Continuing turmoil in the utility industry has made it increasingly difficult for some utilities to make the business case for investment in an automated meter reading system (AMR) especially where non-residential customers are concerned. Economic justifications for large-scale AMR investment continue to diverge, but most remain driven by savings in labour costs associated with meter reading.

Capturing the value of control of loads or dispatch of customers’ on-site generation under volatile hourly market pricing has proven to be challenging, however. As a result, few utility AMR decisions fully reflect how the evolving technology can alter the customer relationship or help utility and customer co-ordinate their actions to manage electricity demands and assets in the rapidly changing business environment.

Remote meter reading itself turns out in hindsight to be only a limited test of the powerful technologies that have emerged. Electronic metering, meter relays, load control devices, communication interfaces, and software platforms originally developed to accommodate remote meter reading have been reassembled by enterprising vendors into highly customised, dynamic customer solutions. Some of these use an array of alternative communication paths, including the Internet. A myriad of non-meter reading applications enabled by such ‘AMR-like’ technologies are possible. Moreover, the technology has evolved to where it is comparable to point-of-sale systems deployed by large retailers as the centerpiece of their IT infrastructures. The opportunity for utilities to influence these new technology applications and participate in their deployment is strategic, and not to be missed.

Figure 1: Remote meter reading with AMR - Utility and Customer Coexist
Figure 1. Remote Meter Reading with AMR—Utility and Customer Coexist


Most electricity customers, even businesses, continue to receive service under traditional tariffs that bill total kWh usage for an entire month, with the meter read just once during each billing cycle. The mechanics of rate design cast each customer in a tariff class as having a similar pattern of usage. In fact, nothing could be further from the truth. Every customer’s pattern of use is essentially unique, and customers respond differently to price. Technology creates a bridge to differentiated rates that reflect individual customer requirements and to more dynamic pricing that promises to better balance supply and demand, leading to lower costs all round.

AMR systems have long been viewed as the technology with the potential to overcome practical limitations inherent to the electricity sector (electricity lacks anything like the computerised phone switches that capture the detailed data necessary for highly creative pricing of calling services). However, many utilities have stuck to what they know best. They have used AMR-like technologies to harvest low hanging fruit. Elimination of on-site meter reading has been achieved through deployment of proven, low-risk AMR systems, with mobile van-based technologies accounting for the majority of utility installations to date for residential applications.

The investment cost of such a one-way communication system can often be absorbed by the utility without precipitating a rate case before regulators; the return on investment is predictable; and risks associated with re-engineering of utility operations are avoided. Justification of the additional investment to read complex, polyphase meters and to enable advanced utility programmes for large commercial and industrial customers has been more elusive, however. This has often limited the application of a powerful technology solution to a decidedly tactical application, namely reading single phase meters more economically. Millions of residential customers’ electricity meters are now read remotely by walk-by, drive-by, radio network, or power line carrier systems.

Figure 2: Current and Emerging Applications of AMR-like Technologies

Figure 2. Current and Emerging Applications of AMR-like Technologies 


Nevertheless, after two decades of evolutionary development AMR appears to be at the crossroads. In spite of massive industry investment, AMR’s impact on the customer’s fundamental relationship with their utility – the rates they pay and the signals they receive to guide their use of the product – has thus far been minimal. The fact that their meter is now read remotely is inconsequential to most customers; in fact, the changeover went virtually unnoticed. The essential aspects of the utility-customer relationship remain as before, and the wider technology potentials that go along with AMR-like systems have not yet been realised.

In short, using AMR-like technology to read meters alone does little to encourage the utility and customer to work closely together to optimise electrical usage and demand. Figure 1 shows how the utility and customer tend to co-exist where an AMR system has been deployed for the primary purpose of reading meters. The utility retrieves meter data electronically while the customer exercises control over end-use equipment at each site being managed, independently and without direct utility input.


Most AMR-like systems incorporate features that go well beyond remote meter reading requirements. They:

  • Deliver time-sensitive pricing information to customers during each day.
  • Signal the customer of utility events such as peak demand or high fuel price periods.
  • Receive monitoring signals from the customer site regarding such parameters as power quality deviations or indoor air quality.
  • Remotely cycle customer equipment on and off, subject to the customer’s prior approval.
  • Give the utility and customer access to metering information between scheduled meter readings.
  • Provide customers with a continuous stream of site monitoring data via the Internet.

A wide range of advanced customer applications already takes advantage of these capabilities and more are being discovered, as shown in figure 2. Very often these applications involve the customer’s facility manager overseeing energy-using equipment and assets such as generators at multiple remote sites from a central location. The technology fits neatly into the customer’s own hands. They can remotely manage their electrical demand, equipment and production processes. But without utility involvement and appropriate tariffs, it is unlikely that customers will realise the greatest possible economic benefits.

Direct customer sales by a number of technology vendors who have reassembled the components of AMR systems into new integrated solutions are less than ideal for both utility and customer. Reducing demand at the time of the utility’s coincident system peak, for example, is more valuable than reducing demand at the time of the customer’s own billing peak. But today’s rates do not always embody the right incentive signals, overlooking the increasingly sophisticated technology in use.


A sampling of advanced programme applications gives a flavour of how the technology has been reapplied by leading utilities and Independent System Operators (ISOs) to meet dynamic customer requirements in the complex electricity market setting:

  • eMeter’s Commercial Real-Time Metering Service for Pacific Gas & Electric. In partnership with the California Energy Commission and a multitude of hardware and software partners, eMeter provides an integrated solution for real-time metering at nearly 8,000 commercial sites. Fifteen minute load data is collected nightly via Skytel’s two-way paging network, validated, and delivered to the utility’s desktop via password-protected Web site. According to Chris King, eMeter’s Chief Strategy Officer, “eMeter’s Power Information Platform is a multi-dimensional technology that marries advanced metering hardware and software systems with business processes to provide a complete solution for utilities in the design, build, and operation of advanced metering systems.”
  • Engage Networks’ Internet-based Communication System Open Solution (IBCS-OS) for ISO New England. In 2003, eLutions, Inc. (a wholly-owned subsidiary of Engage Networks) was selected by ISO-NE to implement the IBCS-OS for event notification and observation of the near real-time demand response. The solution includes event notification and termination, message formats, data transfer formats and required data transfer protocols, and was specifically designed to automate and manage the energy curtailment programmes offered by ISO-NE. IBCS-OS is a zero-client solution for demand response with device- level interface, which creates maximum flexibility under ISO-NE demand response programs,” says Paul Doucas, Managing Director of Software Services for Engage Networks, Inc. The company develops networking hardware equipment and application software for Internet-based, wide-area, real-time energy information and control of energy at the enterprise level.
  • Stonewater Control Systems’ energy1stsm Service for Sacramento Municipal Utility District (SMUD). Stonewater®’s energy1st services were selected to automate real-time control of lighting, HVAC and other equipment for SMUD’s PowerDirect programme. The Internet-based solution allows the utility to notify customers of near-term curtailment events and enables the customer to pledge hourly load reductions.

The technology also automates the customer load reduction via the energy1st gateway. According to Kim Weaver, Vice President of Marketing for Stonewater, “A myriad of applications that haven’t been discovered yet can be enabled by these technologies.”

Delivery of these technology solutions is equally unconventional. Partnering by companies that produce electronic meters, control devices, software platforms and communication paths to deliver an integrated solution is the rule of the day. Since virtually no one produces all the pieces single-handedly, the challenge is to integrate off-the-shelf components into solutions that meet individual customers’ needs, and this demands open system architectures and a high degree of co-operation.

Most solutions are designed to leverage the utility’s and customer’s existing infrastructures, especially where communications infrastructure is concerned. The solutions tend to be communication path neutral, supporting multiple alternatives from among public and private radio frequency systems, paging and cellular networks, analogue and digital modems, satellite, and Internet gateways.

Figure 3: Beyond AMR: Enabling the customer relationship
Figure 3. Beyond AMR: Enabling the Customer Relationship

Integrated network using AMR
Figure 4. Integrated Network Using AMR-like Technology for Shared Monitoring and Control


What do these new applications of AMR-like technology mean for utilities? Quite simply, that a window of opportunity has been opened. The new applications allow utilities to maintain dynamic relationships with customers, especially major accounts with complex requirements and systems. As figure 3 suggests, large customer programmes are the ones most likely to require two-way, close-to-real-time communications with meters capable of logging multiple registers of time interval data. And because the number of major accounts is relatively small, the technology architecture also needs to be scaleable, allowing customers to participate regardless of site location.

Figure 4 shows how the current utility/customer co-existence can be transformed into a substantially more satisfying arrangement – one that is capable of meeting the needs of both utility and customer. Under such an architecture, the electronic meter becomes an ‘intelligent client’ on a metering information network managed by the utility’s servers, which double as meter data collection nodes. Such a network may ultimately rival the utility’s corporate information network, in terms of mission criticality, scale and reach.


The transformation of AMR-like technology from handheld device for meter reading automation, to remote meter reading, to network-based meter reading has brought the technology across an important corporate threshold. AMR-like technology enables advanced customer applications in much the same way as the retail point of sale systems that are at the core of large retail operations such as Home Depot or J.C. Penney. Accordingly, the technology must be fully integrated into the overall IT infrastructure for reliable, highly assured operations. Moreover, IT management assumes a key role in the selection, implementation and operation of the metering information network. Such IT involvement was neither obvious nor necessary when the technology was limited to handheld devices carried into the field by meter readers.

Most importantly, utilities must be involved when technologies are deployed by anyone to enhance customers’ ability to monitor and control their electric loads. Otherwise, system benefits such as deferral of distribution upgrades and new generation plant will continue to be a lost opportunity. The challenge for utilities is to figure out how to be a constructive part of the technology deployment process already underway.