back interval data, outage and voltage alarms, and other data to a smart meter head end is not even half the battle. The real challenge of smart meter implementation is preparing the data and delivering it to the application system that creates the ultimate business value. These systems include billing, CIS for connect/disconnect, load forecasting, outage management, and others. It is only when the smart meter system is delivering data to business systems that are automating, streamlining, or enhancing operations that the financial and customer service benefits of smart meters arise. MDM Now creates the first step in delivering that end-to-end value chain so the utility really begins to understand how its business will change with the availability of large-scale smart metering data in coming years.

MDM Now also delivers experience in the business processes of smart meters, again from the perspective of the utility organisation rather than just a small project of installing and reading a few hundred or thousand pilot meters. Smart meter business processes begin with the basics of the meters and communications: installation, provisioning, operations, and maintenance. Smart grid extends these processes to smart thermostats, in-home displays, and smart appliances. The business processes further include operating the system, collecting real-time and daily data, monitoring performance, and making necessary repairs. A key element is exception management, the bane of large scale utility IT implementations. Smart meters create large volumes of data and involve multiple business processes, thus compounding exception management issues. MDM Now enables utilities to get these issues under control at the beginning, before high volume meter rollouts create potentially overwhelming levels of exceptions.

Just as utilities have much to learn about smart meter business processes, they have much to learn about consumer response to smart meter applications. MDM Now enables such learning to begin, again in incremental steps.

Consumers seeing press articles about smart meters and the meters themselves installed at their homes are both curious about the benefits and skeptical of utility motivations. Smart meter information, service improvements, and price options are universally welcomed by consumers but must be delivered effectively. This requires understanding consumer preferences and desires, the effectiveness of various marketing and information delivery channels, and, perhaps above all, managing consumer expectations about the type and availability of various smart meter services.

Successful utilities start small, but with complete end-toend processes, such as presenting smart meter data online and offering market friendly, dynamic pricing pilots. Lessons are learned, and programmes and processes are improved prior to going to the next level and, critically, prior to going to the rollout stage. Because the initial programmes are small, the cost of learning is minimal or none. The value of avoiding mistakes when dealing with hundreds of thousands or millions of customers is inestimable. MDM Now makes the learning possible.

With the billions being spent on smart meters, government officials and regulators are closely monitoring rollouts and looking for the promised consumer benefits of improved customer service, energy conservation and efficiency, peak demand reductions, and information to manage energy bills. As with other smart meter matters, delivering consumer benefits – and demonstrating this value to government officials – works best when started early and small and grown incrementally and in parallel with the overall smart meter rollout. MDM Now enables this result.Successful smart meter adopters have emphasised the consumer from the beginning, with a dual focus on operational deployment and implementation needs, on the one hand, and on educating and delivering smart meter programmes to consumers, on the other hand. Toronto Hydro is an excellent example, deploying several hundred thousand meters in less than three years. At the same time, Toronto Hydro immediately made smart meter data available via its website so consumers could see their detailed usage information. In parallel, Toronto Hydro began educating its consumers about the coming availability of time-of-use rates, using smart meter data to provide price comparisons. The result has been very high levels of consumer acceptance and satisfaction – and very happy regulators. Without early implementation of its MDM, Toronto Hydro would not have been able to achieve such success.

Smart Meter MDM Dos and Don’ts

  • DO build a flexible foundation, an integration platform that scales in volume and functionality
  • DO use commercial off-the-shelf technology to avoid technology obsolescence
  • DO rely heavily on your vendor’s expertise and experience; they’ve been thinking about and doing this for many years
  • DON’T lock yourself into a single smart meter hardware solution that stops you from benefiting from future improvements
  • DON’T build a custom solution, because they are always inflexible and become obsolete
  • DON’T pick just any MDM, pick the right MDM

The last essential area of utility experience in smart meters is implementation of smart meter standards. As seen by countless utilities, reading and understanding standards in white papers and reports is one thing, but implementing them in actual hardware and software is entirely another. The only way to overcome this barrier is to get one’s hands dirty and put theoretical standards into realworld practice. This means implementing hardware and software – and the interfaces between different elements of hardware and software, which is where the standards come into play. As with business processes, smart meter operations, and consumer benefits, real knowledge and understanding comes only from endto- end implementation – made possible by MDM Now.

The smart meter road down which utilities are travelling is complex, rapidly changing, and, above all, new. Success requires experience and understanding of technology, business processes, consumer behaviour, and regulatory strategy. Installing large meter quantities – for all its challenges – is the easy part. The tough part, and where utilities are advised to invest early to gain as much knowledge as possible, is the end-to-end processes and applications, made possible by MDM Now.

MDM Now delivers a system that every utility needs as part of its smart meter solution. The right MDM will also support any smart meter hardware and communications decision the utility makes. And the MDM will take time to implement and learn from. When the government says “Yes!” those utilities that have begun or completed their MDM implementations will be ready to move forward quickly but prudently and confidently with the knowledge they have gained an operational MDM IT platform, prepared for success.