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Metering in Real Time: A New Cost Equation for Electric Utilities

Fortnightly Magazine - September 1 1997

on the type of infrastructure, population density and terrain of the service territory. The costs would decrease if the burden were shared by other business opportunities, such as voice, data and video services; economic or community development initiatives; or leasing bandwidth to other service providers.

As Chart 1 shows, no strict correlation exists between price and technology class. For instance, a modified TOU meter can cost as much as $300 in quantities of 50,000, compared to a full-service gateway's cost of as low as $256. Therefore, any comparison of meters must also take into account their functions, as illustrated in Chart 2. At the low end, a modified kilowatt-hour meter capable of straight AMR costs $75. Assuming a traditional kilowatt-hour meter costs $25, plus another $8 to $10 per year for a human meter reader, this system would pay for itself in five years; it does not, however, offer any strategic energy management options. This type of meter would be justified if the utility plans to focus on boosting the operational efficiency of its core business of providing bulk energy and does not anticipate competition in its service territory.

Existing smart meters costing around $100 in volume provide an added benefit of load profiling. However, they generally cannot provide a reading on-demand by the utility. Therefore, these meters measure information that is useful to utility operations, but could not provide more than one or two energy management functions and do not enable "customer choice."

Advanced smart meters do provide on-demand readings, as well as AMR, TOU control and load profiling. Such meters make useful purveyors of basic energy management services. However, current models can cost as much as $500 in volume, and even then, high-volume information on demand is not possible.

Full-service gateways offer full, two-way communication between utility and customer. These full-service systems also support a range of utility services, including load control, outage notification, real-time tamper monitoring and surge protection. In addition, a wide range of value-added services, like security monitoring and home banking, is also possible with these models. However, the on-demand capability of these systems is a function of the type of communications infrastructure used.

Depending on how much processing power, or "intelligence," must be distributed in the network, full-service gateways can cost as little as $256 in volume.

Utilities must be careful to choose a full-service gateway system that will not become obsolete over the time of its expected life. Availability of communications networks is dependent on geographical location and demographics. So the choice of gateway should support multiple communications infrastructures, since a utility may choose to migrate to a new network, as it becomes available. Also, the lack of a standardized LAN interface protocol at present could bring on premature obsolescence in the future if the system cannot accommodate the eventual standard.

Return on Investment

The potential return on investment is tremendously important in calculating the cost of a metering system. A system that cannot only pay for itself, but can also generate new revenue streams could be an essential component of a utility's future business