AMI/MDM initiatives and Role of IT in achieving benefits of AMI System

Abhijit Arvind Bhure

Abstract Automated Metering Infrastructure (AMI) is a subject widely talked about at various energy departments of state government, regulatory commissions, utility companies, energy forums and among the product vendor community. The debate whether AMI should/shouldnt be implemented is going on since quite a few years and recently got the much required boost by way of the commencement of Energy Policy Act 2005 in USA and department of infrastructure in Victoria State in Australia. Utilities across the world are trying out pilots at various locations to see the feasibility of roll out and meter vendors are trying to push their product range through the utilitys throat. This is taking place due to the lack of clear direction and lack of consensus among the stakeholders from the regulatory perspective. Government departments have come out with Act/laws in various countries to promote the AMI implementation. But the clear mandate is missing in these directions from the authorities. This article brings out the Govt. /regulatory perspective towards AMI, challenges in the implementation processes, collection of best practices for approach to implementation.

Apr 2008

1. Introduction
Electricity utility industry is going through a transformation throughout the world. The typical segments of the industry are generation, transmission, distribution and supply. The last mile or the end point of this chain is the distribution & supply business. Its this business from where all the revenue from sale of electricity gets collected in the utility chain. The distribution and supply business ensures that the energy received from the sellers (generator, trader or any other agency) gets accounted in an efficient manner. In the distribution and retail supply business, operational efficiency is the key cause of concern. The operational efficiency is dependant on the day to day activities of the supply business such as consumer meter reading, billing and revenue collection. Today, electricity distribution and supply business is facing challenges in the meter reading, billing and cash collection for the energy sold to the end consumers. This article highlights issues related to metering and how different utilities across the world are trying their best to solve the problems related to metering, present status and key enablers for implementation of metering solution at the utility

2. Key challenges in distribution utilities

A typical illustration of a billing chain in the distribution and retail supply utility is depicted below:

The key challenges in the distribution and retail supply business lie in the areas which are lower down the revenue chain i.e. metering, billing and collection of revenue. These are the areas where utilities across the world are finding difficult to prevent leakage of revenue. Most of the Asian utilities are facing problems in the area of power theft and lower billing and collection efficiencies. Most of the European and American utilities are facing the problem regarding wrong billing, accessible metering and manpower cost associated with the process

3. Automated Meter Reading and Meter Data Management Initiatives

Automated meter reading is a process of reading an electronic meter remotely that result in minimization of cost and improvement in operational efficiency of the organization. An electronic meter is fitted with a modem and associated equipments. The meter data is collected via various means such as RF devices, GSM network and telephone lines (dial up network). This system eliminates the use of conventional practice of a meter reader visiting individual establishments to read the meter manually.

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In meter data management (MDM) system the meter readings collected vial RF devices or telephone lines or GSM network are transferred to the Central database which can then be used for computation of bills, performance monitoring, setting up tariff plans, calculation of savings, power theft analysis, time of use (ToU) tariff analysis and customer information systems. The data placed at the central location can be shared across multiple applications. Utilities all over the world are finding it challenging to save costs and optimize efforts on the metering-billing - collection cycle. Some utilities have taken steps in this direction and started exploring options in the area of AMI/MDM. Following sections describe the efforts taken in implementation of AMI/MDM by utilities across the world:

3.1. North America

The Electricity Policy Act 2005 has been the key factor in the development of metering infrastructure in North America. Section 1252 (e) (3) of The Electricity Policy Act 2005 (EPAct 2005) mandates that each electric utility shall offer each of its customer classes, and provide individual customers upon customer request, a time-based rate schedule under which the rate charged by the electric utility varies during different time periods and reflects the variance, if any, in the utilitys costs of generating and purchasing electricity at the wholesale level. The time-based rate schedule shall enable the electric consumer to manage energy use and cost through advanced metering and communications technology. The timeline for this provision is 18 months from the date of enactment of EPAct 2005. Energy utilities in North America have started gearing up to meet his deadline. Federal Energy Regulatory Commission (FERC) conducted a survey on the penetration of Advanced metering in North America. The following figure shows the penetration of Advanced metering in major regions of North America.

Source: FERC Survey, 2005 Source: FERC Survey, 2005

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Following figure shows the penetration of advanced metering in major states in North America.

Source: FERC Survey, 2005

The above figures show that some states have taken initiatives in implementation of advanced metering infrastructure but at the overall level there is a lot to be achieved in terms of the implementation of advanced metering. According to the FERC survey, the penetration level is 6 % at overall level. The following figure shows the Advanced metering penetration in North America.

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Apart from the standard use of advanced metering infrastructure for metering and billing purpose, it is also used for many other important functionalities such as enhance customer service, tamper detection, power quality monitoring, outage management, load forecasting etc. The following figure shows the reported use of advanced metering infrastructure system by various entities:

Source: FERC Survey, 2005

Large scale installations of advanced metering started in North America by 1994 and by 2006 there are about 30 million advanced metering installations in place. The top 5 utilities with most number of advanced metering installations are PG & E (electric), PG and E (gas), Exelon (PA) Electric & Gas, TXU Electric, Xcel Energy (MN) Electric & Gas. These top five constitute 49 % of the total AMI installations in North America.

3.2. Europe
In Europe, there are about 14 million advanced metering systems installed across various countries. Lack of policy by the policymakers and strict price control on metering costs have been the key factors for the advanced metering systems being adopted at a slower pace in European countries. Scandinavian countries have taken initiatives in the advanced metering installation. Some examples are as given below:

3.2.1. Finland
Utilities such as E.On have started using advanced metering system after successful pilot programs. E.On is one of the largest suppliers of gas and electricity in Finland. E.On has been installing close to 60,000 advanced metering installations for gas and power consumers. The completion of this installation is expected to take place by the end of the year 2007. GSM/GPRS is used as a communication medium for data transfer. Energy supply company, Vatlenfall, has about 360,000 customers. Vatlenfall has installed advanced metering system for 30,000 domestic customers. This installation was completed in the year 2005. GSM was used as medium of data communication.

3.2.2. Denmark
The electricity supply company Odense Energi has 72000 electricity consumers and it has installed 63,000 AM I. PLC is used as a communication medium for data transfer. Sydvest Energi is third largest energy utility in Denmark and first to install advanced metering system. It has about 156000 end consumers. It has covered all the 156000 consumers under the advanced metering installation. The installation started in 2004 and is about to complete in 2007.The Communication medium is PLC, LAN and GPRS.

3.2.3. Sweden
Pite energy is installing advanced metering system for all its 20000 customers. It has started the installation in the year 2004 and about to finish by the year 2007. The medium of communication is optic fiber network. Elverket Vallentuna has installed advanced metering system for all its 12000 customers. Infosys - View Point | 5

The installation started in 2002 and completed in 2004. GSM/GPRS system is used as data communication medium.

3.2.4. Norway
Eidefoss AS in Norway is owned by municipal authorities and has close to 12000 end consumers. Eidefoss has implemented advanced metering system for all 12000 customers. The project started in 2001 and completed in 2005. The medium of communication is PLC. Malvik Everk in Norway is another utility which as installed advanced metering system. It has installed advanced meters on all its 5000 customers. The installation began in 2000 and completed in 2003. The medium of communication is PLC.

3.2.5. Italy
Italian Electricity supplier, Enel, has rolled out AMR installation on a larger scale. It has been installing 30 million meters. This push has come with the government backing up the utility with 1.4 billion dollars reimbursement to cover up the stranded costs. This covers the loss for Enel if it installs an automated meter in a customers home and customer switches supplier before Enel has gained a return on its investment.

3.2.6. United Kingdom

The energy and gas regulator (of gem) has taken initiative to promote smart metering option in the region. In a recent landmark decision by of gem, it has decided to lift the price controls on electricity distributors for new and replacement meters and metering price controls from 31st March 2007. This has been a major move by the regulator in promoting the competition in the energy market.

3.3. Australia
The Victorian Government has initiated a program to deliver Advanced Metering Infrastructure (AMI, or smart meters) to all Victorian electricity consumers, commencing in 2008. Under the AMI project, about 2.4 million new electricity meters will be deployed over a 4 year period. Smart meters will help Victorian consumers better manage their energy use by providing more detailed information about their consumption and the opportunities available to save money and reduce greenhouse gas emissions. Integral energy company in New South Wales has made move by installing 3000 meters for its retail customers thereby offering them the ability to economize their energy consumption and offer better customer services.

3.4. New Zealand

The ministry of economic development, Govt. of New Zealand has recognized the need for use of smart metering technology to facilitate load control which would aid in bringing down the electricity demand. The govt. has come out with a policy document on the electricity strategy named Draft New Zealand energy strategy to 2050. The Draft New Zealand energy strategy states that electricity demand is projected to increase by 40 % by the year 2030 if the present generation and consumption pattern remains the same. It has recognized the need to control the demand side events such as effective load control, price responsiveness of consumers. The policy indicates change in the regulations to facilitate the use of smart meters capable of facilitating the time of use tariffs. The regulators are gearing up for providing the required push so as to achieve the policy objectives.

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4. Role of IT in achieving the benefits of AMI system

Information technology (IT) plays key role in achieving the business goals of the utility and provide benefits to the end customer. The data provided by meter needed to be collated, analyzed for business benefits and presented in the required format to the utility to achieve the objectives of the utility. The meter data transferred by the communication medium (Radio frequency based devices, PLC etc.) is collected by central computing system. This raw data is extracted, cleaned, validated, structured and sent to the central computing unit. This central computing unit acts as a standardized data repository. This data is shared across multiple applications and units across the organization. The data is used for billing applications, load pattern analysis, System operation purpose, Customer application systems, load forecasting, Load optimization (Peak period load management), outage management and reporting etc. The following schematic represents the role of IT system:

Utilities across the world are investing in the IT systems in the area of customer service, metering and billing, CIS, and other areas of revenue generation. System integration becomes an issue and involves cost which could be prohibitive in many cases. Therefore there is a need to implement integrated system such as Meter Data Management systems (MOM) that provide integration with other area of the revenue chain. There is a need to recognize MOM system as an integrated application that helps utility not only in the area of metering-billing-collection but also a tool for load management, load forecasting, peak load management, consumer profiling, outage management, time based pricing etc.

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Conclusion
The benefits of the AMI/MDM system are apparent but the need is to provide the trust to the utilities to go ahead with the systematic stepwise implementation plan. While some states have taken steps in this direction, its the regulators job to provide that much needed push to the utilities. The regulators need to come out with time bound guidelines for implementation and provide necessary incentives for the utilities for implementation of AMR/MDM systems. The need is to perceive advanced metering system not just for meter reading & billing tool but to recognize it as a driver for enterprise wide integration tool which will communicate with/replace other redundant IT applications in the utility. There are issues related to costs and communication with other system, demand responsiveness and security, but utilities are looking at it as a strategic tool to improve customer service and thereby retain /attract customers in the competitive energy market.