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Advanced Metering Infrastructure Special Report: Where's the Beef?

What do customers get from AMI investments?

Fortnightly Magazine - September 2007

would most of the relationships between use and other factors be communicated, without the approach of segmented daily data linked with billing period.

Another recent development in AMI policy is in-home devices and home area networks (HANs). The Texas PUC, in its recent rulemaking, adopted a HAN interface in the meter as a basic requirement in all advanced meters qualifying for cost recovery. In its final approval of the AMI application from San Diego Gas & Electric Co. (SDG&E), the California PUC instructed SDG&E to cooperate with the other utilities in this area, but fell short of ordering its implementation.

A HAN interface is intended to support control of thermostats and, eventually, appliances. The interface also can provide real-time data to an in-home display. Companies such as Southern California Edison foresee the day when consumers go to Home Depot and pick up HAN-standards-compliant devices. These then would be provisioned on the meter or AMI network via a secure transaction with the utility.

Support for the HAN-interface concept illustrates how substantially regulator expectations regarding AMI have grown in the year since approval of PG&E’s AMI rollout. At the time of the PG&E decision, the consensus had been that hourly data and support of time-of-use, critical peak, and other dynamic prices was sufficient. Part of the shift in regulators’ perceptions is due to greater capabilities of AMI technology now offered by the market, and part is due to the development of an integrated view of AMI capabilities.

AMI: The Integrated View

In the integrated view, AMI is not about remote meter reading. Instead, AMI is about improved customer-service operations, demand response, and fighting global warming. For example, Ofgem, the electricity regulator in the UK, expresses high expectations for the potential of AMI to support electricity conservation and, as a result, to reduce carbon emissions. 7

In the integrated view, AMI empowers consumers with information and control: information on prices, costs, and usage with convenient, automated control. This combination works together to achieve consumer goals around managing costs and carbon emissions, while increasing reliability through reduction in peak demand at critical times. A simple example is the combination of price information and control: Peak demand reductions from this combination are roughly double those of either strategy alone (see Figure 6, “Peak Load Reduction”) .8

Consumers, as represented by their regulators, are expecting much of AMI. These expectations include significant levels of demand response or electricity conservation to bridge the gap between utility operating savings and AMI capital and operating costs. Regulatory approval results in the twin benefits of assured cost recovery and a sizeable increase to the utility’s rate base.

The opportunity to maximize regulatory support for AMI is to acknowledge and respond to these expectations. None of us knows how much AMI will increase customer satisfaction through optional services (pre-pay, selectable bill date), enhance reliability through demand response, reduce carbon emissions through conservation, or increase consumer convenience through automated controls. We do know that AMI should do some or all of these things, at some level.

In the end, continued regulatory support for