Utilities and energy companies will spend, without exaggeration, billions of dollars installing Smart Metering and meter data management (MDM) systems over the coming decade, taking the first steps toward enabling the Smart Grid. The most commonly cited objectives of these endeavors are energy efficiency, asset performance, operational effectiveness, and customer service. Although improved customer value is promoted as a primary driver of these initiatives, it is easy for a utility to be caught up in the asset and technology requirements, forcing customer service to take a back seat in Smart Metering projects.

In order to improve customer satisfaction through Smart Metering, it is necessary to plan for the realization of customer value and customer service objectives well before the first meter is installed and to take a business process driven approach to systems change. Unfortunately, many current Smart Metering projects are only considering MDM with a ‘no change to CIS’ policy.

A utility or energy company must deploy an intelligent customer information system (CIS) capable of providing insight into the complex information available in the Smart Metered world. The combination of the MDM and the intelligent CIS, integrated in a way that supports change and growth over time, will be the platform for delivering customer value from Smart Metering. Many utilities are now familiar with Smart Metering, defined here as: The adoption of solid state “smart meters” that allow two-way communication between the utility distribution and retail providers and their energy consumers. Indeed, the adoption of smart meters –along with integrating metering software applications into utility IT systems infrastructure -- is considered by many to be the critical first step towards enabling the Smart Grid.

The full Smart Grid implementation, however, is a holistic approach, which combines the traditional delivery grid with sophisticated sensing and monitoring technology, IT, and communications, allowing interaction across the entire energy generation, transmission, distribution, and retail landscape. To meet the changing demands of this information-laden lifecycle it will be essential that utilities grasp the various relationships and interdependencies between the CIS, MDM and wider enterprise IT on both a technical and operational level.

To date, these subtleties have not yet been determined. Perhaps indicative of this uncertainty is the wide range of cumulative U.S. Smart Grid investment forecasts: from 2007-2020 expected between $70–120 billion. To date, 13 U.S. states have concluded that the Smart Grid is a fundamental requirement to support their energy future, with another 4 indicating qualified support, and 11 actively reviewing smart grids. Additionally, more than half of U.S. states are considering unbundling the volumetric portion of their rates to encourage energy efficiency1. This mixed commitment makes prioritizing utility spending on assets and information technology a difficult exercise.

Smart Grid and Smart Metering activity is by no means restricted to the United States. Victoria and New South Wales in Australia have already undertaken significant Smart Metering installation projects, and an agreement was reached in mid June for the introduction of Smart Meters nationwide in Australia. Yet not unlike many North American utilities, certain parts of the Australian utility infrastructure remain cautious about the metering rollout, believing the net benefits will only be achieved at the lower end of the investment range. Likewise, many European states are also engaged in Smart Grid-like programs and corresponding debates.

Besides heavy investment requirements, there is also the issue of Smart Grid project scope. Perhaps due to the high profile coverage of Advanced Metering Initiatives and Meter Data Management, there is a tendency by all concerned to focus solely on Smart Metering hardware and the management of increased data volumes. This is a reasonable first step - after all, the “smart meter” itself, data capture mechanisms, and software must all be in place to collect the data that will enable the future Smart Grid. Accordingly, Meter Data Management systems are predicted to make up a significant portion of utility hardware and software IT spending over the next 3 to 5 years.

Annual expenditures in the U.S. alone are projected to increase from a current level of about $25 million in 2007 to more than $200 million by 20092 But, before investing heavily in Smart Metering and MDM technologies, it is important to remember that, “installing a meter is but one small step in achieving the larger value of the entire system”3. Utilities must ensure these investments fit long-term, value achieving strategies across the full generation-delivery-consumption-billing-service lifecycle.

This means ensuring that appropriate attention and investment in not only the generation-delivery-consumption end of the lifecycle but also on the billing-service end. Meter-to-cash systems will play a big part in the success of the Smart Grid, as it evolves.

Smart Metering Objectives
Whether the project is for a vertically integrated utility, a distribution/network company responsible for the installation of smart meters, or an energy company or service provider who will use the data from the physical meters, setting the right goals at the outset of a Smart Metering project will have long term impacts on the success of the investment.

Utilities evaluating or implementing Smart Metering often have slightly different articulations of their project objectives, but they largely fall into five categories:

1.    Regulatory/Legislative
2.    Infrastructure/Asset Planning and Efficiency
3.    Environmental and Social
4.    Utility ROI and Benefits
5.    Customer Benefits

Although all emphasize benefits to consumers, the reality is that they are all approaching Smart Metering and Smart Grid in different ways. To further complicate matters, the industry is recognizing that even customers within similar market segments have differing needs. These varying styles of customer communication and engagement make delivering on the customer value of Smart Grid projects a complex issue. When scanning utility Smart Metering and MDM pilots and current initiatives, the project realities do not always appear to support these customer value objectives, particularly not in the early phases.

One theory for this lack of customer focus is that many Smart Metering and MDM implementations fail to plan sufficiently for the desired customer experience and the resulting impacts on CIS integration and system requirements. Many begin a first phase of MDM implementation with a stated objective to “change no rates or products and minimize the impact on the CIS.” According to research firm UtiliPoint International’s Ethan Cohen…

“The idea that real time communication about rates will make the grid ‘dynamic’ and ‘responsive’ to customer needs is only a small part of the bigger picture.  Such ill-founded investment will find the unwary utility in a hotbed of future trouble in rate-cases, and with customers, because many utilities will have simply invested in a technology without tangible operations or cost of service improvement.”

Considering the importance of need for well managed customer relations, regular and varied communications, and accurate and informative billing through these times of change, it will be imperative that utilities make these Smart Metering investments only after planning a customer-centric approach to system change, integration and deployment.

The Intelligent CIS
The objective of the Intelligent CIS is to enable utilities to fully realize customer service and customer value potential from Smart Meter and Smart Grid initiatives. The Intelligent CIS addresses impacts to the end consumer, the front office and the back office and integrates with systems that will manage impacts to the field assets and the grid. With these objectives in mind, an Intelligent CIS allows the utility to:

•    Support customer choice;
•    Provide valuable customer information services through modern communication channels;
•    Enable the intelligent use of data; and,
•    Allow for flexible integration and creative deployment options across MDM and other utility systems.

Support Customer Choice
In supporting customer choice, the Intelligent CIS will enable new, creative customer products and programs that some competitive utilities have explored, but that have not typically been ventured by traditional utilities outside of their largest use customers. These include real time pricing, interval pricing, index pricing, dynamic pricing, time-of-use, advanced net metering (grid buy-back), demand response support and/or integration, conservation and curtailment programs, and incentive based energy efficiency programs. The Intelligent CIS will also enable multiple product and service bundles, and tailored pricing plans with options based on energy requirements and responsiveness to load and price signals.
Those utilities offering these services today often do so through a standalone complex billing engine or targeted C&I billing package, rather than an integrated CIS billing engine. The Intelligent CIS takes these proven system capabilities and refines them for business process scalability, supporting advanced billing business processes for the mass-market customer base.

As Smart Metering and Smart Grid begin to reach maturity and technologies accelerate, the Intelligent CIS will begin to incorporate programs for “modern pre-payment” and management of a customer usage account, potentially independent of a particular site or meter. Utilities will also need to consider how to support Plug-in Hybrid Electric Vehicle (PHEV) Programs, which will require users to have portable usage accounts when recharging their car at various locations, and usage management that facilitates recharging at low usage times.

The explosion of customer choices may drive customers to either accept a utility’s recommendation through automation and customization of preferences, or encourage more customers to actively engage in the management of their energy footprint. The Intelligent CIS will support different customer profiles and facilitate both passive and active engagement in the Smart Metered world.

Valuable Customer Information Services
Utilities and energy companies are being asked to provide new and valuable information services to customers through various channels. In this world, utilities will be able to provide new views of usage information and tools for understanding usage and billing data, intelligent presentation of usage over time, and reporting on energy and cost savings.

Taking advantage of the wider range of modern technologies, utilities will also be able to dramatically improve outbound communications services. The Intelligent CIS will facilitate communication with customers in new and varied ways such as custom web portals, in-home displays, text messages, cell phone alerts, interaction with appliances and more. Customer communications will be driven by preferences and settings, and could include notifications of usage and price peaks, curtailment signals, potential savings, and alternate product choices.

Once initial information services are provided, the Intelligent CIS will begin to offer new usage analysis and product offerings for consumer product selection based on customer profiles, similar to the technology already being used today in mobile telecommunications products and web-based product sales tools.

Intelligent Use of Data
The Intelligent CIS will turn masses of usage data into useful customer information for both the customer, and the utility. In the short term, the focus should be on customer intelligence: offering information to consumers to help them to make sense of usage and billing options, offering intelligent recommendations, providing monitoring tools coupled with customer’s chosen settings to allow “hands off management”, and combining customer account information and usage information with historical site usage information and other variables for more accurate recommendations.

Once a significant history of Smart Meter data is obtained, the focus will turn to utility intelligence from customer data. This may include customer segmentation by energy requirements and responsiveness, historical analysis of usage and customer data for segmentation and focused marketing strategies, detailed product offering analysis, dashboards for accurate real-time analysis of customer and billing related information, and analysis of successful and unsuccessful products and services. These more complex analytics will require an intelligent framework capable of pulling from multiple source systems to supplement the information stored within the CIS.

With this wealth of new analytics, utilities will be better positioned to make informed decisions about load management, customer management, customer acquisition and their product, marketing and revenue mix.

Smart Integration and Deployment
Integration and deployment within the utility’s systems architecture is at the foundation of the capabilities of the Intelligent CIS.

The Intelligent CIS offers flexible deployment options that allow the CIS to couple successfully with MDMs of all different “flavors”. At its core, the Intelligent CIS is built on Service Oriented Architecture for efficient and flexible integration. This enables business-process based design, independence from expensive and proprietary integration hubs, an ability to decouple specific systems and sub-systems, and a focus on the customer through the core CIS processes.

The Intelligent CIS employs SOA to allow flexible, phase-able integration through the componentization of CIS and MDM functions, and helps to minimize redundant data with designated systems-of-record and future options for modularized, swappable CIS subsystems working with MDM.

Technical scalability and performance is also a fundamental requirement for the Intelligent CIS which will use high volume data for billing and customer service. The Intelligent CIS also becomes an advanced real-time system requiring proven support for robust operations such as real-time interval reads and advanced billing, what-if scenarios utilizing up-to-the-minute data, immediate bill projections using both actual usage and intelligent estimates, and real-time service orders such as disconnect and re-connect.

Finally, the Intelligent CIS will allow for robust integration with systems and sub-systems beyond CIS and MDM. With SOA and advanced-automation systems, truly visionary Smart Grids are theoretically possible. Data from metering, MDM, and other grid systems will be integrated fully with CIS, OMS, and asset-management, and intelligent processes will make full use of that data in restoring outages, optimizing the efficiency of assets and giving the company and customers all the information they need to make decisions about energy services.

Utilities of the Future
As utilities move into Smart Grid pilots and Smart Metering initiatives, it is vital to consider the next steps carefully, a perspective supported by industry analyst, Warren Causey…

“In order to prepare for this whole new ‘Pandora’s Box’ of changed utility/customer relationships – particularly at the residential level – utilities must have new-generation Smart Grids and equally smart customer-facing systems,” says Warren Causey, an analyst with Energy Central. “These new-generation systems, especially MDM and CIS, must be flexible, adaptable and capable of meeting rapidly evolving customer-interaction requirements,” Causey continued.

“Moreover, the requirements will be evolving very quickly over the next few months and years, so there is little time to waste in getting these systems in place.  The Smart Grid definitely will require a Smart CIS and other much more intelligent systems as well.  Last-generation CIS and other major systems will not enable utilities to cope with the new world they are entering.  Perhaps the most pressing issue is that utilities are going to be providing less product for more money, and that is a customer-relationship issue that is going to require all the technological, and human, intelligence that can be brought to bear,” Causey concluded.

The leading utilities and energy companies of the future will be those that go beyond support for high volume data to gather intelligence and insight from that data for both the business and the consumer. They will design business processes that begin and end with the customer and will integrate customer and billing measurement, analytics, and continuous improvement into the core of their Smart Metering IT solutions. They will think beyond the meter to the customer and will continue implementing smart processes and intelligent systems until the customer benefits of Smart Metering, and ultimately Smart Grid, are realized.

(Read the complete whitepaper entitled, “The Intelligent CIS in a Smart Metered World,” co-authored by Kelly James and James Braatvedt, at http://www.peace.com)

About the Author
Kelly James is a Director of Market Strategy for First Data Utilities and has worked in the utility software industry for eight years in North America, Australasia and Europe. Currently responsible for managing competitive and transitioning utility markets, Kelly drives numerous product strategy programs related to CIS, Web Self Service and Smart Grid initiatives. Prior to joining the product strategy team, Kelly was Director of North American Sales Consulting and has also held product analyst, sales engineering, and business solution architect roles within the organization. Kelly holds a Bachelor’s degree from the University of Pennsylvania.