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Fixed Networks Gaining Ground as Utilities Seek Greater Benefits from Automation
by Rick Fioravanti and Garrett Johnston
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Improving operations
Many vendors have long wondered what it will take for utilities to move to more robust – and expensive – fixed network AMR (Automated Meter Reading) or AMI (Advanced Metering Infrastructure) systems. Those advanced metering advocates can rest assured that the time for fixed networks is coming. But it won’t necessarily represent a complete replacement option for all utilities to lower-cost mobile or hand-held meter reading technology.
In another words, more utilities than ever before are using and considering fixed network wireless and powerline carrier systems (PLC). But at the same time, many utilities are finding that the economies may only dictate the less expensive functionality of mobile systems.
More specifically, about 30% of electric and combination utilities have some form of AMR. Of those, about 13% are using some form of AMR Plus (or advanced metering), according to KEMA’s AMR Installations Database. AMR Plus generally refers to fixed network systems that can provide near two-way communications capabilities, with advanced features such as on-demand reads and electric outage verification. Those same utilities have specific plans in place to automate about 43% of their meters, including about 20% of which will be fixed network technology (e.g., fixed wireless, PLC).
Manitoba Hydro, which is testing Itron’s new two-way, fixed network technology with approximately 6,000 meters, is one of the first utilities to have installed a full AMI platform. The Itron platform is built on open standards.
Combination utilities (providers of more than one commodity) are much further along the road to installing AMR, as more than 35% of their meters have AMR of some sort, including about 15% of which have AMR Plus. However, based on these utility’s current plans, AMR Plus penetration among combination utilities will likely pass the AMR penetration rate in the near future. These percentages are show in the figure below. More than 27% of all meters are planned to have AMR Plus, while only 25% of all meters are expected to have AMR.
While a significant number of meters can provide remote reads, there remains a market opportunity for nearly 210 million meters, across all utility ownership structures, which have not yet been automated. Figure 1 below shows a chart of all meters in the U.S. for electric, gas, and water. The California PUC is following through with its mandate for State IOUs to install automated metering, which will eventually add another 16 million meters to the field of AMR Plus or AMI-equipped devices. However, most utilities do not face this type of regulatory push for AMI and will continue to seek the deployments that meet their own economic or strategic justification.
As the AMR/AMI market matures and takes hold, annual shipments should remain strong. Nearly all utilities have at least some form of AMR, though a significant number are only for small, niche deployments or pilot studies. Annual shipment growth has declined somewhat in the past few years, but should remain steady or even increase over the next five years. Using data from various sources and an understanding of recent utility announcements and plans, KEMA forecasts a compounded annual growth rate in annual shipments of 10 to 12% through 2010.
Many more cooperatives have deployed AMR and AMR+ than investor-owned and municipal operated utilities. IOUs are second on the list, while municipals’ risk-aversion has prevented many of them from moving forward with AMR.
Deployment rates have lagged in electric utilities, though recent announcements will shift this trend dramatically. Some of the more notable, full-scale AMR/AMI announcements (with the expected deployment commencement year) includes:
Pacific Gas & Electric: 9.3M meters (2007) - AMR Plus (DCSI/Hexagram)
Southern California Edison: 5.0M (2009) - AMI (TBD)
Progress Energy: 2.6M (2005) - Mobile AMR (Itron)
San Diego Gas & Electric: 2.1M (2008) = AMI (TBD)
Piedmont Natural Gas: 0.9M (2005) = Mobile AMR (Itron)
Over the past four years, the following additional utilities have deployed or made plans to deploy mobile AMR technology to read nearly 7 million meters.
Duke Energy 2.2M (2002)
Dominion Virginia Power: 750,000 (2004)
With these installations and others being announced, many utilities continue to see mobile AMR as a preferred, more cost-effective alternative, at least in the short-term. With mobile systems, utilities can delay the inherent risk of a large-scale AMI deployment for another 10 to 15 years. A number of these utilities work under the assumption that by the time the systems need to be replaced or upgraded, there will be more certainty regarding regulations, energy prices and/or vendor product offerings. To further prepare for future AMI, these utilities often install solid-state metering with their mobile AMR system, as a replacement to existing electromechanical meters. The one-time increase in revenue as a result of generally greater meter accuracy can offset a sizable portion of the incremental capital requirement.
Overall utility strategies will continue to drive toward AMR or AMR Plus deployments. Utilities with cost-saving strategies will likely continue to select basic mobile AMR while those looking to improve operational efficiencies will often opt for fixed network AMR Plus systems.
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Download PDF. To view the full version of this article, including any charts and graphs referenced, use the download link below for the PDF of this issue.
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[download] Automation Insight Vol 1 No 1 (.pdf 208 kb)
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