The Value of Automated Meter Reading

AMR systems offer one way communication and have been around since 1978. Initially such systems basically read the meter, which improved billing accuracy. AMR systems have continued to evolve over time and are now referred to as Advanced Metering Infrastructure (AMI). AMI offers two way communication between the cooperative headquarters and meters, as well as monitoring and control devices on the distribution system. The communication available with an AMI system allows the Cooperative the ability to monitor the entire system with near real time data, which enables close oversight of system operations. Improved operating efficiencies and billing efficiencies are other benefits of an AMR/AMI system, which translate into a cost savings to the member. An AMR /AMI system will read the meter, but there is so much more to consider.

Benefits of AMR/AMI include the following:

OUTAGE DETECTION AND RESTORATION: An AMR/AMI system will make it possible for the Cooperative to know right away when an outage occurs and how many members are affected as well as the area affected. Such information will be helpful in determining exactly where the problem is and what needs to be done, which will result in quicker restoration times. It is likely, for example, if an outage takes place at a member’s home during the day, when they are gone, the Cooperative will find out about it and be able to restore the power before the member even returns. Furthermore, the power can be restored during normal working hours, which will avoid the expense associated with overtime.

VOLTAGE MONITORING: If there is a fluctuation in voltage, the Cooperative will be notified by the AMR/AMI system. For a number of different reasons, a member can experience a change in voltage. It could be related to trees, a storm or an equipment malfunction. Thankfully this does not happen frequently. However, when it does, it can lead to an outage and/or some type of damage or equipment failure, which can be costly. Furthermore, an AMR/AMI system will make it possible for the Cooperative to closely monitor the entire distribution system for voltage as well as the kilowatt demand being placed on the system. This will help prevent some outages and damage, while allowing the Cooperative to greatly improve upon its ability to watch over the entire distribution system.

ENERGY MANAGEMENT: In the past, MJM controlled a number of water heaters and some air conditioning load in the summer during periods of peak demand. More recently, this practice has been limited. Nonetheless, it is anticipated that within 3 to 5 years, MJM will be offering more load control/energy management programs than ever before. Controlling load and using new technology to manage energy usage more efficiently will help to put off the need to add more electric generation, which has gone up significantly in price compared to the base load generation built 30+ years ago. An AMR/AMI system will allow the Cooperative to offer a much more comprehensive energy management program that will make it possible for members of the Cooperative to voluntarily participate in a program whereby specific appliances and equipment can be controlled. For example, it is entirely possible that the defrost option on a refrigerator would not be allowed to come on at the same time the water heater is calling for the elements to operate. Once the water heater has finished heating water, then the defrost option could operate. Heating and cooling equipment could also be controlled in an effort to limit peak usage at times when electricity is more expensive. Members that participate in an energy management program will benefit directly through some form of direct economic incentive while all members will benefit indirectly as the demand for more power will be reduced.

TIME OF USE (TOU) PRICING: Within the next 5 years, it is anticipated that a voluntary “Time of Use” rate will be available to members of the Cooperative. Under a TOU rate, members will have an opportunity to shift some of th eir electric consumption to times of the day when electricity is less expensive. For example, it may be less expensive to operate a washing machine, clothes dryer or a dishwasher after 7:00 p.m. instead of earlier in the day. For members that are able to make such an adjustment, they can save money on their electric bill.

PRE-PAID ELECTRIC SERVICE: The two way communication available with an AMR/AMI system will allow the Cooperative to offer a Pre-paid electric service whereby a member can purchase, in advance, a certain number of kilowatt hours. When the member is close to using up the number of kilowatt hours purchased, the Cooperative can notify them in advance that they need to recharge the meter. A pre-paid service would further reduce the need to require a deposit, which may be very attractive to members for different reasons. Additionally, studies show that consumers tend to use less electricity when they are under a prepaid service, which would help put off the need to add more electric generation while reducing carbon dioxide emissions. While prepaid services are new to the electric industry, they are not new to other industries. People who buy LP gas have to pay for it when the tank is filled up. Gasoline stations require consumers to pay up front when they fill up a gas tank in their vehicle. Cell phone companies also offer prepaid services.

REMOTE DISCONNECT AND RECONNECT: An AMR/AMI system will allow the Cooperative to disconnect and reconnect electric services from the office. There will no longer be a need to send a truck and a lineman to physically disconnect or reconnect an electric service. This will save on fuel, vehicle, and labor expenses.

ELECTRICITY THEFT DETECTION: The majority of MJM members are extremely honest and would never intentionally steal power. However, there is a growing number of consumers who steal power. When someone steals electricity, all of the other members of the Cooperative are affected since the power was used, an expense was incurred, and bills must be paid. Sometimes the cost can be recovered and sometimes it cannot. With an AMR/AMI system, the Cooperative will know immediately if anyone tampers with a meter.

PROBLEMS ASSOCIATED WITH THE HONOR SYSTEM ARE ELIMINATED: A self-read system makes it very easy for members to report incorrect meter readings intentionally. Thankfully most MJM Electric Cooperative members report correct meter readings. However, a growing number of members are intentionally reporting incorrect amounts of kilowatt hours used. Early in 2009, MJM read the 9,200 meters on its system and found that approximately 750,000 kWh’s had not been reported, resulting in more than $80,000 in revenue that had not been paid. Most people today would not trust an honor system if they owned and operated a self-serve gasoline station. Unfortunately it is becoming more difficult to accept an honor system when it comes to the consumption of electricity and that is why the majority of electric providers use meter readers or some type of AMR/AMI system. An AMR/AMI system will make it much more difficult to cheat on an electric bill.

BILLING ACCURACY: A frequent problem associated with a self-read meter is that meter readings provided are not accurate. Sometimes a member may also read the meter later than normal and end up with a larger bill. Then the member may request an adjustment. Sometimes, people just don’t read the meter. Meters also fail and if they do, and no one notices for a month or more, an estimate has to be made. In any one of these situations, billing accuracy is affected and so is the amount of revenue that should be collected.

METER READING: Members will not need to read the meter anymore once an AMR/AMI system is operational. For some members, reading the meter has never been a problem. Nonetheless, a growing number of members find meter reading an inconvenience. Additionally, the meter could be considered a cash register and if it isn’t working correctly, revenue is lost. Meters fail and mechanical meters slow down. An AMR/AMI system will not only read the meter, it will also help to ensure that proper meter readings are obtained when needed.

The Cooperative will be installing substation equipment for the AMR/AMI system throughout 2011 and H.D. Supply will be changing out meters for the next 12 to 14 months. Hopefully by March of 2012, the AMR/AMI system will be completely installed and operational. Please note that members should continue to read their own meter until notified by the Cooperative that it is no longer necessary to read the meter.

MJM Electric Cooperative is committed to providing safe, reliable and affordable electric service in an environmentally responsible manner. Installing an AMR/AMI system will be beneficial in assisting the Cooperative to provide better service, improve efficiency and save members money. An AMR/AMI system is an investment that adds value and a number of benefits while paying for itself in eight years or less. If the cost of the system was financed over a 10 year period and none of the cost saving benefits were taken into account, the cost to the member works out to be approximately $2 per month. However, when one takes into account the direct and indirect savings associated with the system, the cost is minimal. When one considers all of the benefits associated with an AMR/AMI system, it is easy to understand why most electric cooperatives across the nation have taken advantage of the technology available and invested in AMR/AMI systems. Installing an AMR/AMI system adds value to the service being provided and is just one more way MJM Electric Cooperative is meeting the needs and desires of its members.