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Making the Case for AMI Part 6: Choosing Technology Among Many Options

This is the sixth installment of Making the Case for Advanced Metering Infrastructure.

Deploying an advanced metering infrastructure (AMI) system is a large investment and commitment to a technology road map that will impact utility operations for many years. Making the proper choice here can either help or hinder future distribution system improvements.

In this post: With so many technology options, how does a utility choose?

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With so many technology options available for advanced metering infrastructure, how can your utility evaluate and strategize for the best options for your unique grid?

Do Your Due Diligence!

Do you have a consultant you work with on projects such as substation design and distribution planning?

You may want to interview your usual consulting group for their knowledge of AMI systems before handing them the keys to such a strategic initiative. Make sure they have a competency in such systems and have a history of choosing systems that best suit each utility.

Below are some of my own key considerations when helping a utility chart their technology road map. Keep your eye on the future, not just the immediate AMI project.

Meter Data

Take into account future plans with the meter data. You are not buying a stand-alone product. There will be future integrations to systems other than the billing software.

Also, not every utility needs a meter data management (MDM) solution or an expensive GIS integration. Many AMI vendors offer some basic functionality previously limited to larger, more expensive dedicated software packages.

Considering Only Price?

Think again. Don’t make a recommendation on price alone. Low-cost solutions can often cost much more down the road once the vendor has you captive. Such hidden costs include:

Repeaters

Are all necessary signal repeaters included in the bid? Some vendors will go light on expensive communications equipment during the bidding process by quoting a best case scenario then surprise you after the fact with added costs for “unforeseen communications issues.” Interviewing others who have gone before you could shed some light on expenses not covered in the base bid.

Integration Costs

Get a commitment up front on how much it will cost to make your AMI system talk to your existing or future OMS, SCADA, GIS and billing systems. This is often a big cost adder down the road because… well… you don’t have a choice anymore. You are stuck with them.

System Upgrades

Make sure your yearly support and maintenance fees include software upgrades.

Make Your Wish List Before Considering Price

Most importantly, make your wish list and assign dollar values to the features you’ve identified.

How much is it worth to get unsolicited real-time outage and power quality alarms from each meter and not just when they are polled? How much is it worth to you to get interval data at every interval and not just once a day, week or month?

If specific features are important, you should be able to assign a dollar value to them. Saving a little money on capital expenses can quickly drive up operating expenses for the long term if the technology you choose doesn’t fulfill your wish list. It’s even possible to miss the original point of the system if you lose sight of the founding objectives.

Hosted Systems

Sometimes hosted systems make sense, but situations vary.

If you’re evaluating a hosted solution, be sure to go beyond the first three years when determining the total cost of ownership (TCO). The numbers look quite different when you look at the long-term costs.

Side note: Some hosting providers will quote an added expense of hiring an IT resource to manage the AMI system. Frankly, if you didn’t need an IT guy before the AMI system, you won’t need one after. Or if you do, you may be looking at the wrong solution and/or a poor customer support organization.

Look at All Manufacturers

Don’t select an AMI vendor based on a familiarity with a specific manufacturer. A company that makes a great transformer or regulator may or may not have the best AMI solution for your needs.

Technology evolves, and so should the options you or your consultant evaluates. If you or the consultant have a preconceived view of your best option before a thorough discussion of needs and objectives, challenge that thinking.

Similarly, make sure your consultant doesn’t have a “default” vendor they recommend for every project. The field is changing fast, and technology companies leapfrog each other all the time. Don’t buy last years’ model.

Make the Business Case

Write a business case. Use some of the value propositions in this series of articles.

If you can’t show a long-term benefit or cost savings, save your members’ or rate payers’ money. It seems like everyone’s doing some kind of smart grid project these days. Avoid the herd mentality and only invest in efforts which improve your bottom line, meet critical needs or provide customer service.

Find Support After the Sale

Support, support, support! Ask around and find customers using the candidate technologies.

Poor support can make you soon forget the money you saved on the original purchase. Check references, but also talk to references not supplied by the manufacturer. Again, the professional engineers at your local distributor can go a long way here.

Future-proof Your Investment

Make it future-proof. And yes, this term is over used.

There will always be a proprietary component to any system, but the one that doesn’t lock you into a specific backhaul technology is worth its weight in gold. Take that from someone who’s lived through it.

Licensed frequencies come and go, and new, better and cheaper communication media are constantly coming over the horizon. Minimize your risk by using easily upgradable radio technologies when possible.

Critically Think About Signal Propagation

Review each vendor’s signal propagation studies before ruling out any one technology.

There is a lot of propaganda regarding which communication technologies are best for your given situation. Unfortunately, this misinformation is often perpetuated by competing vendors eager to discredit the competition.

Review Contract Language

The final contract language is critically important. Will your utility have any contractual recourse if a vendor fails to keep your system safe, backed up and secure in case of accident, disaster or cyber attack?

The Department of Energy has put together a comprehensive guide for utilities procuring any grid technology. Don’t expose your organization to liabilities arising from weak contract language.

Find a Qualified Distributor

Buy through a distributor who represents a portfolio of smart grid technologies and is appropriately staffed with professional engineers.

Not only do they provide a great first line of support but, if you see your account manager on a regular basis, he or she can keep the engineers aware of any support you may need even after the sale is long over.

Even more valuable is having a partner capable of going to bat for you. There is nothing more frustrating than being caught between your AMI vendor and another technology provider pointing fingers at each other when integration issues arise.

Using a distributor with engineering resources to advocate for you (and wield a bigger stick, if necessary) is a big advantage when things don’t go as planned.

Evaluate Meter Quality and History

While any manufacturer will experience production issues from time to time, a repeated history of design, quality and product safety issues indicates a larger problem inside the organization.

Make sure end-point quality and history are part of your evaluation. A simple Web search of the meter manufacturer can often reveal a culture of poor design when issues resurface. Also, consider the length and coverage of all vendor warranties.

What Is the Manufacturer’s Financial Position?

Verify the vendor’s financial viability. Are they stable and growing? Are they on the auction block? What happens if your vendor of choice is acquired or ceases operation?

Keep in mind that there are two primary reasons a company gets acquired… because their business is attractive or because they reside in the bargain bin. Avoid the latter.

If you’re considering a comprehensive AMI system, make sure you know what questions to ask before it’s too late.

Stay tuned as I wrap up this series, and reach out to your Border States representative or me for a discussion on your long-term technology needs.