Customers measure the service received from their utility by its ability to respond to problems. If there is an outage, how long is the electricity out? If there is an error on the customer’s bill, how long does it take to resolve it? Can the customer get a usage profile, and how accurate is it? Does the utility provide a suite of services? Customers say they want a choice for power quality and pricing. However, are they going to turn down thermostats in the middle of the day? Are they willing to wait until midnight to wash dishes? Will they sit and study time-of-day rate charts and change lifestyles? If the industry is going to realize the results hyped by the soothsayers, the industry basically will have to be transparent to the customers after they make their choices.
At a recent conference, Jeff Sterba, president, CEO and chairman of the board for PNM Resources, said, “If you have to ask customers to change their behavior, chances are they will not do it.” To realize energy efficiency of the magnitude needed by the industry, we need a technology without much human interface (regarding both the utility and the customer). Consumers have defined and redefined industry after industry with their proclivity for the newest electronic gadget. Why should the electrical industry be any different? Ours is not a supply-based technology so much as a demand-based technology driven by the consumer. Consumers demand more and more from the system and from the utilities supplying the system. They want choices in energy providers, the type of power and the quality of power, but they don’t want to be bothered about it.
The 2005 Energy Policy Act offers much about how the electric utility industry will improve and operate in the immediate future. The legislation is often quoted and misquoted in the press. It addresses reliability, renewable energy, infrastructure modernization and advanced transmission technologies, to name a few. Tucked away on page 70 of the electricity segment is section 1252, “Smart Metering.” This section says that all utilities, not just invester-owned utilities, will provide customers with time-based rates and the ability to receive and respond to electricity price signals. To do so, utilities need more than an intelligent transmission and distribution grid — they need an intelligent connection to the customer.
That connection begins at the meter. It is the portal to and from the customer, and it is becoming increasingly intelligent. Today’s metering devices are capable of many functions, including voice, video and data transfer. This makes possible a sophisticated time-of-day rate structure, which requires little interface with the customer. Soon, even outage notification will be relayed from the meter to the utility’s outage management software, with no interface from the customer.
Before the advent of automated meter reading (AMR) and advanced metering infrastructure (AMI), the meter-reading process was simple yet labor intensive. A human read each meter on a regular basis. The data was entered one card at a time into the company computer by other humans, creating the opportunity for errors and billing problems.
Early AMR devices promised to reduce manpower to read the analog meter and transfer the data to billing. They also proved to be a powerful tool to capture unbilled revenue. From a handheld reader, AMR devices expanded into a one-way communication system from the meter to the utility. A few years later, a new breed of meter technology was born: the two-way digital meter. Data can now flow to and from the customer, which fits into the plans of the 2005 Energy Policy Act. However, a sophisticated data management system is still needed to handle billions of data points.
Unfortunately, to replace the meters and adopt the intelligent customer portal, utilities are seeing a capital expenditure equal to the cost of a generation plant. There also are various competing technologies. Who or what will decide when and how the new technology will be deployed industrywide?
Bud Vos, Comverge’s vice president of marketing, products & strategy, sees technology deployment as a 10-year cycle. According to Vos, “This is due to caution on the part of the utilities: If they rush into a technology and it is leapfrogged by the next advancement in technology, they get burned.” Still, Vos sees utilities not wanting to be left behind either. Comverge thinks the development of industry standards will solve the problems of integrating both the new and the old and different vendor systems. Customer choice is what it is all about.
The industry is deploying AMR and AMI systems at a fast pace. Italian utility ENEL is the closest utility in the world to having implemented the intelligent utility, according to Mark Dudzinski, general manager of marketing at GE Energy. ENEL has invested heavily in intelligent monitoring and intelligent electronic devices. In 2005, the utility completed the last of more than 30 million smart meter installations.
Southern California Edison recently announced plans to replace 5 million residential and small commercial customer meters with two-way intelligent meters. Horizon Utilities will install 800,000 residential and small commercial PowerWISE smart meters across the province. CenterPoint Energy Houston Electric, LLC intends to replace more than 1.9 million residential and small commercial meters with smart meters over the next five years. In addition, Pacific Gas and Electric will install 9.3 million smart meters for homes and businesses (electric and water) starting in late 2006, with completion scheduled for 2011.
Comverge and Itron recently announced a partnership to provide AMI platforms that integrate Comverge’s demand-response technologies with Itron’s OpenWay AMI, coupled with the ZigBee wireless in-home communications standard. AMI is more than devices and technology — it is data management as well. It improves customer management and reinforces the relationship between the customer and the utility, making them partners rather than adversaries.
Comverge has also partnered with Gulf Power. Using smart thermostats and load control switches technology from Comverge, Gulf Power has deployed the GoodCents program, which allows subscribing customers to purchase electricity below the standard residential rate 87% of the time.
As part of the program, customers receive a two-way meter that uses a telephone line for communications and a programmable thermostat that controls their central cooling and heating system along with the water heater and pool pump. Vos of Comverge describes the two-way meter as a device that tells Gulf Power what the customer used and wants in the immediate future. It tells the customer the daily rates for the electricity and allows the household to make decisions on usage. Gulf Power avoids spikes and can use the data to decide whether to build another power plant until it is needed — a potential benefit of US$132 billion over the next 20 years.
Appliances Get Smarter
The GridWise Alliance, a consortium of companies led by the Pacific Northwest National Laboratory (PNNL) under the direction of the Department of Energy, is using new technologies to further the intelligent customer connection. The consortium consists of American Electric Power, AREVA T&D, Battell, BPA, GE Energy, Nxegen, IBM, PJM Interconnection, Rock Port Capital Partners, SAIC, Schneider Electric and UAI.
In January 2006, PNNL announced a yearlong Pacific Northwest GridWise demonstration AMI project, involving approximately 300 homeowners in Washington and Oregon, U.S. The GridWise project is a combination of intelligent electronic devices (IED) and software to give customers more information on energy use and cost.
Approximately 200 homes will be given real-time pricing information via an Internet connection. In addition, some homeowners will receive appliances with embedded controllers that can turn off functions as needed by the utility during periods of high usage.
Building on the smart appliances, Cellnet has announced a new UtiliNet ZigBee Gateway. The gateway will support two-way communications and control for ZigBee-enabled in-home devices (appliances with ZigBee chips embedded for automatic control).
Cellnet will install the ZigBee chip in its smart meters. Chris Hickman, Cellnet’s executive vice president, regulatory affairs and business solutions, calls it “chip under glass.” This chip will pass information between the utility and the customer. Cellnet, with AMI applications at more than 200 utilities across the United States and Canada, expects this gateway to expand load control, energy management and demand-response programs, not to mention the benefit to the customer of more efficient energy usage.
TXU and CURRENT Communications Group are installing equipment on the TXU distribution network, making it a broadband-enabled electric grid. CURRENT is installing broadband over power line (BPL) equipment on the majority of the TXU service area. More than 2 million Texas customers will ultimately have broadband services, which include voice, television and high-speed Internet access available at any outlet in the house. In addition, CURRENT will provide TXU with real-time electric grid management tools, allowing it to monitor the distribution network, detect and prevent outages, and perform AMR.
The next step forward
AMI combined with high-speed communications and embedded ZigBee standard chips is the latest technology to be introduced in the advancement of the intelligent customer interconnection. AMI has come into wide use during the last year or so. Originally, it referred to a combination of automatic data collection/recording and a fixed network system for storage of the data. Today, it has evolved into an intelligent application to take the mountain of data points and make them usable information.
Hickman of Cellnet says, “AMI isn’t just about saving money to read meters. It is the enabling technology for the intelligent grid of the future and the empowerment of customers and utilities to optimize grid efficiencies at unprecedented levels.” The next generation of AMI is an opportunity for outage management, load forecasting, asset management, distribution automation and system planning to be integrated into an enterprise crossing system.