The cash-strapped utilities are experiencing increasing pressures to increase profitability and reduce costs. A sound solution to such utility problems has come in the form of automated meter reading (AMR) systems. The AMR systems are designed to dramatically reduce operational costs and also meet the new regulations that make demand response and outage management features necessary. The utilities expect to save at least as much as the cost of the whole AMR system over the lifetime of the system.

Frost & Sullivan finds that the North American Automated Meter Reading Market earned revenues of $1097.1 million in 2005 and estimates this to reach $2.01 billion in 2012.

“The AMR market is moving up the priority list of the utilities because of the inherent cost benefits offered by the system. The regulatory scenario is expected to keep the AMR at the top of the priority list for at least three to four more years. What with AMR benefits so high, which utility would not like to have such a system,” says Frost & Sullivan Research Analyst J. Subramanian.

The significantly higher cost of the equipment, installation and the maintenance of advanced metering AMR over traditional AMR proves to be the biggest challenge today. Advanced Metering AMR incorporates increased sophistication and improvements in reliability and accuracy, resulting in lower overall operational cost over the lifetime of the equipment. Utilities, however, are wary of investing in such a system without a strong business case.

“Utilities are carefully analyzing the business case for advanced AMR, which more often than not has proven very difficult, as many benefits of advanced AMR are intangible,” notes Subramanian.

The newer advanced AMR systems expect to have significantly lower operating costs and improved reliability along with better accuracy. This has made decision-making a little easier for the utilities.