Low energy prices have weakened the business case for advanced metering. Regaining momentum might depend on innovation to strengthen the benefits.
Advanced Metering Infrastructure Special Report: Where's the Beef?
What do customers get from AMI investments?
the notion that data are useful in the context of the bill, the “sweet spot” for detail is emerging as daily data. Pilot projects have shown daily data provides enough detail for consumers to relate day-to-day activities to electricity use. Examples include vacation days, holiday events, working days versus non-working days, extreme weather days versus mild days, and so on. Only the days that are unusual stand out—and those are the days consumers care about.
In contrast, hourly data is both too much to look at and too difficult to relate to events, because those events are so short-lived. Conversely, a chart that shows daily consumption can be simple, intuitive, and requires no training to understand (see Figure 2, “Daily Electricity Use”) .
The daily use chart tells customers how much electricity they use. By linking events with high-use days they will know why their usage varies, for significant changes. Then, of course, they need to know how usage—an abstract and meaningless concept—relates to their bills. Consumers need cost information presented in a way that is simple to understand and convenient to use.
Managing cost requires that consumers be able to understand what the cost of power is and how the cost relates to use. They have very little understanding of both, yet a simple monthly chart enabled by AMI communicates the answer very well: daily cost of power use (see Figure 3, “Daily Electricity Cost: Conservation-Type Rates,”).
The shape of costs is very different from the shape of use. Notably, the yellow bars are much higher than the green bars—as a result of “conservation rates” (“tiered” or “inverted block” in energy jargon). If this customer were on a time-of-use (TOU) or critical-peak (CP) pricing rate, the costs of power used during each TOU or CP period similarly would be shown as separate colors.
Even with very little use of residential TOU or CP prices to date—beyond pilots—the vast majority of American consumers face two or more prices each month. These are associated with conservation rates, wherein the price goes up when a monthly usage threshold is exceeded. Most consumers have a vague awareness of the concept but virtually none is aware of the moment in the month when he or she crosses the threshold. In addition, virtually none is aware of how much costs go up at that point.
In spite of bill inserts and actual bills, consumers know neither the price (per kilowatt-hour) nor the cost (per appliance or end use) of power. Yet with a simple chart provided with the monthly bill, AMI can tell them both. AMI can tell them how daily kilowatt-hours translate to daily cost, and can tell them when they have gone from low Tier 1 prices to high Tier 2 prices. At little expense, a utility could even email or automatically call a customer with a message when the price goes up each month.
Managing Carbon Emissions
Power plants produce roughly one-third of carbon-dioxide emissions in the United States. 3 Additionally, global warming is becoming a key concern for Americans and has spawned responsive