Setting realistic expectations is part of creating a viable Advanced Metering Infrastructure (AMI) business case. Set them too high and you are doomed to disappoint. Set them too low and risk rejection.
Here are three expectations to address before they undermine your electric AMI business case:
You expect a smart meter to last for 20 years.
Traditionally, the capital depreciation schedule for analog electric meters was 20 years. In reality, utilities would install these meters and not replace until it failed. However, this shouldn’t be the case for today’s smart meters. Not because they won’t last that long, but the pace of meter technology is changing so quickly that utilities would miss out on powerful new capabilities that can really impact the business.
Take, for instance, the original iPhone released in 2007. This groundbreaking technology revolutionized an industry. However, it also was missing a lot of functionalities that we’ve come to expect from smart phones. No GPS. 4GB or 8GB storage. A modest 2-megapixel camera. When compared to today’s smart phones the original iPhone is laughably obsolete. And, the same can be said of first generation meters. These meters still read energy usage, but are often limited in regards to other features.
Utilities need to have a reasonable meter capital depreciation lifecycle. But, they also know that new, more technologically advanced smart meters will make the grid more resilient, enable more efficient operations and provide more value to customers. It’s a balancing act. The trend today is for electric smart meters to have a depreciable life of 10-15 years.
You expect customers to be actively engaged with their energy use.
Simply giving customers access to energy usage data isn’t enough. Thanks to transformations across all industries, from fast-food delivery to ER check-in, customers expect real-time, proactive communications. Engagement needs to be easy and convenient. AMI has given utilities the foundation needed to meet these expectations, but all too often it falls short. A large component of its business case is built upon customer benefits—more reliability, real-time energy data feedback, lower energy costs and more.
Utilities need to actively help customers engage with their energy use. Simply having a customer web portal isn’t enough. Proactive outage messaging, high-bill alerts, pre-pay options, easier access to demand response programs and enabling time-of-use pricing are a few ways to help build engagement. Harnessing the power of data will help personalize offerings and create a better customer experience.
You expect AMI to be a one-time expense.
Building a two-way communication network infrastructure, deploying smart meters and launching a new web portal is just the beginning. To fully realize the benefits, a culture of continuous improvement is needed. Processes need to change and groups that are normally siloed need to work together. AMI affects all parts of the business.
It’s best to think of AMI as a phased approach that builds upon itself, creating additional efficiencies with each step forward. Perhaps the first step is to integrate billing. Next, might be launching a demand response program or adding distribution automation to the network. By continuing to add advanced applications it evolves into a Smart Utility Network. Baby steps.