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Low-Tech vs. High-Tech AMP: The 21st Century IT Debate

Some want to cut costs, others to improve service.
Fortnightly Magazine - September 15 2002

 

Some want to cut costs, others to improve service.

Uncertain economic times have always moved companies to find ways to cut costs. Utilities and energy companies are no different. They have turned to automated meter reading (AMR) during the past years in increasing numbers.

But many technology experts disagree on strategy: should utilities go high-tech or low-tech on AMR?

According to a recent survey by the Edison Electric Institute (EEI), in which 48 investor-owned utilities participated, 79 percent responded that they were utilizing AMR. Of that group, 37 percent chose phone line systems, 33 percent chose mobile vehicle AMR, and 10 percent chose fixed network AMR. In addition, 24 percent had chosen some other type of technology, such as power-line carrier systems or walk-by meters.

Bill Mayer, EEI's manager of customer operations, says today's AMR is a very flexible technology. A low-tech application simply uses AMR to supplant its human counterpart in collecting monthly reads. AMR does this accurately and cost effectively while at the same time improving safety and customer satisfaction. A higher-tech application, with options like interval metering and two-way communications, opens the door to many additional opportunities in the areas of demand response, service reliability, and broadband services.

Most of these high-tech options have long been available to the large commercial and industrial accounts, whose service requirements or rate schedules call for more data to be collected more often. Utilities are now deciding which level of AMR technology to deploy for the residential and small commercial classes, and whether to apply AMR surgically or system wide.

Fred Dorow, principal consultant of PwC Consulting, believes that ultimately with the multi-state utility companies, there may not be just one type of technology that best fits. "You may end up with certain types of technologies for certain segments of your customer base and other technologies for other types. It may be based on geographic location or even the type of customers that you have," he says.

Dorow adds that the choice of technology really goes back to the utility's business case. He says utilities should ask themselves, "What is the driver to use AMR? Is it truly a cost-reduction issue, or is it a customer service perspective driving them? What is that price break? Do they really have to justify this from a cost perspective that they need payback in three to five years?"

Low-Tech AMR: Northeast Utilities Plays It Safe

David Scott, manager of meter engineering and systems at Northeast Utilities is concerned about spending money on technology that provides services his customers may never want. That is why Northeast Utilities has chosen an AMR technology that is low-tech and low-cost, but can be upgraded relatively cheaply to high-tech, real-time metering services. Furthermore, customers, rather than the utility, will pay for the upgrade. Scott says customers will pay the incremental price at the location.

"We expect to have about 1.35 million electric meters converted to AMR by the end of next year. All our gas customers [were] done back in the early nineties, and there is a hundred ninety thousand

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