Technical brief

 Advanced Metering

Advanced metering is the integration of electronic communication into metering technology to facilitate one-way or two-way communication between utility and customer equipment.

What are the benefits?

When implemented, advanced metering opens the door to a variety of options:

Automated Meter Reading (AMR)

AMR is perhaps the most obvious benefit of an advanced metering system. This eliminates the requirement for site visits by meter readers. The meters can be read automatically without error at the same date and time each billing period. Eventually new residential customers can be spared the eyesore of a meter on the front of the house. A variation on this is electronic prepayment for service by the customer.

AMR is certainly appealing, but first costs are at least two times the $25 cost of a conventional meter. In many communities conventional meter reading costs only $6 to $10 per year, so several years may be required for payback of AMR. AMR may not be cost effective unless combined with other advantages of advanced metering described below.

Competitive incentives of deregulation and regulatory changes of the Telecommunications Reform Act of 1996 create the motivations and means for utilities to obtain rights to or ownership of communications infrastructure. A broad band communication structure is capable of carrying additional communication services, i.e. more than load management and metering information. Energy utilities can use it to deliver revenue-producing services such as cable TV, Internet access, and security monitoring. In the commercial and industrial sectors, the utility can provide submetering and analysis. One such utility providing additional customer services is Tacoma Power in Washington State.

Perhaps the greatest potential of advanced metering is the ability to implement innovative rate structures. Deregulation and competition create an incentive for careful pricing, more closely related to time-varying cost of service. Advanced metering accommodates this by allowing time-of-use rates and retrieval of demand, power factor, and energy data at hourly or even smaller intervals.

Utilities have long sought to motivate customers to consume predictably and steadily. A year round flat load curve can be served with the least expenditure for generation, transmission, and distribution resources. Unfortunately conventional metering is limited in time resolution and by insensitivity to weather and other contingencies. With conventional metering, the best known attempts to deal with some of these challenges are seasonal rates to deal with weather, and demand charges to mitigate short-term stress on capacity. Both of these are intended to provide price incentives to control load and shape it to accommodate the utility's resources.

With conventional metering, the great limitation on seasonal rates is their inability to respond to caprices of varying weather. The greatest limitation with demand charges are their insensitivity to diversity, i.e. the extent to which a customer's high demand intervals coincide with high aggregate demand of others customers. A customer may be moved to draconian curtailment to avoid peaking a ratcheting demand at a time when system aggregate demand is moderate or low. Conversely, with conventional metering the customer has no incentive for further reduction below a level at which the demand meter has already registered during the billing period.

With advanced metering, the utility is given great control over load management in real time. Dispatchers can monitor weather forecasts, volatile power market situations, and their own current aggregate loads. Using that information they dispatch load similar to the way they dispatch generation. This involves advanced metering technology and creative contracts with customers. With an appropriate rate structure incentive, customers will agree to shed some of their load at irregular times as the utility's needs arise. The customer enjoys a moderate rate most of the time, but faces steep charges when the utility activates peak pricing. Depending upon the contract and installed equipment, the utility may either directly shed customer loads or indirectly shed them, i.e. send a signal indicating that peak pricing conditions are in force. With the latter, the customer has the option to shed load or pay a pre-agreed steep tariff for load over the contract amount. A useful aspect of direct load management is the ability to disconnect and connect as necessary such as when tenants change.

Designing a system to exploit the load management capabilities of advanced metering is not trivial. There is great potential for beneficial load shaping and maintaining reserve margin, but miscalculations of discretionary loads and human social behavior are commonplace. One large Florida utility implemented an optional interruptible rate for its residential customers. In exchange for a lower rate, participating customers ceded the right to the utility to interrupt service to their large loads, e.g. pool pumps, water heaters, air conditioners, etc. During a major heat wave, several interruptions were necessary and customers fled the program in droves. So many dropped out that a new gas turbine power plant had to be expedited.

A small northeastern Oregon municipal utility implemented a program to curtail power to commercial and residential heating systems and water heaters during high demand episodes. The system was a success but power reduction was significantly less than had been predicted by a major national consulting firm. Base-case water heater demand had been overestimated. The heating system loads were cycled in 30 minute periods because of concerns that houses would otherwise cool too much. After the first 30 minutes off, thermostats were all demanding heat and began "taking back" the power initially withheld. The eagerness of many heat pump controls to switch to resistance backup for pull-up caused an even worse take back in many heat pump homes.

In another case a small central Florida electric cooperative's load management program actually succeeded itself out of business. Faced with high demand charges from their power wholesaler, the utility implemented an advanced metering system with a customer incentive for load curtailment. It worked so well that the power wholesaler revised the rate structure, shifting charges from demand toward energy.

An additional benefit of advanced metering is problem notification. The real-time communications allow real-time outage notification and detection of illegal energy diversion.

What technology is needed?

The technical key to advanced metering is for the utility to have access to, or control over, a fast two-way communication system with customers' sites. Several systems have been used in experimental and commercial applications. The most common are:

Radio

This involves a radio receiver at each customer's site. The receiver can receive messages dispatched by the utility that shed non-critical loads, switch meters between peak and off-peak rates, and/or operate annunciators for the customer. Some systems have used two-way radios, but the large number of transmitters which must be maintained and monitored complicates this.

Power Line Carrier

This is similar to radio in that receivers are required and two-way communications are possible, though more complicated. Bandwidth, i.e. speed and detail of information capability, is limited by the system, which is optimized for 60 Hz service. Power line carrier was most appealing before the Telecommunications Reform Act of 1996 which gave utilities rights to other communication modes than their own power distribution infrastructure.

Data Cable

A data cable system can be used for two-way transfer of information. This is typically a hybrid fiber-optic and co-axial cable system that does multiple duty for cable TV and sometimes computer access to Internet service providers.

Phone Line

New technologies are allowing phone lines to be used for high-speed data transfer. With this technology, two-way data can be transferred at over 256 bps. The data connection can be kept open continuously without interfering with conventional telephone voice communication. Cellular phone systems such as CellNet are also used for wireless radio two-way systems.

EPRI has supported development of a new "open platform" all electronic residential meter to accommodate the various aspects of advanced metering. EPRI forecasts that the new SE-240 meter will become a standard.

Where Can I Get More Information?

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Acknowledgment: The Washington State University Cooperative Extension Energy Program produced this technical brief.