Issues in Smart Metering

Locating System Intelligence

There is a continuing debate in the utility industry as to whether smart metering data and data
processing should be distributed or centralized.

One side of this debate advocated sending data from smart meters to a central repository where
it would be checked for accuracy and stored. The data can then be made available to various
processes such as billing, outage reporting, forecasting, asset management, water conservations,
and analytics. It can also be exported to web portals or in-home devices to better assist
customers in assessing and planning consumption.

Others suggest distributed processing to facilitate immediate feedback to customers who can use
the data to make decisions about water use. Various display devices and home area networks
incorporate some data processing to provide not only real-time consumption totals but also
alerts, usage comparisons, historical perspectives, and cost estimates.

It now seems clear the data from smart meters will be used in both a distributed and centralized
manner. Centralized data brings the advantages of cleaned data to supply many business and operational applications in a utility as well a serve as a base of data for analysis. Distributed data
provides the consumer with timely feedback and can also be used to control home appliances.

Hidden Costs of Smart Metering

Many smart metering costs are obvious. It is relatively easy to estimate the costs for smart
meters, two-way communications infrastructure to facilitate communications to the smart meter,
a meter data management application to do the initial processing of the meter data and store it in
a central repository, and the integration necessary for utility applications to utilize the data.
Less immediately apparent are costs to:

 Add technology and infrastructure to implement and support smart meters and the huge
volumes of data they generate.

 Modify or replace the customer information system (CIS).

 Expand asset tracking to include such things as smart meter communication capability,
software, and firmware version.

 Expand or obtain software to view and analyze the usage data by various utility business and
operating functions.

 Obtain or expand middleware and messaging software to reliably handle communications
between applications, alerts from field devices, and various data communications methods.

 Upgrade or acquire additional hardware to store and process interval usage data.

 Educate customers about the meter replacement project, including its anticipated costs and
benefits.

 Research and design new rate tariffs.

 Retrain existing staff to install and maintain the smart meters and new infrastructure.

IT Infrastructure to Look For:

• Database, middleware, and business applications that can scale to accommodate exceptionally high data volumes without loss of processing throughput.

• Middleware to monitor and govern security and regulatory compliance.

• Asset management applications that can expand to cover the new equipment and maintenance schedules required for Smart Metering.

• Mobile workforce management applications that schedule meter installation (including coordination with the custyomer), minimize installation time and costs, and provide field technicians with robust checklists, monitoring, and other support to help them install and maintain the new equipment properly.

• Customer information and/or customer relationship management applications that provide easy ways to communicate with customers and to offer new programs.

• Customer information systems that easily and rapidly implement new rates.

• Customer information systems that support contact center representatives with computerized forms and menus, onscreen help, and business process assistants that help in efforts to explain Smart Metering to customers. 

Managing Meter Data

Smart Metering inevitably increases the amount of meter data utilities must handle. In the
residential arena, for instance, hour-long intervals may replace four or 12 annual reads per
customer with 8,760. That’s a 730-fold increase that many water billing systems will not be able
to handle at all.

To solve the problem of too much data, water utilities moving toward Smart Metering
increasingly implement a meter data management (MDM) application specifically designed to
gather large volumes of data from multiple meter types, store it, and process it according to
specific utility needs.

Water utilities can implement Smart Metering without meter data management by channeling
data directly to the billing / customer information system (CIS). This frequently proves less than
ideal, however. Only a few of the best CIS applications on today’s market can handle huge data
volumes. And even those that can operate under utility-specific rules that generally place a high
priority on getting accurate bills into customer hands so that revenue flow continues
uninterrupted. While other departments clearly need the data that the CIS has gathered, they
must frequently wait for it until the billing cycle is complete.

Meter data management in contrast, can assign equal priority to all data recipients. It can also
perform preliminary processing for each recipient so that individual departments do not to deal
either with raw data or with data processed according to the needs of billing.

Meter data management’s independent service function may be further refined through the
addition of a meter data warehouse. In situations where both exist, the meter data management
typically manages real-time, transactional processing while the warehouse handles data extraction,
reporting, and analytical processing.

Separating the meter data management from the billing solution has clear advantages. It
maintains bill production efficiency while providing even-handed data access to all departments.
It can reduce the cost of building and maintaining application interfaces. It permits a utility to
add security to meter communications and data without complicating customer access to bill
payment and analysis websites. And meter data management lets utilities change the source of the
meter data with no negative effect on other IT systems and architecture.

IT Infrastructure to Look For:

• A flexible, high-volume meter data management application that can validate, edit, estimate; and store a high volume of meter reads while providing information to applications across the utility in the formats and timeframes needed.

The Organizational Implications of Meter Data Management

Meter data management is, for most utilities, a new type of application. It shatters the typical
utility IT model in which each department “owns” its own set of applications.

Meter data management treats every department as its “owner.” It thus forces departments to
work together. If meter data management is to serve all equally efficiently, then the various  
stakeholders must share information. They must agree to application configurations that serve all
needs optimally.

This process of information sharing is proving eye opening to departmental heads. Suddenly,
sharp minds have the knowledge and tools to propose better, more efficient program
administration.

In other words, meter data management is becoming an avenue for rethinking utility business
processes independent of existing departmental boundaries. It is the first major utility silobreaking application.

IT Infrastructure to Look For:

• Applications that arrive pre-integrated and/or use standards to facilitate integrated business processes and reduce the long-term maintenance costs of application integration.

• Applications flexible enough to rapidly accommodate new ideas and programs that will inevitably be developed by utility staff.

Expanding the Concept

Meter data management, by providing both unique and common resources to multiple
applications, has the potential to advance the quest for multi-departmental business process
orchestration. If it succeeds in this role—as it very likely will—other functions may quickly
follow suit. Scheduling, for instance, might be pulled out of asset management, field
management, and appointment setting and consolidated into a single instance that serves multiple
departments.

Meter data management owned cooperatively among departments rather than individually, could
thus be the “missing link” that facilitates the smooth flow of business processes across the
organization that thus increases the efficiency with which utilities serve all stakeholders.

IT Infrastructure to Look For:

• Integrated applications that can share infrastructure resources.

Weighing Smart Metering’s Costs And Benefits

While discussion of smart metering abounds, many utilities hesitate when they see the large
financial commitments involved and the uncertainties of customer response. Will they be able to
recover the costs? Will they find themselves on the bleeding rather than leading edge of
technology?

Fortunately, there are ways to mitigate the risks involved. 

Including All Potential Benefits

Smart Metering may be hard to cost-justify if it rests solely on lower water use. It is easier to costjustify when it includes, for instance, the value of:

 Ensuring that all meters are recording water flow following repair of a break in a main.

 Remote programming that enables customers to use new products or services to advance
community and environmental.

 Fewer meter readers, which means lower total costs for salary, benefits, and workers’
compensation.

 Remote rather than expensive and occasionally risky on-site disconnects or flow restrictions.
Consider in this context the current cost of technician time, fuel to transport the crew to the
site, vehicular wear and tear, and insurance.

 Less wasted time in attempts to pinpoint the size and source of leaks and breaks.

 Lower risk to public safety from flooded intersections or lack of service to hydrants.

 Better meter reading accuracy, resulting in fewer calls to the contact center.

 Faster theft or other loss detection.

 Lower electricity costs (for those utilities using electric pumps).

 Reduced use of chemicals currently used to treat water that is then wasted through leakage
from water mains or via customer-premises leaks from pipes or fixtures.

 Longer lifespans for water treatment equipment.

IT Infrastructure to Look For:

• Gateways that can check on meter operational status and report problems.
• Asset management systems that can analyze meter performance and check warranty status automatically.
• (For water utilities that use electric pumping) Meter data management and/or customer information systems that facilitate

time-of-use or demand response programs.

Valuing Conservation

For most water utilities, the most important Smart Metering benefit is the role it can play in
conservation.

As governments and citizens become increasingly conscious of the potential for water shortages,
emphasis on conservation increases. While few jurisdictions have monetized the value of, for
instance, maintaining aquifer levels, the potentially devastating effect of aquifer depletion is clear.
So is over-use of reservoir supply—a situation confronting many regions where droughts are
becoming more severe while populations continue to increase.  

That does not mean, of course, that water utilities can gain approval for Smart Metering merely
by invoking conservation. It does mean, however, that regulators are more likely to value
conservation as a non-monetized benefit of Smart Metering.

Conclusion

There is every reason to believe that Smart Metering will replace most of today’s
electromechanical metering approaches within the foreseeable future. At today’s prices, many
utilities are constructing conservative business cases that foresee a relatively short payback
periods for Smart Metering investments. Rapidly falling prices and the multiple advantages to
both customers and utilities should make the systems even more compelling.

As a result, prudent water utilities worldwide are increasingly factoring Smart Metering into longterm IT and customer-program strategies.