From improved data capture to overcoming non-technical losses and market deregulation, the utility metering business is changing. Advanced metering technology can give utilities the flexibility and functionality they require, as well as help to drive efficiency and reliability.
Steve Helmbrecht, Itron, USA
Today more than ever before, progressive utilities are looking to metering technology as a way to meet key business objectives. Rather than being limited to just recording energy use, today’s meters and technology solutions are capable of addressing issues ranging from reducing non-technical losses, to improving customer service, to increasing delivery system efficiency and reliability.
As a result of these and other issues, there is more and more interest in advanced metering as an essential business tool. Compared to other business sectors, utilities often operate with relatively little access to timely, analytical, decision-support data regarding how and when customers use their product. And often, the data that is collected is not treated as having enterprise value.
Clearly there is a need to address the utility industry’s many challenges, and there are a number of technology developments that help.
A new view of metering
While meter reading accuracy and customer service improvements are often the principal drivers in the decision to invest in metering technology, new generation systems offer more flexibility than ever before. Utilities are facing new sets of challenges and demands. For example, Spain has experienced a 1-2 per cent annual population growth, while energy load is increasing by 5-6 per cent per year. This dynamic is typical for many countries throughout the world, and utilities are looking for better ways of managing resources.
A good analogy for meter reading systems is another piece of technology that has become an essential piece of retail supply chain management: the scanner.
The modern scanner not only records transactions, but helps manage inventory, prompts product ordering, and even tracks customer information and purchases. The retail industry – much like the utility industry today – needed to find ways to better manage its products, and developed innovative ways of using technology to increase their knowledge about their customers and their business.
For example, many retailers use scanned data to track what is purchased and therefore what needs to be replenished. This data-driven approach lets them customize merchandise for different geographical regions, push inventory management to their vendors and reduce the cost of supply chain management.
Figure 1. Mobile collection systems allow for quicker collection of meter data
The common thread between these retail examples and the utility industry is clear: leveraging technology and the value of data captured at the point of purchase and applying that data throughout the enterprise to achieve improvements in business process, operational efficiency, cost control and customer service. For utilities, the meter is the point of purchase.
Figure 2. Itron’s FC200 handheld collection device
Addressing energy theft
Fraud. Meter tampering. Consumption on ‘locked’ accounts. All of these are examples of non-technical losses, something that costs utilities around the world millions – and perhaps billions – of dollars every year.
Industry experts estimate that in some markets, non-technical losses cut into a utility’s revenues by ten per cent or more each year. At a time when energy supply shortages are increasingly common and utilities are under scrutiny to keep costs low, lost revenue is a major threat to a utility’s profitability, corporate health and its ability to provide reliable power. This is why using new technology tools to identify unauthorized energy use, theft, or meter tampering is quickly becoming an essential business practice.
Automatic meter reading (AMR) is a tremendously powerful tool for utilities to help combat non-technical loss. But by itself, AMR is not a cure-all. It requires building on the data collected by the AMR system so utilities can analyse consumption and identify where power is being lost or stolen.
For many utilities that have converted to AMR, non-technical loss remains a significant problem. Because field technicians no longer inspect every meter frequently, energy theft can be difficult to address unless specific measures are put in place. For example, Mexico’s Comisión Federal de Electricidad (CFE) has more than
21 million meters throughout the country. The utility uses remote meter reading, but also has ongoing challenges with power theft. But by using a system that allows off-cycle reading combined with a software suite to analyse the collected data, CFE can now pinpoint where energy is being lost. This is a great tool for the utility’s ‘reduction of non-technical loss’ department, regardless of whether power is being stolen by ‘jumping’ meters, or a consumer is otherwise tampering with a meter.
From a hardware perspective, one-piece casings mean that accessing the meter is tricky, especially without damaging the case, which is obvious to field technicians. New socket-based meters are also more tamper-resistant.
Today’s systems also help counter other types of meter tampering. AMR in particular helps avoid practices like magnetic tampering that can stop the meter from operating correctly, thereby incorrectly lowering a customer’s energy bill. Polarity reversal of a current transformer in a three phase system, for example, results in only 30 per cent of energy consumed being recorded on the customer’s meter. An AMR system can compare the difference between what is read on the AMR device and what is listed on the manual index.
Software programs are also an important part of the solution. They help utilities by providing knowledge about customers’ energy use. The more knowledge and data a utility has, the easier it becomes to identify non-technical losses. Software helps utilities look at energy balance. In other words, applications like distribution asset optimization software helps utilities compare energy used versus the energy billed. Deeper analysis will also help pinpoint where power is being lost.
An important benefit of meter data management software is that it becomes possible to identify when and where there is energy consumption on non-paying accounts. This is a problem especially prevalent in transitory neighbourhoods where the person responsible for payment often changes.
A combination of market changes and technology improvements have resulted in utilities seeing value in increasing the frequency of meter reads. From deregulation in Europe leading to customers switching utilities, to privatization in Asia leading to demand for greater efficiencies, to South American utilities striving to address energy theft, increased meter reading frequency can help address a variety of issues.
In some countries, yearly meter reads have been typical. For example, in the Netherlands many residential meters are read every two to three years. But in many deregulating markets the frequency of meter reading is changing to keep pace with customer migration. As customers are given the choice of switching, it is necessary to read meters more frequently to establish a baseline of power consumption and provide better customer service.
However, increasing the number of meter reads often means a careful consideration of infrastructure – from both a hardware and software perspective.
To address the need for increased meter reads, technologies have been refined to help utilities. For example, mobile collection systems – typically mounted in a vehicle – mean that meters can be read much faster, and with fewer technicians in the field. This also helps address challenges in areas where meters are difficult to access due to home security, aggressive pets or even difficult to find addresses.
The data generated from increased meter reads is highly useful for utilities. More frequent reads means that utilities can bill more frequently, with more accuracy – something especially important to consumers during times of fluctuating energy prices. More frequent meter reading and billing also improves cash flow.
Accurate data can also help utilities understand where demand is coming from, and can help forecast exactly how much power should be purchased to meet demand. This is important in all energy markets, but especially those that are deregulating. In many deregulating markets power generation is no longer linked with transmission, distribution and retailing. So a complete understanding of exactly how much power is required is essential to the financial health of the utility.
Many utilities face increasing energy costs and demand, capital constraints, and the diminished ability to ‘build their way out’ of these challenges. Therefore the application of knowledge-based systems to reduce costs, increase efficiencies, leverage existing assets, and proactively manage load will be increasingly critical. Similarly, modern metering systems do much more than record energy use. Solid-state as well as automatic meter reading has blossomed over the past years, and today companies are looking beyond the primary focus of collecting usage data.
A Caribbean case study
In the Caribbean, Bahamas Electric Corporation (BEC) recently worked with Itron to perform a complete system audit as part of a recent AMR upgrade. BEC has a desire to create what its chairman Al Jarrett calls a “high performance management system” to serve customers and protect revenue from system losses.
Following this audit, BEC made a number of key conclusions. For example, in some cases the wrong type of meter was used. This is a common problem for utilities that purchased multiple types of meters over a period of years. As a result, BEC made the decision to invest in
100 000 new AMR devices, including replacing every meter and purchasing a mobile AMR collection system from Itron.
BEC estimates that as a result of the new AMR system the utility will save more than $15 million annually and improve billing efficiencies by 50 per cent. These savings will be passed on to customers. In fact, BEC recently lowered its rates for the first time since 1965.
BEC’s annual loss is estimated at more than 15 per cent, with non-technical loss accounting for roughly ten per cent. Once BEC has compiled a database of meter data it can begin looking for non-technical losses. “We see the reduction of non-technical loss and corresponding lower rates as an economic development tool for the Bahamas,” said Jarrett .
The Bahamas are determined to be a major player in the competitive Caribbean tourism industry, and BEC is well aware that the delivery of reliable, cost-effective power is an important priority.