Do future trends favour automatic meter reading?
Although only 3.5% of meters in North America, and fewer than 1% in Europe, have AMR devices attached, numbers are increasing steadily and extensive trials in both areas are ongoing. Probably one of the most compelling reasons for the move towards AMR is the increasingly competitive, deregulated environment in which utilities operate today. "The factors that are propelling the trend are new, lower cost technologies, a need to reduce costs under performance-based regulation and the need to provide a richer array of service options to customers," comments Ralph Abbott of Plexus. Virgil Weed of Equimeter agrees. "As the energy businesses get more competitive, they will need to be able to communicate with the customer's location more frequently. The current trend of visiting the customer location once every five weeks or more will not suffice." Another benefit is mentioned by Daniel Pouliot of Nertec. "The technology must be totally remote to provide customers with at least flexible billing options (for example billing on a requested date or consolidated billing)." Of the three most common methods of collecting data from meters, AMR is undoubtedly the most expensive. Of course, the possibility of human error on the part of a meter reader has been eliminated, as have access problems. And the disadvantages associated with prepayment (customer dissatisfaction when credit runs out, or when tokens are difficult to obtain) no longer apply. "Although remote data collection requires a greater initial capital outlay, it results in a far more reliable and automated method of data collection and the payback period is relatively short," notes Martin Grossman of Jekyll Electronic Technology.
There's no doubt, though, that the present-day demand for more and more data in order to make cost-effective decisions and to provide improved customer service has played a major role in the move towards AMR systems. "The use of the technology goes well beyond the immediate cost reductions and safety improvements that the systems provide," says Peggy Richmond of American Innovations. "Progressive utilities are already using the technologies to provide improved customer services such as time-of-use rates, outage reporting and the delivery of bundled ancillary services. As deregulation creates a more competitive environment in which utilities must operate, the demand for data has risen sharply. Interest in streamlining costs, building new revenue streams and increasing customer satisfaction serve to fuel the demand for this data." Before there is universal acceptance of AMR systems, though, firm conclusions will have to be reached about who owns the meter and how the data will be used. Many utilities have decided not to make the required investment until these crucial matters have been sorted out. Is AMR for large users only?
The panel was divided on the issue of whether AMR would be confined to large users only, or if it was likely to be extended to residential users. There was general agreement that the cost factor made AMR systems easier for large users to justify, but continuing technological development means that this factor will not be as important in the years ahead. "Logically, large meters allow a much easier economic justification, but even domestic meters can pay back an AMR investment in five to seven years," notes David J Gestler of Sensus. "With an expected meter and reading system life in the US of over 20 years, the benefits are quite substantial." Abbott believes the whole issue depends upon economics and who is willing to pay for what services. "The economic justification of AMR for many residential customers can be challenging; a balance of `hard costs' and `soft costs' that can vary widely. Many energy suppliers regard the meter and/or the meter data communications device as a `customer gateway' which can provide other revenue-producing services to the customer." As new technologies are developed, however, AMR becomes more affordable. "This technology carries distinct cost and service advantages to residential users," says David Haynes of Exicom. "I believe that residential users will represent the vast majority of installations of communicating meters." Competition and customer service And once again the issue of competition and customer service is mentioned. "Most industrial accounts that purchase transport gas have a communications device installed at the meter site.
Residential customers will need communications available as competition increases and customers want to be able to change suppliers more frequently," says Weed. "The typical transport contract for residential customers is between one and five years and this period is too long. We see it decreasing to whatever the customer wants in the next five years." Coherent Technologies' Robin Wilkinson sees the greatest volume of business over the next few years as coming from the industry sector, particularly for electricity metering. "However, we are supplying substantial volumes of modems for residential telephone-based AMR to meter manufacturers in the UK. Although these are at present only for large scale trials, we anticipate substantial growth in the residential electricity AMR sector across Europe during the next ten years, particularly for difficult-to-read meters. In our experience of the market, gas and water AMR seem to be some way behind electricity for residential customers." Some panellists, such as ABB's John R Goodman, report that much of their business is in support of residential AMR programmes but that, since deregulation and competition, they are noticing more of a focus on commercial and industrial metering. Others like Fisher Pierce supply mainly large users.
All the panellists are united in their belief that AMR should be made available to residential users. "Why should residential people be shut out of the ability to purchase power at a lower cost?" asks Jerry Fund of Computer Metering Corporation. "Power aggregators can fill that area with ease." Global Energy's Randy Smith des-cribes two basic approaches to communication with an energy meter. "The first is to blanket a geographic area with a communications system such as cellular, MAS, unlicensed frequency system or PLC. These systems would typically pick up residential as well as larger customers. This is done to spread the cost of the infrastructure over the most possible number of users. "Alternatively specific customers can be targeted, using communications systems like telephone or sate-llite." In this case, of course, the customer is likely to be a large user. What is certain is that AMR systems will continue to be made available to both large and small users, probably at an ever-decreasing cost as new technologies are developed and as large installations offer consumers economies of scale benefits. Bi-directional vs. one-directional communication Nine panellists believe that bi-directional communications are likely to become the norm. "The business cases indicate that two-way communication is the only method that makes business sense," comments Ken Kercher of Datamatic. Rikard Svensson of Radius Sweden AB also believes that want to use this capability." There is overall acceptance, however, that there is place for both systems. "Generally we believe that mobile systems and drop-in micro-cell fixed systems will continue to have a role where the utility's need is for meter readings and other limited functionality, but that full fixed network systems must offer bi-directionality," notes Sue Fitzsimons of RAMAR Technology.
Steve Bottorff of Hexagam is of a similar opinion. "Two-way communication will be restricted to large users, or those who need additional features like load shedding. One way (for the sole purpose of meter reading) will become the norm for residential users." To be a true bi-directional system, the product line must be capable of providing full addressable data, control and device programming information on both a global and individual unit basis. Some systems claim to be two-way, on the grounds that they use a two-way wide area architecture, but there is in fact only one-way communication with the meter data communications device. "Bi-directional systems provide the ultimate in communication, especially with respect to disconnection and reconnection of customers following occupancy changes," says Tim O'Brien of AMPY. "They also offer the benefits of being able to control other metering requirements (gas, water, heat, chilled water)." A major advantage of two-way communication systems is that they will permit functions which may not even have been identified today to be added in the future.
Today the trend towards more complex rates (real time pricing, time-of-use tariffs and so on) makes bi-directional communications more attractive. A major disadvantage is the cost, often over 60% more than the one-way system. And as far as the supply of gas is concerned, Weed believes that meters themselves will influence the decision. "We believe that communications will migrate to bi-directional as current meters are replaced by smarter meters. Current mechanical meter technology for gas meters is limited in its ability to generate and utilise data. Future meter technologies will continue to migrate to an electronic platform. Most electronic gas meters are ultrasonie. The electronic platform is `smart' in that it enables the meters to generate, save and act on information sent or received, without adding on additional devices. The electronic platform also makes tampering more diffcult because the intelligence is internal to the meter." An issue receiving increasing attention is the question of whether the AMR system requires a proprietary, single purpose fixed network infrastructure, or whether it takes advantage of existing infrastructure such as telephones or satellites.
Regulatory bodies see the utility-owned fixed network as being an impediment to open access metering. "Newer, non-traditional energy suppliers favour `infrastructureless' AMR which can be `parachuted in' to a particular customer site," says Abbott. At the end of the day, the technology chosen to deliver the product will be determined by the level of service required by the consumer. There are those who want ancillary services, those who require only energy management, and those who simply want their meter read. Service providers will always supply in the most cost effective manner, and therefore it is likely that both two- and one-way systems will be available for the foreseeable future. Using AMR for other purposes The facilities available to consumers with bi-directional communication systems fall into two broad categories - those that relate to the operations of the utility, and those that make life easier for consumers. The panel mentioned time-of-use data, real time pricing data, remote disconnect/reconnect, theft detection, outage alarm, load control, remote resetting of maximum kW demand. Additional services such as medical and burglar alarms, home automation, Internet access and interactive television fall in the second category. Archibald suggests that the ability to warn of high tariff periods is an important feature, while Goodman points out that most companies installing fixed network systems are looking to sell metering services to other utilities - for example, electric utilities want to sell services to gas and water utilities, and vice versa. Recognising that many applications are available with a bi-directional system, Smith warns that it's not always certain who benefits. "What provider would benefit from this communication will depend on who owns or has access to the communication system.
Utility-owned systems will increase the utility's competitive advantage over a system which is leased or subscribed to, but owned by a separate carrier such as a telephone or cellular system. The downside to owning the system is the initial capacity investment." And Abbott wonders if the advantages are as powerful as they are supposed to be. "The fact that an AMR system is technically capable of providing other features and functions does not mean that it is necessarily the most technically or economically optimum approach for those applications. Security alarm monitoring via a particular AMR system may be possible, but is it the best and most economic way of doing it?"
In the next issue of Smart Energy International we will feature the panel's views on the communications capabilities that are currently available, on developments that are likely to occur over the next decade, and on the technology (PLC, fibre-optic cables, telephones and so on) most likely to be selected. Smart Energy International gratefully acknowledges the panel's contribution in the preparation of this article.