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Perspectives

Squeezing the Lemon: Extracting Value From Your AMI System

Squeezing the Lemon: Extracting Value From Your AMI System

Electric utilities are turning towards advanced metering infrastructure (AMI) technology as they work to transform and enhance utility operations, asset management and customer service. The benefits of AMI are well-known. But today, utilities now face a myriad of choices when it comes to evaluating their AMI investments.

In the past, utilities would install a new AMR or early generation AMI system, operate it for 15 years, and then replace it. This approach has since evolved, and now some utilities are pursuing a “continuous investment” paradigm, which is providing new options and strategies.

Extracting Full Value from Your AMI

Early utility investments in AMI have focused on the most obvious benefits, usually within the realm of easily accessible operational opportunity. But AMI can offer so much more – deeper process change, more complex analytics, work automation and extended leverage of granular data. Utilities are working to unlock the full suite of benefits from AMI systems, even as obsolescence becomes a growing consideration.

As a result, utilities are now giving careful thought to reinvesting in their AMI systems, versus wholesale replacement. This is not a simple decision, and takes into account the current state of the underlying technology, the depth of integration in place, the amount of change management already accomplished, and the potential impact of stranded assets.

Four Key Questions

As utilities work to understand and unlock all possible value from their AMI systems, they should ask themselves four key questions:

  1. Are there any originally planned AMI investment benefits that have gone unfulfilled? Why? Is this due to technological limitations, organizational change hurdles, or lack of management support?
  2. Are there additional functional capabilities that you have not leveraged yet, or enhancements that you have not implemented yet, from your AMI solution?
    • Is there system functionality that is not being used, such as alerts and alarms (e.g., voltage drops, temperature thresholds, tamper/theft); outage and restoration reporting or nested outage detection; and customer program support?
    • Are you using the latest capabilities from your AMI Technology? Have you reviewed what is available from system upgrades?
  3. Are you leveraging your AMI system to incorporate new business opportunities and technologies, e.g., demand response and distributed energy resources (DER)?
  4. Are you exposed to functional or technological obsolescence of your current AMI system?

Understanding AMI System Deployments

All too often, in typical AMI system deployments, the project team is focused on successfully deploying the technology and meeting the capital spending plan. With the team focused on the hands-on installation of network and metering devices, the consideration of additional benefits – operational improvement, business processes or organizational change – can become secondary thoughts.

Unfortunately, this can lead to certain capabilities being deferred, partially fulfilled or completely moved out of scope to meet the deployment schedule. AMI system owners are sometimes unaware of all the benefits that a fully utilized system may afford, such as the ability to use data to improve the utility operational, planning and engineering processes.

But system owners can still realize future opportunities. To make these deferred capabilities fully functional, utilities should identify unfulfilled or partially fulfilled opportunities and the steps necessary to achieve them.

System owners should perform a thorough review of their current AMI system to identify opportunities to leverage AMI’s “data mining” capabilities into more data-driven business processes. AMI optimization can help expand existing functionality – for example, regular preventative maintenance can lead to improved loss allocation and proactive measures; metering for direct generation and EV charging can lead to new rate developments; and summary billing can be expanded to improve labor costs and cash flow.

This process of discovery may even unveil opportunities for incremental upgrades. For example, embracing real-time customer data can enable direct access to meter usage, helping to enhance the customer experience. A “lost” or “orphaned” meter location could be upgraded to allow location system cross-referencing, distribution network integrity and a reduction in unbilled energy. Remote Connect and Remote Disconnect (RCRD) capabilities can lead to a reduction in field orders and costs while improving safety. Lastly, an outage management system could help reduce the number of trouble calls, while improving customer communications and system reliability.

By doing some investigating, and building a better understanding of how they can extract more value from their AMI systems, utilities can make more informed, accurate decisions when it comes to “invest vs. replace.”

Evaluating an AMI System

Black & Veatch has years of experience when it comes to performing technology/opportunity evaluations. Our technical and strategic consultants review the current system, the depth of data integration, and the full inventory of potential opportunities to identify potential opportunities to extract value from AMI systems.

Figure 1 illustrates a typical 12-week process to maximizing AMI. The process begins with a strategy workshop and review of the existing AMI system, which involves a full stakeholder and functional examination of all functional business areas, including customer services, billing, field and meter operations, distribution operations, rates and regulatory, finance, environmental and conservation, and other supporting business functions.

figure 1

Source: Black & Veatch

From there, we move into identifying and cataloguing potential opportunities. This process, backed by years of experience creating AMI business cases, is paired with the insights gained while reviewing the system’s current capabilities. The result – an AMI opportunity catalog that provides a prioritized list of opportunities and the functional requirements necessary to achieve them.

The team then performs a gap analysis to determine which opportunities cannot be satisfied by the AMI system in its current state, as well as the level of cost/effort necessary to achieve them. This opportunity catalog, along with the functional gap analysis, yields a high-level integration plan to guide AMI value extraction realization.

Future-Proofing Opportunity

We have found, throughout our experience, that this process tends to identify new opportunities through deeper utilization of what already exists, while also identifying smaller, incremental investments that can yield high returns. Albeit, some of the opportunities may be too high-cost, or require a nearly complete replacement of the existing system, yet are still considered important as they provide justification for any future system replacement decisions.

By taking this approach, AMI system owners can look beyond the wholesale replacement mentality, and instead, consider a continuous investment strategy that would help extend the life of the current AMI system while providing important technology investment options. By presenting new opportunities and options, this analysis will help uncover hidden value in the current system and convert them into tangible business benefits.

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