Electricity Provides Unique Challenges in that it cannot be Stored in Bulk. Instead, it is consumed as soon as it is produced. This means that as demand increases, a utility has to bring more generation on-line to meet that demand.

Utilities start out using their cheapest and most efficient generating units first. As the demand increases, the next level of generation is brought on-line and so on until the most expensive and least efficient units are pumping power into the grid. This causes the price of power to vary by time of day and the day of year. Moreover, it doesn't matter if we are talking renewable, regulated or deregulated electricity; the market price of electricity is dependent on the demand.

Demand rules consider seats on airlines and look at hotel rooms. We know prime vacation time is more expensive than off-season. Supply and demand controls the prices of these services, so why don't utility customers think much about when and how they use electricity? Because the vast majority of meters installed on our customers' buildings are simply dumb devices.

The electromechanical meter was invented in 1888. It took about 100 years for the first technical advancement to be introduced with automatic meter reading (AMR), followed by automatic metering infrastructure (AMI); but the industry has been slow to change over. R.W. Beck Inc. (Seattle, Washington, U.S.) estimates there are roughly 130 million electric, gas and water meters in the United States today. Of these, only 27 million are smart meters. The Federal Energy Regulatory Commission's (FERC) “2007 Demand Response and Advanced Metering” staff report estimates that only about 5.9% of the smart meters have AMI technology capable of two-way communications. On a base of 130 million meters, roughly 7.7 million out of 27 million smart meters installed are being used to their full potential. One interesting fact reported is that as of May 2007, AMR meters were still out-shipping AMI meters.

CALIFORNIA COMMITS TO AMI

Adoption of AMI meters may be slow, but it's steady and it's inevitable. Utilities, regulators and customers see the benefits in making the customer connection more intelligent and responsive to system needs. According to the FERC staff report, utilities have announced plans to deploy more than 40 million AMI meters in the next three years. These meters are expected to replace the old electromechanical meters and previously installed AMR meters.

FERC predicts AMI meters will outpace AMR meters within 3 to 5 years. The California Public Utilities Commission (CPUC) has approved AMI deployments for utilities throughout the state worth roughly US$3.5 billion. The next five years will be hectic as utilities upgrade their customer connection by installing nearly 16.5 million AMI meters.

Pacific Gas and Electric (PG&E; San Francisco, California) is deploying its SmartMeter program. PG&E contracted with ESCO Technologies Inc. (St. Louis, Missouri, U.S.) to install the TWACS Network Gateway with advanced transponders. With more than 5 million electric and 4 million gas customers, it is estimated the deployment will cost nearly $2 billion. The SmartMeter program will introduce time-of-use rates, demand-response features through programs like Critical Peak Pricing, and provide capabilities such as outage detection and assessment and remote connect/disconnect for electric customers.

Another California utility, San Diego Gas & Electric (SDG&E; San Diego, California) received CPUC approval to begin its “Smart Meter” technology project. SDG&E will replace 1.4 million electric meters and retrofit 900,000 gas meters at a cost of about $572 million. AMI technology will allow SDG&E to develop a system capable of collecting and storing data from meters on an hourly basis. SDG&E customers will have improved services to manage their energy usage, aid in outage restoration, and provide pricing information and energy usage efficiency once time-of-use rates and critical pricing rates are implemented.

Southern California Edison (SCE; Rosemead, California) is taking a very innovative approach to improved customer service with its AMI deployment called SmartConnect. It will automate approximately 5.3 million meters. SCE envisions this to be an information backbone that allows dynamic pricing, demand response, energy conservation, efficient customer service and rapid outage response. SCE's customers will be able to see and react to their energy usage enabling simple choices to reduce costs and make consumption more efficient. SCE estimates it will spend more than $1 billion for the AMI meter installation portion of the SmartConnect program.

SCE selected Itron's (Spokane, Washington) OpenWay CENTRON meter and communications system. Itron says OpenWay is the next-generation open-architecture providing multiple channel interval data collection. The open-architecture flexibility mitigates the problems encountered by equipment using proprietary communications technologies. The CENTRON meter's functionality is enhanced by embedding Ember's ZigBee Alliance chip to provide a full two-way communications pathway to the home. It becomes the gateway to the home area network's (HAN) appliances and control systems.

HOME AREA NETWORK OFFERS OPTIONS

The 2007 FERC staff report defines HAN as a network contained within a customer's home connecting the customer's digital devices into a network. These devices include computers, heating and air conditioning, TVs and DVRs, video games, home security systems, intelligent appliances, fax machines, telephones and any other digital device with a connection.

The HAN-enabled electric meter can serve as the communication hub. It provides for remote load control over multiple in-home enhanced appliances. With two-way communications capability, the HAN can measure, verify, dispatch demand response and provide feedback displays to the customer showing billing effects associated with usage of various appliances. HAN connectivity is a new attribute for AMI, but it comes with concerns for interoperability and open standards. FERC raises concerns that the utility-owned meter should serve as a connection point to the HAN; otherwise, the AMI-based gateways will only serve to exclude competitive third-party HAN solutions.

The Grid Wise Alliance addressed these and other timely issues during its conference in Albuquerque, New Mexico, U.S., in 2007. The conference theme was the issue of interoperability in the intelligent grid. One session focused on the possibilities of independent HAN installations operating around the electric meter rather than through it. This approach would exclude the utility-owned meter allowing for more competition for the customer's energy usage. Some authorities visualize residential customers buying HAN-enabling network equipment at the big-box-type electronics stores much as we buy wireless computer networks now. The home computer would talk to the smart appliances and connect to a third-party energy controller. Commercial and industrial customers are doing this now in many deregulated states. There is no reason residential customers could not do this, too, when the technology is fully deployed. It is an issue to watch as AMI installations and customer energy programs increase. The customer wants choices, simple solutions to energy issues, new services, and they want it as automatic as possible. A poor decision by a utility will certainly provide some third-party entrepreneur an opportunity to provide better customer service.

TEXAS FINDS AMI USEFUL

In Houston, CenterPoint Energy is testing an AMI network engineered by IBM running on open software. It uses Itron's OpenWay meters and Comverge's SuperStat with digital control units. The demand-response pilot program initially will be installed in 500 homes in Houston. This is the first deployment of a ZigBee-enabled demand-response system. CenterPoint's customers will be able to control air conditioning and heating costs by taking advantage of time-of-use rates. By using open software, this system's interoperability will allow customers to use control devices available from any manufacturer using the open software controlling the network.

Austin Energy contracted with Cellnet Technology Inc. (Alpharetta, Georgia, U.S.) to install more than 230,000 new advanced meters in its service territory. Cellnet is installing its two-way communication wireless UtiliNet mesh network and solid-state meters. Austin Energy expects to benefit immediately once the installation is completed.

Austin is a city with a population of nearly 60,000 college students. A large percentage move into housing at the beginning of each fall semester and move out at the end of the following spring semester. Austin Energy has to scramble to provide service to connect and disconnect this largely transient student population. The utility estimates 120,000 annual “truck rolls” are needed to meet the customer requirements for service at an estimated cost of $70 per service call. Austin Energy will be using Cellnet's UtiliNet system to make the student scramble disappear. The UtiliNet system will have the ability to remotely read the meter, disconnect the service or reconnect the electric service without sending personnel to the customer's location. The customer will get quicker service and the utility will save resources.

INDUSTRY REWARDS AMI INNOVATION

United Illuminating Co. (New Haven, Connecticut, U.S.) recently received the Global AMI Utility Peer Group's 2007 Metering Award for the best revenue assurance initiative. United Illuminating installed several systems and software to support improvements to its metering and customer service programs. United Illuminating employed a Cellnet fixed-network radio-frequency advanced metering system in 2003 and a new billing system from SAP. It also installed Oracle's mobile workforce management system, which allows the company to dispatch work through a wireless network directly to the field staff. United Illuminating also has used its Cellnet advanced metering system to support energy-efficiency programs designed to empower customers with Internet-based energy analyzer tools and historical information to help them make informed decisions about energy use and conservation. In 2006, United Illuminating reported a 240% return on investment and $2.1 million in revenue recovered.

Another award-winning AMI project was the Hydro One Networks Inc. (Ontario, Canada) Smart Metering Project. It won Utility Planning Network's 2007 Metering Award. Hydro One has initiated an AMI project with Capgemini and Trilliant to install approximately 1.3 million AMI smart meters in the next three years. According to Capgemini's overall project manager, the project supports all major meter manufacturers as well as a broad range of end-point devices for energy conservation, such as in-home real-time energy monitors and automated smart thermostats. Over-the-air upgrade capability ensures that as new services, devices and networks evolve, they will be supported by the systems that Hydro One has chosen.

CUSTOMER SERVICE IMPROVES

Improved customer service is the goal for all the new technologies being deployed in our industry. Hawaiian Electric Co. (Honolulu, Hawaii, U.S.) is using Oracle Utilities Network Management Systems and Oracle Utilities Mobile Workforce Management to improve its customer service. The Oracle applications are allowing access across the organization to data; and as a result, are improving outage management, speeding up the dispatch of trouble crews and keeping the customer informed to system status.

SMARTER CONNECTIONS IMPROVE INTERACTION

The customer connection is getting smarter with intelligent meters being installed throughout the world. Utilities are able to detect outages, connect and disconnect customers remotely, execute sophisticated demand-response programs and perform other customer services. Customers are getting data access, TV, Internet access and telephone service. They are able to improve efficiency in the use of the electricity they purchase and the ability to save money by employing time-of-use rates and taking part in automated demand-response programs to shave peak usage. As this technology develops, we will see more applications emerge for both sides of the meter.