Advanced metering is capturing attention at utilities around the globe. Initially, industry analysts saw it as a way to restrain environmental damage from electricity consumption. Now, it’s helping to break down utility departmental barriers and facilitate cross-organizational business processes.
Environmental issues are Topic Number One at utility gatherings. Industry leaders around the world are re-examining the link between energy, emissions, and global warming. Do utilities have an obligation to help slow damage from energy use? If so, how can they best fulfill that obligation?
Most utility leaders accept that obligation. But there is little consensus on the best response.
Clearly, yesterday’s environmental programs—discounts on compact fluorescent light bulbs, exhortations on insulation—were less than effective in staving off potentially catastrophic environmental change. But if those programs are not the answer, what is? Should utilities revise pricing structures? Should they hope markets alter consumption habits? Should they re-imagine the obligation to serve as an obligation to conserve?
Such questions are helping to surface new environmental proposals. Advanced metering is one of the most compelling.
The Rise of Advanced Metering
The road to advanced metering starts more than 20 years ago, with automated meter reading (AMR). Designed to replace human meter readers, AMR uses radio, satellite, or wire signals to read consumption totals remotely. Most utilities, however, found AMR costs exceeded meter-reader salaries and benefits. AMR landed on the sidelines.
But not everywhere. One usage area proved cost-beneficial. Industrial and commercial firms with energy managers found significant advantages in combining AMR with
interval metering.
Interval metering (or “complex billing”) combines remote meter reading with meters that record consumption in intervals of an hour or less. 1Utilities use them to charge different prices for energy during different time periods. Interval meters do not require reprogramming when prices change. Software processing accommodates those changes, leaving the meter to record only consumption.
Interval metering permits commercial and industrial firms to accept utility incentives to cut consumption during high-demand periods. That means utilities can serve more customers with fewer lines.
Interval metering is also a popular substitute for utilities’ previous approach to supply or transmission constraints: “all or nothing” interruptible supply programs. With interval metering, firms can reduce energy consumption without cutting it off completely. They thus ensure “soft landings” for industrial processes that cannot be simply turned off midstream. And utilities can readily track—and penalize—customers that do not live up to their contractual agreements.
As interval metering spread, users discovered unanticipated bonuses:
• Lower energy supply costs. In liberalized energy markets, companies use interval metering to aid participation in competitive markets.
• Better equipment performance. Interval metering provides valuable information about equipment efficiency and potential problems. It permits companies to substitute preventive maintenance for repair or replacement. Production lines experience fewer unanticipated shutdowns.
• Consumption reductions. Detailed analyses of interval data point out ways to reduce both expensive peak consumption and total energy use.
This last bonus—conservation—has clear environmental implications. When utilities can pinpoint the times and places where demand is dropping, lower demand means less generation. That translates directly to fewer emissions.
It’s only natural, then, that those seeking emissions reductions ask: Given the same tools, might all customers—l business and residential alike—achieve similar use reductions?
The jury is still out on the answer. But the potential is clear.
Data Ownership
The potential environmental benefit of interval metering is so compelling that utilities have moved beyond concepts. Some are now planning ways to implement mass-market interval metering.
Planners almost immediately confront a significant question. How should we handle the massive increase in data that accompanies interval metering? The size of that increase is significant. In the residential arena, for instance, hour-long intervals would replace today’s typical 12 annual consumption numbers per residential customer with 8,760. That’s a 730-fold increase.
What hardware and software can handle that volume? And what new procedures will ensure that data processing flows smoothly?
The answers to those questions spring in part from current utility organization. In most utilities today, billing departments “own” metering data. That has worked well because today’s metering data is largely irrelevant outside billing. Few other departments need the monthly consumption totals that characterize traditional residential billing.
Interval meter reads, however, can be useful to many departments. They can provide information on load size and shape. That helps reduce generation and supply portfolio costs. The reads are even more valuable when combined with metering features like two-way communication between meter and utility, voltage monitoring, and “last gasp” messages that signal outages.
These new data provide departments outside billing with an information treasure trove. But few departments want to play second fiddle to a billing department inclined to put its own needs first. Even if billing hardware and software can technically handle the increased data volume, can Billing handle a significant increase in interdepartmental data demands? Will it respond to other departments’ needs for real-time data transfer?
Some utilities may answer yes. Most are skeptical. They fear that if billing takes on major additional functions, bill production—and the associated utility cash flow—will falter.
Separating Metering and Billing
Enter a new concept: meter data management (MDM). The MDM is a new, independent application dedicated to gathering and storing meter data. It can also perform the preliminary processing required for different departments and programs. Most important, MDM gives all units equal access to commonly held meter data resources.
MDM’s independent service function may be further refined through the addition of a meter data warehouse. In situations where both exist, the MDM typically manages real-time, transactional processing while the warehouse handles data extraction, reporting, and analytical processing.
Separating the MDM from the billing solution has clear advantages. It maintains bill production efficiency while providing even-handed data access to all departments. The separation also permits a utility to add security to meter communications and data without complicating customer access to bill payment and analysis websites.
Challenging Departmental and IT Structure
MDM is, for most utilities, a new type of application. It shatters the typical utility IT model in which each department “owns” its own set of applications.
MDM treats every department as its “owner.” It thus forces departments to work together. If MDM is to serve all equally efficiently, then the various stakeholders must share information. They must agree to application configurations that serve all needs optimally.
This process of information sharing is proving eye-opening to departmental heads. Suddenly, sharp minds have the knowledge and tools to propose better, more efficient program administration.
In other words, MDM is becoming an avenue for rethinking utility business processes independent of existing departmental boundaries. It is the first major utility silo-breaking application.
Expanding the Concept
Independent applications serving multiple departments are not, of course, the only software approach to breaking down departmental barriers. Application integration has long played a role, though its expense has prevented utilities from developing a full complement of data interchanges that could better pierce departmental barriers.
Far less successful were attempts to develop composite applications, popular a few years ago. Composite applications, consisting of individually addressed functional modules, were touted as a major breakthrough to cross-organizational business processing. Advocates foresaw a significantly lower total cost of ownership.
Software developers soon realized, however, that multiple applications calling on each other’s functions more or less randomly were unlikely to facilitate cross-organizational business flow. A more probable result was computing resource chaos.
MDM avoids that chaos while also moving beyond simple software integration. It did not originate as a conceptual computing innovation. Its origins were strictly pragmatic—the need to handle efficiently a potentially huge increase in data volume. It has evolved, however, into something much larger.
MDM, by providing both unique and common resources to multiple applications, has the potential to advance the quest for multi-departmental business process orchestration. If it succeeds in this role—as it very likely will—other functions may quickly follow suit. Scheduling, for instance, might be pulled out of asset management, field management, and appointment setting and consolidated into a single instance that serves multiple departments.
Multi-departmental applications like MDM, owned cooperatively among departments rather than individually, could thus be the “missing link” to facilitate the smooth flow of business processes across the organization. They could prove a process orchestration concept that increases the efficiency with which utilities serve all stakeholders.
About the Author
Guerry Waters joined SPL WorldGroup—now Oracle Utilities Global Business Unit—in 2000. Previous positions include Vice President of Energy Information Strategy at META Group and CTO and Director of Technology Strategy and Engineering at Southern Company. He focuses on customer-related, enterprise-wide IT strategies and business processes.
____________________________________________________________________________
1Technically, interval metering does not require remote reading. In practice, however, data storage at the meter level generally proves less cost effective than sending readings serially to a central location.
