What a difference a year makes. In 2004, automated metering infrastructure (AMI) was in something of a slump, but the Energy Policy Act of 2005, an uptick in natural disasters, and encouraging...
Automated Meter Reading: Two Companies, Two Strategies
tamper detection, TOU billing, RTP, and connect and disconnect services. Data is transmitted as frequently as every five minutes, allowing UE to better respond to customer inquiries. "We've seen tangible demonstrations of the system's reliability and function," says Chuck Brenner, UE vice president of information services. Wiesehan adds: "An advantage of AMR is the very low costs. [We have] cut rates three times since 1990. [Our] rates are 15 percent below the national average. We are steadily increasing customer satisfaction."
SCE&G purchased the meters and data concentrators for its current pilot from Schlumberger and has hired contractors for its 7,000 planned meter installations.
However, SCE&G still holds responsibility for operation and maintenance of the data system. Although SCE&G has looked at several contractors, including its current supplier, for its purchase
of more AMR equipment, the company for various reasons has not yet finalized plans for a purchasing order. According to Kirby, SCE&G is still evaluating the technological performance of the AMR system and determining where it makes the most cost-effective sense to deploy the system. In addition, SCE&G has not yet decided how many AMR
services it will want to offer its customers.
SCE&G has weighed the pros and cons of owning versus leasing the communication system. As Kirby sees it, however, comparing the two options is like "comparing apples with apples." He reasons that the equipment costs the same, no matter who owns and operates it. He also points out that both options carry the same fixed costs, such as maintenance and installation. Nevertheless, he admits to certain obvious advantages and disadvantages.
One advantage in leasing the information system, Kirby notes, is turnkey service. In the case of meter reading, that term can mean different things to different companies. According to the American Meter Reading Association, "turnkey" AMR may include all or any part of the following services: installation of the meters; providing the software that collects the data from the meters; linking the AMR system that collects the data to a billing system; and operation, maintenance, and repair of the AMR system. Additional services can be included, but any and all services are agreed upon by the vendor and the utility.
On the other hand, Kirby notes, "When you don't own it, you can't earn on it . ... You must work under a business contractual agreement." As Kirby explains, by owning the equipment the utility can use it for other services, thus earning a return on the investment. All revenues are retained within the company, excluding the initial startup costs. Kirby reasons: "It's more a philosophy, 'Do we want to own the information system or let someone else take over and do it for us.'"
Like SCE&G, UE also considered ownership, but decided to lease because the responsibility of installing, operating, and maintaining the network falls to CellNet. For its part, however, CellNet balks at the term "lease." Instead, the company views the contract as a partnership, with ownership on both sides.
"We are selling the service of delivering information to the utility over our network. The utility owns