[BETA] Fortnightly

The Oracle of AMR

In search of the top trends in utility automation.

Howard A. Scott, Ph.D., specializes in utility operations technology for Cognyst Consulting. His technical and business experiences include automatic meter reading, telecommunications, project and business management, market research, and software development. He has published numerous articles including an extensive market study of the automatic meter reading industry titled .

Fortnightly:Are utilities implementing AMR on their own initiative, or is this typically part of a regulatory agreement?

Howard Scott: The answer is yes to both of those. The larger utilities are the ones we read more about. They are more heavily regulated. The small utilities also may be regulated, but you'll find that they tend to have more freedom in the regulatory process because all of the attention is on the big guys. We are beginning to see some interest in AMR being driven by regulation, but most utilities are deploying it to address their own internal needs.

Fortnightly: But are they implementing because of demand-side management programs or is it having better operability information? What is the motivation behind AMR implementation?

Howard Scott: There are multiple reasons utilities are being motivated to implement AMR. First, many utilities are striving to become more efficient. Over the years some utilities have had problems getting their meter reading staffs to reach targeted efficiency levels. They have been under pressure to reduce costs and add efficiency to their procedures. AMR helps them operate more efficiently and helps give customers reliable meter reads, which they are always under pressure to do.

Fortnightly: Why has manual reading been a problem?

Howard Scott: Let me explain the problem when a utility goes out to manually read meters. Let's consider utilities that have an obligation to bill every month (if that's their cycle). What happens if they are unable to get to your meter? What if it snowed? Say something went wrong and they were unable to read everybody's meter. When that happens, the utility issues an estimated read. They look at the history of the customer and they calculate an expected average consumption that they bill. This is an accepted industry practice.

Now, what happens if this goes on for a few months? The customer is paying bills not on what they actually consumed, but based on their history. When the utility finally gets an actual meter reading, it's not surprising for a consumer to find themselves with a huge bill (electric, gas or water) even though the estimates were based on intelligent guesses. And it's not surprising that the customer gets upset with this huge bill. They call the utility. They may call the public utility commission. Then they call anyone who will listen and say, "Hey, this isn't fair. I paid my bills," which is true. This can become a huge public relations problem for the utilities. They would much rather charge the customer the correct amount the very first time. AMR is the only reliable solution to these problems.

Fortnightly: What other things are driving AMR implementation?

Howard Scott: Many utilities have