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Utilities Bullish on Meter-Reading Technology
By the end of 1996, the 400,000 urban customers of Kansas City Power & Light Co. (KCPL) will enter a new age of technology.
A real-time wireless network will bounce readings from small transmitters installed in the existing meters of every home and business in the greater Kansas City metropolitan area back to computers at the utility's customer services office.
Say goodbye to traditional meter readers, and hello to technology that will bring distribution systems out of the Dark Ages in terms of customer service.
"It's the price of admission for being in the power delivery business," says Charles R. Cole, KCPL's vice president of customer services. "If you don't have an automated data system, you're not going to be in the game."
KCPL's executives believe the new radio and cellular network will greatly improve the company's ability to control its power distribution, manage its load requirements, monitor outages, and in the not-too-distant future, enable the utility to provide time-of-use (TOU) and offpeak pricing.
KCPL signed a 20-year contract with CellNet Data Systems Inc. of San Carlos, CA, to install and operate the new technology. While there have been limited demonstration projects elsewhere, the KCPL contract represents the first systemwide, commercial application of wireless automated meter reading (AMR) by a U.S. utility.
Cole is enthusiastic about the conversion to the wireless AMR system. It's a way to "add value to the kilowatt-hour" and "the key to having a competitive advantage" at the distribution level. To Cole, automated data systems represent more than just a passthrough of efficiency gains or lower operating costs to customers.
A growing number of utilities are jumping on the AMR bandwagon in an effort to cut costs, improve efficiencies, and avoid major capital investments in new plant capacity. Industry analysts estimate that utilities spend about $2 billion a year on meter reading, which can be accomplished much more cheaply and efficiently through automation.
Kenneth M. Margossian, president and chief operating officer of Commonwealth Gas Co. in Southborough, MA, calls wireless technology the "foundation for the future" for distribution systems.
Commonwealth Gas, a subsidiary of Commonwealth Energy System, has installed 110,000 transmitters in gas meters over the past two years, covering about half of its customer base, via a contract with Itron Inc. of Spokane, WA. The meters are read by mobile vans traveling throughout the service territory. Commonwealth Gas currently is conducting a demonstration project for a fixed meter-reading network involving 100 gas and 10 electric meters, with an eye toward a systemwide application in the future. The utility also is exploring the idea of offering the AMR service to its sister company, Commonwealth Electric, which has 300,000 customers, as well as to water utilities in the area.
The potential AMR market is huge, making companies like CellNet, Itron, and their competitors very attractive to Wall Street investors and venture capitalists these days. Other providers of data communications and management services include Metricom, American Innovations, and General Electric.
Robert D. Neilson, Itron's vice president of marketing, estimates the total AMR market in North America at $10 billion. There