The procurement and supply-chain functions of today’s utility are the Rodney Dangerfield of the utility cost-cutting paradigm: They don’t get any respect. Supply chains in most industries extend...
Smart meters open the door to advance billing.
Julie Hance, vice president of software solutions with smart meter supplier Itron. “In the United States, we see less technology on the meters and more in the back office. An AMI program will always have an MDM, and sitting beside it will be the prepay application. Utilities already have their payment processes in place.”
Under the proposed APS program, payment and connect-disconnect processes will take place in the utility’s back office. APS customers will buy credits in $1 increments by phone, mail, online, or in person at a remote location, perhaps at a grocery store kiosk, or an APS satellite office. However, instead of using a plastic card like SRP’s system does, the APS customer’s purchase will be transmitted electronically to the company’s CIS, where it will be transformed into a kilowatt-hour balance.
The balance will be debited as electricity is consumed, with the balance delivered to an in-home display via the MDM. The customer also will be able to track energy usage through a special web portal, and when the balance gets low, APS will notify the customer via the channel the customer chooses— i.e., with a phone call, a text message or email.
“Prepay is an important part of the home energy information pilot,” Tewelis says. “We think there’s a natural built-in energy conservation benefit. The program will help consumers manage their energy costs and we’ll be able to measure how and to what degree they do that.”
DTE Energy is taking a similar approach, though the size of its prepaid program will be relatively modest when compared to APS. Called “SmartCurrents,” the program is the centerpiece of a $168 million smart-grid project, half being funded by the Department of Energy (DOE). The program is comprised of three components: AMI and smart metering; smart homes; and smart circuits, which will address 11 substation and 55 distribution system circuit upgrades.
Under the smart-homes component, a home area network (HAN) will support new service options, including prepaid metering, via a wireless pathway that connects the smart meters to the home to facilitate load control, demand response, customer communication and data presentment.
“We’ll have 600,000 Itron smart meters installed over the next two years,” explains Derek Kirchner, principal marketing analyst with DTE Energy. “We’ve already piloted the AMI program, so we have 30,000 in use today. We’ll have approximately 170,000 installed by the end of 2010 and the full 600,000 by the end of 2011.”
The DTE Energy prepay plan, Kirchner says, will be similar to the APS proposal, but much smaller in numbers. The pilot will include only 200 volunteer participants. Half will be residential, with the other half divided among commercial and small industrial customers.
The program will be based on DTE Energy’s standard rate tariff, or a dynamic peak-pricing option to test load shifting potential. The utility expects to begin recruiting prepay volunteers at the end of this year in order to have the program up and running by next year.
Like APS, the prepaid transactions will be managed by the DTE Energy back office software systems, with the