 Utilities Turn to Meter Data Management Vendors to Reduce Risk - By Patti Harper-Slaboszewicz Daily IssueAlert 8/24/2005 Free As utilities gain experience with advanced metering systems and the advantages of interval meter data, utilities are considering, and buying, a relatively new product: meter data management (MDM) software. The reason is that the way in which utilities plan for meter data management will likely determine the operational benefits utilities are able to attain from their investment in advanced metering in a reasonable time frame. The key to successful implementation of advanced metering is to leverage the value of the meter data. It is not enough to retrieve the data; the utility must enable the right people and systems to receive the right information at the right time. In that sense, interval meter data can be considered an enterprise-level asset, not just an input to the billing process. It is this perspective that will allow utilities to gain the most value from their advanced metering data. Otherwise, the utility has a lot of data but still has no useful information to make informed decisions. The best practice that has emerged from the last decade of experience for meter data management is to utilize a vendor neutral MDM system designed to provide the following functionality, including:
Over time, utilities have tried three ways to manage meter data:
What are the advantages and risks of these three options? Option 1: AMI Vendor as MDM Provider The first option may seem initially attractive to utilities if the majority of endpoints use the product of one vendor. (It's important to remember that virtually every utility will have at least two AMR systems: one for mass market customers and one for large commercial/industrial customers, the latter of which almost all utilities have already). In this option, each interface between the vendor's meter data collection system and other utility systems is developed individually. The utility and AMR vendors then need at a minimum to maintain two interfaces to the billing system, and to each other IT system that will use meter data, such as customer service, the outage management system (OMS), load forecasting, etc. The risk that the utility faces is the direct link of each AMR system into the other utility systems. Any change in the AMR system will require changes to core utility systems, which is particularly risky for systems such as CIS and other complex IT systems. Essentially in this model, each utility IT system has to perform integration of meter data from all of the AMR systems. In practice, these challenges have meant that utilities limit the number of utility systems using meter data, usually to only the billing system and customer service. As an example of what might be required to utilize metering data for outage restoration with this option of meter data management, the AMR systems may handle verifying power has been restored in different ways. The C&I AMR endpoint may initiate a communication that power has been restored whereas the small customer AMR endpoint may wait to be polled. Even if both AMR vendors have applications specifically to support outage restoration, the OMS will have to integrate the outage applications of the two AMR vendors. The challenge of building point-to-point interfaces with multiple AMR systems means that many utilities that choose this route take much longer to integrate the meter data into business units beyond CIS and customer service - and most have not done so at all. These utilities are faced with lots of data, but little information. The utilities also find it more difficult to take advantage of new AMR technologies since this would require a new set of interfaces and additional integration at the system level. Thus, utilities find their options significantly limited as time goes by. Option 2: Implement MDM via Customizing Core Business Systems The second option is for utilities to develop their own MDM functionality in-house as a custom development project. This model entails adding all of the new functions needed to manage an AMR system to core business systems such as CIS, OMS, Field Services, and Asset Management. For example, CIS can be modified to track replacement meters, communication modules, communication nodes, relationships between meters and communication nodes (i.e., which node is expecting data from which meter), and so on. The OMS can be modified to receive data in the format and manner exported by the AMR system and perform all of the steps needed to make the data useful to the OMS. And so on. Such changes to core business systems are typically expensive and complex. This option reduces flexibility as well, because upgrades to the AMR system or the addition of a new AMR system require a repeat of the custom development effort. Further, this model places the utility's core business processes at risk; the last thing a utility wants to do is have billing delayed or have outage response compromised as a result of changing core business systems on the fly. Option 3: Use a Vendor-Neutral, Purpose-Built MDM The third option is to implement an MDM specifically designed to provide critical MDM functionality. With this, the utility can support multiple AMR vendors, isolate the utility systems from the details of the various AMR systems, and take full advantage of the capabilities of all of its AMR systems. As it turns out, some utilities that have invested in customizing their systems to implement MDM functions (Option 2) have purchased or are now looking to purchase MDM from a vendor. PPL and Kansas City Power and Light (KCP&L) initially opted to develop their own MDM functionality, but now have now issued Requests for Information (RFI) for a type 3 solution. These utilities have apparently decided that a purpose-built MDM is a better solution than maintaining and modifying a customized system. There are at least six MDM vendors that can manage meter data from multiple AMR systems (Itron, eMeter, WACs, LodeStar, Olameter, and FirstPoint). Utilities are turning to these vendors, usually before, but in some cases even after investing in efforts to develop their own MDM functionality, to leverage the expertise of these firms in maintaining super large databases and successfully supporting a long list of utility applications, such as CIS, outage management, customer service, load forecasting, engineering and planning, executive dashboards, workforce management, risk management, energy procurement, regulatory affairs, customer data presentation, and validation, editing, estimation (VEE). Purpose-built MDM software allows utilities to separate collecting meter data from using meter data. Changes can be made in utility applications without affecting the meter collection activity, and vice versa. Utilities can take advantage of the experience of MDM vendors and not waste time and resources solving problems that have already been solved many times over. This reduces the risk for utilities in managing large amounts of meter data and allows utilities to focus on managing their assets with better and more timely information. Utilities can test the MDM software—for example full scalability—without fear of putting core business systems in peril. Puget Sound Energy, Xcel, Southern Companies, and Idaho Power all opted for a type 3 solution. Jacksonville Electric Authority (JEA) recently implemented an MDM to handle data from its MV-90, Cellnet, and Itron Hand-held data collection systems. Exelon and PG&E requested a type 3 MDM in their AMR RFPs. Other utilities likely to implement a purpose-built MDM are San Diego Gas and Electric, Portland General, and First Energy. Timing: When to Decide on MDM Architecture? When should utilities choose a model for MDM? UtiliPoint research shows that utilities that selected an MDM system before selecting and installing AMR are very pleased because it allowed the utilities to consider more AMR vendors than otherwise. The marginal costs for an additional AMR vendor is limited to the cost of interfacing with the MDM system and can be estimated with enough precision to compare against the potential benefits. Utilities that did not invest in MDM early in the process have told UtiliPoint that if they were to do it over again, MDM would come first, and the AMR selection process second or in parallel. The changing picture of utility data is partly responsible for the interest in vendor MDM products. CIS used to be the major data repository for utilities. In modern utilities, however, billing and customer data are but two of ten or more large data sets, and billing and customer care are but two of many utility applications. As shown in Chart 1 "Modern Data Utility Overview". below, data is stored in the legacy databases and a number of relatively new databases such as GIS and mobile workforce management, as well as MDM.  Many utility applications draw data from multiple large databases, and use information and make decisions on how to manage utility assets with data integrated from these sources. Utilities might examine blink counts obtained from their MDM system (which in turn obtained the information from various AMR systems) combined with GIS and weather data to analyze where they need to concentrate their vegetation management efforts to avoid outages. The advantage of successfully analyzing information is a better managed utility. The risks of not doing so are emerging: cascading outages, higher costs, disgruntled customers and unhappy regulators. UtiliPoint's IssueAlerts are compiled based on the independent analysis of UtiliPoint consultants. The opinions expressed in UtiliPoint's IssueAlerts are not intended to predict financial performance of companies discussed, or to be the basis for investment decisions of any kind. UtiliPoint's sole purpose in publishing its IssueAlerts is to offer an independent perspective regarding the key events occurring in the energy industry, based on its long-standing reputation as an expert on energy issues. Copyright 2005. UtiliPoint International, Inc. All rights reserved. |
