The Case of the Missing (Business) Case

The headlong rush into advanced metering – also known as automatic meter reading (AMR) or, more recently, advanced metering infrastructure (AMI) – is fueled by business cases focused on short-term operational savings. Unfortunately, the industry is not taking advantage of the fact that the largest impacts will be long-term; namely, transmission and distribution efficiencies, asset management improvements, and new business opportunities.

Advanced metering is at the core of the “Grid of the Future,” bringing intelligence and a networked model to electric, gas and water systems. Thus far, however, its impact is rarely accounted for at the level of the T&D system. Rather, projects are focused on billing and customer interface, leaving out much of the potential revenue and savings.

It is understandable that regulatory logic has driven utilities toward an accounting mentality with payoffs measured in reduced labor, better outage reporting, and improved meter and billing accuracy. Yet, as far back as 2003, Ameren reported that 20% of its advanced metering benefits came from load and distribution network optimization. Initially, in 1996, it placed the value of that optimization at zero! In fact, the “traditional” benefits of meter labor savings and move in/move out declined from nearly 75% in 1996 to just over 50% in 2003.

This disconnect was evident in a recent confidential survey of 26 electric and gas utilities performed by Positive Energy Directions. Many project managers said they used “guerrilla tactics” to get the system engineering side to use the data and control offered by the new metering systems. The real data from real loads in real time appears, at least in some cases, to conflict with previous beliefs of how the systems operate. This dichotomy may be further complicated when competing interests seeking capital for their own projects.

It clearly is time for the industry to analyze the benefits of AMR/AMI to the overall system. This analysis will develop the business cases necessary to garner the support of T&D management:

• Grid efficiencies through active load control and management. Estimates range up to 3% efficiency gains across the grid. (Gas, Water, Electric)
• Capacity switching in real time (G, W, E)
• Real-time grid analysis (G, W, E)
• Outage management overlays with GIS and overlaid again with AMI (G, W, E)
• Network loss analysis to pinpoint system issues throughout the network instead of just at the major transmission level (G, W, E)
• Real-time phase balancing at the distribution feeder level (E)
• Transformer sizing , maintenance and replacement based on actual data and not models or tools (E)
• Real-time distribution transformer load management and alarms using real time load information (E)
• Leak detection for water and gas (G, W)

Advanced metering is at the core of the coming intelligent grid revolution. Counting on meter reader labor savings alone falls far short of this technology’s great potential and misses the tremendous opportunity and value that awaits us.

Mark Gabriel was previously a senior officer at the Electric Power Research Institute where he led a nationwide effort known as the Electricity Sector Framework: Achieving a 21st Century Transformation.

   Copies of Mark’s presentations and papers