Smart Metering and the latest advances in automated metering infrastructure (AMI) are at the foundation of customer-oriented programs that contribute to Utilities’ “Green Initiatives”. As such, Smart Metering programs and the underlying support systems are driving a major transformation in the business model of how the Utility operates, requiring rapid and pervasive deployment of reliable, secure and two-way broadband communications across its infrastructure. In this article, Aeris® Communications will provide an overview of Smart Metering and AMI, and how smart meters and data communications technologies work together to provide an end-to-end solution to support the Utilities in their quest to deliver better services in a more ecologically friendly and cost-effective manner.

Industry Challenges
The Utility industry has changed slowly over the past century. Until recently, the biggest concern was managing changes as directed by the market in a timely and orderly manner for increased power generation or new distribution methods. Times have changed. In the upcoming decade, there will be many compelling reasons driving the Utility industry to change that simply were not factors in the past.

Major challenges faced by the Utility industry in the next ten years include:

• Energy demand is projected to increase over 60%.
• Over 50% of the Utility industry’s skilled workforce will retire with job experience and knowledge that cannot be replaced one-for-one.
• Global demand and resource scarcities will drive energy costs to unprecedented heights.
• Government mandates, carbon caps, and regulations will limit new generation sources to “renewable” and “green” only.

The Industry must adapt to meet these challenges. A primary key to success for Utilities will focus on the real-time collection of data from all end points with ‘smart devices’ through reliable, secure, real-time, high bandwidth communications network(s), and then deliver the information and facilitate automation and remote control back out to the devices.

Smart Meters and Smart Metering Programs have emerged as major tools to address these challenges, both for now and for the foreseeable future. To fully grasp this, however, we will examine how the real-time use of the data collected by these ‘smart devices’ fits into the Utilities’ overall business objectives to be more energy efficient, customer friendly, and investor responsible.

The Evolution of Smart Meters and Smart Metering Programs

First Generation Smart Meters - AMR
Deploying Smart Meters was one of the first initiatives the industry took towards becoming “Smart Utilities”. The first generation of Smart Meters was built around the simple Automation of manual Meter Reading (AMR). This was a point solution that met the specific need of reducing meter readers, but could not be directly applied to more advanced or alternative uses. The ROI for this solution was specified against the simple business case of replacing meter readers.

However, AMR did not go far enough in terms of a full set of capabilities that would deliver much broader ROIs and much less impact energy use by the consumer. Many AMR programs were approved and contracted to deploy one-way or one and one half-way wireless communications technologies, all of which had very narrow bandwidth. The limitations of these communications choices are now becoming widely understood, particularly in the context of newer definitions around Automated Metering Infrastructure (AMI), the second generation of smart metering solutions.

Second Generation Smart Meters - AMI
AMI adheres to the principle of more functionality and automation with more frequency. AMI is evolving into an end-to-end solution with capabilities beyond AMR - but based on the lessons of AMR. Upon realizing the benefits of reducing or eliminating meter reads, many Utilities identified all of the functions carried out by field personnel that can now be done remotely over the air including service connect/disconnect, outage detection, and meter reads. In addition to automating field service functions with real-time communications, real-time pricing becomes possible, too.

Third Generation Smart Meters – AMI+DR
The third generation of smart metering solutions, which we’ll call AMI with Demand Response (AMI/DR), essentially creates a real-time market for electrical power that links supply all the way out to demand, on a real-time or near-real-time basis. AMI/DR involves the full integration of energy usage data (demand), connected to and compared with real-time supply and pricing information to automatically determine how to optimize market conditions. Market conditions can determine changes in supply needs, load control shifts from one area to another, and even voluntary and/or forced reduction of demand usage at the retail level.

Some of the AMI base capabilities will move to more real-time intervals, such as pricing. Time of use (real-time) pricing allows customers to be aware of variable energy costs and make voluntary adjustments as to when they consume electricity. Critical peak pricing reaches out to the consumer and allows them to see the real-time price of electricity, and determine what adjustments to make now to how and when they consume energy. Conversely, it also allows the Utility to make profit based decisions around reducing demand versus buying short term capacity at high demand price points.

Demand Response (DR) enables full command and control over the consumption of electricity. Many consumers, both Commercial/Industrial as well as residential, have voluntarily enrolled in DR initiatives. These incentive based programs allow the Utility to reach out and “turn down” energy consumption in real-time as needed, in effect creating the concept of ‘deferred generation’ or ‘avoided production’. A fully utilized DR system relies on an efficient two-way communications system between the energy source or provider and the consumer.

Utilities’ Objectives for Installing Smart Meters
There are four reasons Utilities are implementing Smart Meter programs:

• Smart Metering transforms the way Utilities do business.
• Smart Metering improves customer service.
• Smart Meters are a key component of an infrastructure with integrated distributed resources.
• Smart Meters enable customers to better manage internal and external energy resources.

1. Smart Metering transforms the way Utilities do business.
Utilities initially looked at Smart Metering as a labor saving program. Next to the postal carrier, the utility meter reader had become an all too common fixture in the neighborhood. Manual meter reads were expensive and prone to inaccuracies. The data collected from Smart Meters has supplanted the manual process.

The customer connect, disconnect and reconnect process was another expensive proposition for Utilities when the only method was to dispatch service personnel to the residence. Smart Meters that could respond to customer connection requests virtually eliminated the need to do this in all but special circumstances.

The Utilities also benefited from knowing the status of electricity delivery in real-time across their customer base. Armed with the data that identified the exact location of the service disruption, utility trucks could now be dispatched directly to trouble spots better utilizing valuable time and resources.

2. Smart Metering improves customer service.
The same Smart Meter that relays electricity delivery status to the power company notifies the customer when their service is out at the Utility level, instead of a local blown fuse or house wiring failure. When installed, customer back-up or reserve electrical systems can be triggered to supplement power. The customer is best served with reduced or no outage time.

Satisfied consumers see the Utilities more favorably, and are more apt to support and participate in Utility programs that make better use of energy resources. All of this results in a healthier business climate for the Utilities.

Data Communications Needs for Objectives 1 and 2
Meter reads, service connects, service disruptions and delivery status have relatively low bandwidth data delivery needs. Several data communications technologies can reach out and carry this information effectively from end to end including power line, private wireless and cellular wireless. However, the ability for the data communications transport to be able to readily adapt and deliver the throughput necessary for the next two Utility business objectives should be a determining factor when selecting communications technologies.

3. Smart Meters are a key component of an infrastructure with integrated distributed resources.
The real-time knowledge of electrical power needs and conditions provided by Smart Meters with robust two-way communications promotes the use of “Distributed Generation” from customer-owned power sources.

Distributed generation refers to generating power from many small and ecologically friendly energy sources that are collectively efficient and located closer to the consumer, then putting this energy back into the grid as supply. Examples include tapping into residential solar panels, windmills, and excess stored electricity in plug-in electric hybrid vehicles (PHEV) batteries. The customer is, in effect, turned into a producer and reimbursed by the power company with energy credits, rebates or cash.

The opportunity for Utilities to tap into these new energy sources with little upfront investment is tremendous. The challenge for the industry is to manage the fragmentation of control for generation from the original small number of dependable and controlled power generation sources to an open market where consumers become generation sources. This reciprocating market of supply and demand must be managed both at the individual and aggregate level.

4. Smart Meters enable customers to better manage internal and external energy resources.
Third and fourth generation (AMI and AMI+DR) Smart Meters directly address this objective. In the home, the Smart Meter can be connected to HVAC and other major power-consuming appliances to control or curtail usage when power costs exceed benefits. Customers actively participate on the grid and are paid, whether directly through programs mentioned above, or awarded rebates, credits or lower tariffs to reduce their energy consumption.

Smart Metering programs provide customers with real-time pricing - price signals based on time of day and energy conditions, allowing them to choose to consume now and pay, conserve, and/or contribute to the grid. Encouraged customers can change their load shape and, in turn, the Utilities’ overall load demands.

Data Communications Needs for Objectives 3 and 4
Both distributed generation and active participation programs require a constant real-time flow of information both ways (interval data) with a footprint that can be installed easily, unobtrusively and quickly. Also, many of the information gathering and dissemination devices will be installed by third parties, or even by consumers themselves. These devices will also be coupled with various meters, thermostats and control panels, and integrated within home energy automation systems.

Communications Platform Selection
Utilities are putting significant amounts of time and energy into the selection of new physical equipment (smart meters and other devices), but are not putting the same emphasis into choosing the right communications architecture that will support the Smart Grid of the future. It is essential that Utilities examine their “Green” initiatives and look deeply at the communications network(s) that will support all generations of deployment, up and down the grid, and over multi-year periods of time. There are many technology candidates that can be utilized to provide this information pipeline. It is very unlikely that only one communications technology will be used by a Utility for all devices in all cases.

Aeris believes that a compelling case can be made for specialized cellular networks as a major piece of the communications backbone to support the Smart Utility. A ruggedized data-specific cellular network has been in place for over ten years delivering reliable and robust communications to several different industries, including Utilities. What has changed dramatically over the past few years is the improvement of broadband communications and its much lower price points. By matching specialized network services developed by Aeris with the public carriers’ investment in pervasive broadband wireless networks, Utilities can speed up deployment time, meet reliability needs, and reduce costs today.

About the Author
Mr. Purpura, who joined Aeris in 2007, is responsible for all marketing, product management and customer solution activities.

Mr. Purpura has more than 15 years experience in Internet, infrastructure software, and VoIP communications companies both private and public. Most recently Mr. Purpura led New Ventures and Strategic Alliances at Platform Computing, the leading middleware company in enterprise grid middleware. Mr. Purpura has also held various senior executive level positions across Marketing, Product Management, Strategy, and Alliances functions at GoldenGate Software, a leading data transaction middleware vendor; Network Inference, a leading Policy Engine vendor (acquired by WebMethods); and Aspect Communications, a leading Contact Center vendor.  Mr. Purpura also served as Director of Product Management at Oracle where he led the initial market strategy and launch of Oracle’s Application Server product division.

Mr. Purpura holds a Bachelor of Arts in Political Science degree from the University of California, San Diego.