Utility Delivers Efficiency and Energy Conservation
Converting meters from recording into reporting devices, with the potential to be used for some form of surveillance, creates legitimate concerns about a slippery slope that assurances they won’t be misused do very little to assuage,” wrote Martin A. in a letter to the editor of the local newspaper in Memphis, Tennessee, U.S., in the spring of 2013.
Martin may have been part of a minority constituent, but he represented a small group of smart meter opponents who were very vocal.
Educating the public about the benefits and advantages of smart meters is a top priority for Memphis Light, Gas and Water (MLGW), the nation’s largest three-service utility provider. The utility has a goal of upgrading 1.1 million electric, gas and water meters in five years, a project dubbed Smart Meter 2020 by MLGW President and CEO Jerry Collins Jr. Reaching MLGW’s vision meant gaining approval for the city-owned utility to award a US$228 million contract to Elster Solutions.
The Pilot and Phase 1
The monumental task of converting 1.1 million analog meters began with a pilot of 1000. From 2010-2012, MLGW ran a demonstration pilot with 1000 volunteer households. Using 2G cellular technology, customers had access to online interval data. The overall demonstration was a success. Customers with smart meters achieved a 2.3% reduction in electricity use. Participants who opted for time-of-use rates saw an even greater decline, 5.6% on average. Post-pilot surveys showed 95% of the volunteers would recommend smart meters to a friend.
With the lessons learned about the spottiness of cellular technology (2G is currently unsupported), MLGW tapped a new vendor, Elster, in 2013 for phase 1 implementation of the EnergyAxis automated metering infrastructure (AMI) solution. This phase included nearly 25,000 households and encompassed the installation of about 60,000 electric, gas and water meters at a total budget expenditure of $10.1 million.
Once again, results were overwhelmingly positive. Daily read rates went through the roof to an unprecedented 99.95% for all three services. Utility diversion — in other words, theft — diminished because of the meter tamper alerts. Additionally, voltage alerts notified MLGW of emerging issues before customers were even aware a problem existed with their wiring or equipment.
MLGW also uncovered water leaks at almost one-third of all installation sites. Smart meters were responsible for quickly identifying water leaks on the customer side, which allowed the utility to alert homeowners of high water usage. The homeowners could make repairs before a leak negatively impacted their bill. Residents took notice of the positive results and only 3.57% chose to opt out of the program by declining an upgraded meter without fee or penalty.
Smart Meter Implementation
Building on the demonstration pilot, and subsequently phase 1, MLGW was able to garner support for Smart Meter 2020, a full conversion of its system’s 1.1 million meters. Once again, MLGW looked to Elster as the supplier for the project, effectively capitalizing on the vendor’s experience and cost- effectiveness. At the outset, MLGW was pleased to continue the partnership: “This is an exciting time in MLGW’s 77-year history, and we are delighted to work with such a respected company in this endeavor,” remarked Collins in a contract announcement press release in early 2016.
The total phase 2 project budget was $228 million. With an aggressive four-year end date looming, the project has been moving at breakneck speed. The telecommunications network build-out started in April 2016, followed by staggered meter service installations. Electric meters were deployed in May, water in June and gas in August.
Enhanced features also have come on-line in rapid succession. Prepay for residential smart meter customers launched in July 2016. Remote disconnect-reconnect functionality was available in August. Commercial and industrial customers will have access to interval data online in early 2017. Optional time-of-use residential electric rates are slated for availability in the fall of 2017. Communication that is sure to improve customer satisfaction scores, outage and service restoration notifications is coming near the project end in 2020.
In the meantime, about 15,000 installations are being completed a month. The goal is to reach a 40,000 per month pace to meet MLGW’s 2020 target. While the number of meters in service each month has increased, the opt-out rate in phase 2 has declined to 3.1%.
“Our outreach efforts to opinion influencers and the general community have helped reduce the numbers of customers who are declining meters,” said Christopher Bieber, MLGW’s vice president of customer care.
Project team members have met with neighborhood leaders and conducted a direct mail campaign. Company executives even appeared in a tongue-in-cheek video to promote the benefits and alleviate misgivings about AMI. The video is available on MLGW’s website, played at the utility’s community offices, aired on the local Memphis PBS station and offered by request on DVD. The utility considers the lower opt-out rate being attributable to the success of phase 1 and customers better understanding the benefits smart meters will offer them.
Benefits to the Bottom Line
One of the selling points of smart meters is the reduced fees. Lower connection fees are estimated to save customers approximately $2.9 million annually. Reconnect fees will save a little more than half that amount, or $1.4 million. Depending on how vigorously the local community adopts conservation behaviors, the utility estimates net savings between $8 million on the low side and upward of $39 million if MLGW customers follow trends of other energy-conscious smart-metered households.
For as many customer gains as there are with the conversion, the utility anticipates there will be significant efficiencies and savings operationally, too. Reducing 3% transmission and distribution losses is one issue the utility hopes to tackle, potentially saving $2 million annually. With about 11,000 confirmed cases of utility theft annually — undocumented thefts could make that number higher — there is an opportunity for substantial debt recovery, about $3 million. MLGW hopes prepay enrollment also will lessen bad debt and bolster the bottom line. Fewer personnel, realized through attrition, will account for $25 million each year. Demand response and energy-efficiency conservation could save another $20 million.
On the Horizon
Currently at the Memphis utility, the ability to monitor electric load on its distribution system is confined to the circuit level at the substation. Engineers in MLGW’s power quality department anticipate being able to use the AMI data to build a load profile for any point on the system by totaling the data from individual meters. Armed with this information, the utility will be able to balance circuit loads better to reduce losses. This also optimizes overall performance by reducing stress on the system and extends the life of many of the utility’s infrastructure components.
Further, from a planning and systems engineering perspective, MLGW will use smart meter data to monitor system voltages at end-of-line customers, for possible conservation voltage reduction projects, and integration into centrally controlled regulators and capacitor banks. This will enhance efficiency and energy conservation for customers while also extending the life of appliances in their homes.
Eliza King has been employed at Memphis Light, Gas and Water since 1989. She served as manager of the customer billing and metering department for seven years before she began leading MLGW’s smart meter project team in 2013.
Editor’s note: Elster Solution was purchased by Honeywell in 2015.
