Goodbye AMR, Hello AMM

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 today’s 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. It’s 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 today’s 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, it’s time for all
those shelved AMR plans to be dusted off, updated to reflect current AMM approaches
and executed.