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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

of those. We expect to have 1.6 million electric and gas meters. That will be 100 percent of all of our customers in Connecticut and Massachusetts," Scott says.

"We are using flexible technologies that allows us to use the drive-by technology. But the technology allows us to interchange the circuit board, [and] upgrade the meter to do more sophisticated communications. We [expect to be done] by the end of next year," he says.

Yet, while most residential customers will receive mobile vehicle AMR service, Northeast Utilities is providing daily interval metering to high-end commercial and industrial customers that are 350 kW and larger. Scott points out, "We also offer services for our customers where customers have choice of the meter that they want. If they are willing to pay a fee for a higher-level meter, they can also get this interval meter."

But, a May 23 study by ICF Consulting on demand response found that customers are reluctant to expend funds and effort to install interval meters, communications, and software.

"[M]onitoring prices and actively participating in demand response programs take time and effort, in addition to corporate commitment and oversight. For some organizations, this type of participation is quite daunting and there can be strong reluctance to move into unknown or uncertain business areas," says the ICF report.

Scott doesn't believe that anyone in the utility industry is really advocating interval meters for all customers across the board-but the New England ISO has been a big proponent for the establishment of demand-side programs.

"There is a cost associated with interval metering. It doesn't come for free. So, who [pays for it] and how is that extra cost paid for? Generally, a large customer [interval metering] is something you need anyway for their rates-and for our customers 350 kW and larger it's a natural part of their rates," he says.

"[Not to mention], if some technology was necessary for us to move to in 10 years-these meters are the types of meters where you can remove the lower tech AMR board and put in the higher tech AMR board that perhaps communicates via satellite."

But while Scott can foresee $20 million cost reductions in workforce associated with low-tech AMR, Northeast Utilities does not believe widespread implementation of high-tech interval metering is cost-effective.

"Three or four years ago restructuring discussions drove the interval metering discussion. It was concluded after a lot of work that you just couldn't afford to have an interval meter on every customer. We are going through that exercise again, driven by energy shortages rather than deregulation. I think it is going to end up in the same way," Scott says.

Furthermore, Scott points out that the majority of utilities seem to prefer the low-tech solution (AMR via mobile vehicles) over high-tech (two-way communication). "The story that is not being told is that there is a lot of low-tech AMR being built."

For example, ongoing costs for mobile vehicle AMR are 10 cents a month, while two-way communication, high-tech interval metering costs are on the order of four to eight dollars