By the end of 1996, the 400,000 urban customers of Kansas City Power & Light Co. (KCPL) will enter a new age of technology.
A real-time wireless network will bounce readings from small transmitters installed in the existing meters of every home and business in the greater Kansas City metropolitan area back to computers at the utility's customer services office.
Say goodbye to traditional meter readers, and hello to technology that will bring distribution systems out of the Dark Ages in terms of customer service.
"It's the price of admission for being in the power delivery business," says Charles R. Cole, KCPL's vice president of customer services. "If you don't have an automated data system, you're not going to be in the game."
KCPL's executives believe the new radio and cellular network will greatly improve the company's ability to control its power distribution, manage its load requirements, monitor outages, and in the not-too-distant future, enable the utility to provide time-of-use (TOU) and offpeak pricing.
KCPL signed a 20-year contract with CellNet Data Systems Inc. of San Carlos, CA, to install and operate the new technology. While there have been limited demonstration projects elsewhere, the KCPL contract represents the first systemwide, commercial application of wireless automated meter reading (AMR) by a U.S. utility.
Cole is enthusiastic about the conversion to the wireless AMR system. It's a way to "add value to the kilowatt-hour" and "the key to having a competitive advantage" at the distribution level. To Cole, automated data systems represent more than just a passthrough of efficiency gains or lower operating costs to customers.
A growing number of utilities are jumping on the AMR bandwagon in an effort to cut costs, improve efficiencies, and avoid major capital investments in new plant capacity. Industry analysts estimate that utilities spend about $2 billion a year on meter reading, which can be accomplished much more cheaply and efficiently through automation.
Kenneth M. Margossian, president and chief operating officer of Commonwealth Gas Co. in Southborough, MA, calls wireless technology the "foundation for the future" for distribution systems.
Commonwealth Gas, a subsidiary of Commonwealth Energy System, has installed 110,000 transmitters in gas meters over the past two years, covering about half of its customer base, via a contract with Itron Inc. of Spokane, WA. The meters are read by mobile vans traveling throughout the service territory. Commonwealth Gas currently is conducting a demonstration project for a fixed meter-reading network involving 100 gas and 10 electric meters, with an eye toward a systemwide application in the future. The utility also is exploring the idea of offering the AMR service to its sister company, Commonwealth Electric, which has 300,000 customers, as well as to water utilities in the area.
The potential AMR market is huge, making companies like CellNet, Itron, and their competitors very attractive to Wall Street investors and venture capitalists these days. Other providers of data communications and management services include Metricom, American Innovations, and General Electric.
Robert D. Neilson, Itron's vice president of marketing, estimates the total AMR market in North America at $10 billion. There are approximately 234 million meters in the United States and Canada (110 million electric meters,
54 million gas meters, and 70 million water meters), with an average conversion price of $50 to $75 per meter.
The benefits for utilities are attractive, too. Chris Slaboszewicz, CellNet's vice president of sales and marketing, estimates that TOU residential rates, made possible by AMR, can help utilities avoid $18 billion in future power plant investment. The new AMR technologies will enable utilities to vary electricity prices throughout the day, encouraging customers to reduce their consumption at peak periods. Residential TOU rates could provide 40 percent of the peaking capacity needed by the end of the decade (see, PUBLIC UTILITIES FORTNIGHTLY, Mar. 15, 1994, p. 47).
Cree Edwards, vice president of business development and cofounder of CellNet, says his company is retrofitting the meters for KCPL and will charge a monthly meter-reading fee of about 75 cents. Installing the transmitters into the meters is a relatively simple process; in the first phase of installation, CellNet retrofitted 5,000 meters in 10 days.
CellNet also has signed contracts to deploy limited automation systems for Northern States Power in its Minneapolis/St. Paul system, and for Georgia Power Co. in metropolitan Atlanta, which is gearing up for the 1996 Summer Olympics. It will also expand Pacific Gas & Electric's system.
These systems can monitor power usage and system performance on a real-time basis, detect faults in power lines, and immediately reroute power around troubled areas (em all from the utility's control center. CellNet will provide capacitor bank control, power-quality monitoring, AMR for major customers, line recloser control, and switch control.
CellNet, a privately held company founded in 1984, completed a $31-million equity private placement last year. Investors include some blue-chip venture capital firms, such as AT&T Ventures and Barclays USA Corp.
Another utility opting for a wireless AMR system is Public Service Co. of Colorado, which signed a $23-million contract with Itron to install 333,000 transmitters on gas and electric meters in the Denver area, and to provide supporting hardware and software. These modules will be read remotely by mobile vans, and are compatible with a fixed-network AMR test system that Public Service installed last year.
Public Service vice president Ross King says the Itron AMR system will "dramatically improve our meter-reading efficiency and customer service," and will establish a base for expanding to a fixed-network system. "Aggressiveness in automation is strategic to our goal as a low-cost energy supplier," King adds.
Itron also reached agreement last year with Southern California Edison Co. to conduct a test that will interconnect Itron's Genesis AMR system with Edison's own data communications network, to demonstrate that Itron's transmitters can also be read by third-party networks. Edison serves 4.1 million customers in its Southern California service territory.
Itron was formed in 1977 to develop technology that would enable utilities to provide onsite meter reading for a customer, but unfortunately, the idea never caught on with customers. Undaunted, the company shifted its focus to develop the handheld microcomputers widely used by meter readers today. Some form of Itron's portable and network data collection systems has been installed at more than 1,100 electric, gas, and water utilities worldwide.
Itron has deployed its wireless transmitters, which it calls ERT (encoder, receiver, transmitter) modules, in the meters of over 70 utilities. To date, Itron has shipped more than 3.2 million ERTs and signed contracts for the purchase of more than 6 million.
Itron began public trading of
its stock in November 1993, employs 600 people, and last year had sales in the neighborhood of $100 million.
Several competing technologies are available to utilities seeking to automate their data systems, such as the more expensive fiber optics and coaxial cable that would enable utilities to enter a number of unregulated businesses, from television and video communications to home security businesses.
But fiber optics requires a large initial investment to justify the expense, and there are a number of competitors, such as telephone vendors, in that business already. "Cellular technology is much cheaper," KCPL's Cole observes, and can be integrated eventually into a fiber, cable, telephone, microwave, or other fixed-network system.
For KCPL's meter-reading needs, hopping onto a fiber-optics network right now would be "like trying to drink water out of a fire hose," Cole notes. t
W. Lynn Garner is senior writer of PUBLIC UTILITIES FORTNIGHTLY.
Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.