Is it now worth the investment to install smart meters, complete with two-way communication?
The meter has always been the "cash register" in the basic operations of the utility business. Now it is also becoming a vital communications link, carrying information between a utility and its customers. The meter can supply information critical to customer retention and value-added marketing, as well as more effective system operations.
In choosing from among the wide range of metering options available today, a utility should find a technology that fits its business model. If the company is not interested in offering energy management services and does not foresee any competition for customers in its service territory, then it may choose to settle for a more basic solution or perhaps just continue with manual meter reading.
On the other hand, if the utility plans to be competitive, seeks additional revenue streams and wants to find ways to reduce customer costs while maintaining margin (thus protecting its customer base), then it will need a more advanced meter that enables these new services.
Metering options vary widely in cost, function and return on investment. This disparity reinforces the conclusion that a utility should choose a metering system in line with its overall business plan.
A traditional meter costs around $25 in volume, plus $6 to $10 annually for a human meter reader. If a utility contemplates an investment in automated meter reading, or AMR, the utility must first ask itself if the increased functions alone justify the potential cost savings. Carried further, what return on investment is needed to invest in a full-blown, two-way communications gateway?