Goodbye AMR, Hello AMM by mThink, May 23, 2005 Not long ago, the decision to pursue an automated meter reading (AMR) project was straightforward to describe and quantify. The business case was essentially one of justifying the cost based on the potential labor savings (the classic feet off the street argument), and the limited technologies available were, for the most part, one-way in nature, with data flowing from the meters back to the utility data center. Over the past few years, there has been a clear transition from the classic AMR approach to advanced meter management (AMM). The transition has been driven by both technological and data management considerations. The biggest single technological change that has enabled this transition is the added functionality made possible by bidirectional communication to the meter endpoints. While receiving reads from the meters is still clearly the biggest change and provides the largest perceived benefit for the utility, significant benefits can be obtained from the new functionalities provided by this technological advance. Additionally, in many cases the tools to perform analyses using information from the meter data warehouse were never implemented or did not meet the vision of what was intended. This has led to a number of companies that had previously implemented AMR to now look at implementing a fully functional meter data management (MDM) system to realize that vision. The combination of benefits of an AMM approach allows these projects to incorporate into the business cases transformational benefits from multiple parts of the business, including customer service, operations, finance and technology. Additionally, geography-specific factors can also play a role in the business cases that drive the need for the implementations. In Central and South America, for example, theft detection and prevention is one of the single biggest aspects driving the move toward AMM. Significant losses are seen every year due to increasing theft, and an AMM solution inclusive of distribution asset management and threshold monitoring for usage provides the utilities with a valuable tool in eliminating, or at a minimum greatly reducing these losses. In parts of Europe, where late payment or nonpayment is a significant problem, some utilities are including in their AMM systems the ability to directly control consumption on a premise-by-premise basis by setting thresholds that cannot be exceeded without tripping a breaker at the premise. This approach will allow utilities to avoid the huge revenue losses incurred in the past. The key in both these examples is that the value is in areas other than the classic feet off the street approach. The functionality available to utilities today is much more robust and resources involved in the up-front business case and requirements efforts need to take off the blinders and think outside the box from how a traditional AMR project would be justified and planned. Once the argument for an AMM implementation has been successfully made, the next set of decisions is how to bring the implementation to fruition. Overall, there are four key components of an AMM implementation: Meter data management; Communications and collection; Installation; and Program management. While major transformational benefits of an AMM implementation can be achieved, each of these four components has inherent risks that must be managed in order to ultimately call the project a success. Meter Data Management MDM functionality comprises the central integration hub for todays AMM environments. Because it will be the single point of management, processing and integration to back-end legacy systems within an AMM environment, the selection and proper implementation of the MDM system is critical. All business rules regarding validation, editing and estimation (VEE) should be done within the MDM to allow for consistency and efficiency in ongoing operations and maintenance. MDM vendors today offer robust business functionality within their products, including: Configurable VEE rules engines; Advanced exception processing capabilities; Integration with asset management systems (meter tracking); Integration with service order and work management systems; Flexible data aggregation capabilities; Tailored functionality for both commercial and industrial as well as mass market customers; Direct management of vendor head-end systems for endpoint communications; Integration with key back-end systems (outage management system, customer information system, energy management system and geographical information system); Security and data partitioning across internal users/groups and external consumers; and Reporting engines. These capabilities position the MDM system as a new mission-critical system within the utility, providing increased efficiencies where much of the functionality provided would have previously been done with point-to-point interfaces and duplicative operational processes. Under the scenario where multiple communications technologies are implemented, building the business logic into the MDM provides the utility with a much more efficient ongoing operation, as common business logic is maintained in one place and not replicated multiple times within the interfaces for each communication system. The selection of the MDM vendor should therefore be viewed seriously, as would the selection of any other key operational system that the utility would make. Its not simply a data warehouse, and making a poor decision will adversely affect the ability to meet anticipated returns on investment in the future. Communications and Collection The implementation of the communication, collection and endpoint technologies aspect of an AMM project should ideally be conducted in parallel with the implementation of the MDM system. For larger utilities embarking on the path of an AMM project today, there needs to be an approach that includes multiple technologies within the environment. We do not believe that a one size fits all approach will provide the coverage and functionality that is needed. Differences in geography, terrain, customer density and requirements for customer functionality are best addressed through implementation of a suite of communication technologies that will differ from one company to the next. For large utilities with multiple services (e.g., electric, gas, water), we envision a combination of power line carrier, fixed network radio frequency and mobile/drive-by solutions to address the differences in territory and requirements. For example, the potential for time-of-use tiered pricing requirements could heavily influence the technology selected. In areas where time of use is envisioned, certain technologies are not feasible, such as drive-by or some of the slower power line carrier options. Another possible influencing factor is the potential transient customer nature of some geographic areas, such as dense university environments. The number of connects and disconnects in these areas during certain periods of the year are a large cost and management issue for the utility. Having a communications and metering solution in these areas that supports remote connect/disconnect functionality is a major advantage over other options available. There are many other specific situations that will ultimately determine the optimal technology mix to best support the complete AMM vision for the utility. Therefore, up-front planning and analysis must occur for the project to ultimately be successful; jumping quickly to a decision on a single technology without having conducted a sound requirements and analysis phase will lead to many issues down the road that could have been easily avoided. Installation and Program Management The installation period for the project itself will be multiple years in duration by the time the last meter is installed or retrofitted. The complexity of the planning and managing of the rollout is one of the biggest risks to project success. With larger utilities, the rollout will most likely involve thousands of installs a day. Managing the overall supply chain (including the meter manufacturers, communications technology manufacturers, cross-dock processing and installer scheduling) can quickly overwhelm even the most efficient utility. Many of the large systems integrators are bringing their experience from other industries to address the complexity of rolling out a large number of endpoint devices. The good news is that the lessons learned and best practices from other industries (such as those learned from rolling out point-of-sale devices, kiosks, ATMs, etc.) can be directly leveraged to mitigate risk and manage success for an AMM rollout. Combined with the specific device installation services of key players in the utility engineering services area, a systems integrator will be able to take responsibility for the rollout along with the other key integration and program management components of such a complex project. A major factor contributing to the complexity and risks of an AMM project is that, unlike IT implementations in which the effects are confined to the back office, AMM directly touches the end customers. Utilities must not only keep their customers informed about potential upcoming pricing changes (e.g., for time of use or critical peak pricing), but they must also be prepared for the increased number of billing-related calls that will come in during the implementation. As meters are replaced in the field and billing is performed, many customers could see significant changes to their bills due to slow meters that may have been in place for years and are now reporting correctly, estimations that were low in the past and are now eliminated with actual reads and other potential customer confusion. A great deal of planning must be done up front to help ensure that all of these scenarios are anticipated to avoid the potential for increased complaints or other issues. Conclusion The change in the marketplace over the past few years from AMR to AMM has been exciting. This transformation is not yet complete, and over the next five years the industry will continue to experience significant advances and changes. What was once an easy decision to make for a traditional AMR system, now requires in-depth analysis and research in order to design the best overall AMM solution. However, utilities should not be afraid to move down this path, because experienced integrators can work jointly with utilities to design and implement a holistic solution that is designed to meet the vision of the utility, sharing both the risks and rewards throughout the project life cycle. Perhaps some people will wish for the good old days of simple AMR implementations after hearing about the complexities. However, the real message is that, while complex and risky, the potential benefits of todays AMM projects can be realized through an execution plan that is well thought out and proven. After years of flat technology advances in the AMR space, there is finally a true dramatic increase in capabilities available to utilities. Finally, its time for all those shelved AMR plans to be dusted off, updated to reflect current AMM approaches and executed. Filed under: White Papers Tagged under: Utilities