Wednesday, March 5, 2014

Muni utilities leveraging AMI ‘lessons learned’

By Patty Durand, Executive Director, SGCC

If you missed last week’s webinar on “AMI for Municipal Utilities,” I offer here a few of my own observations on the discussion we hosted. Of course feel free to listen to the archive here.

Data presented by the webinar moderator, SGCC’s Assistant Director K.C. Boyce, revealed that cooperative utilities originally (also known as EMCs, or coops) led the adoption of advanced metering infrastructure (AMI) including smart meters. Investor-owned utilities largely followed suit. And now municipal utilities are adopting AMI in greater numbers as they grasp the lessons learned by the coops and IOUs that went before them.

When asked about their AMI-related activities
in a live poll, 42 percent of our webinar participants said they had no current plans, 32 percent said they had plans underway, 16 percent had a pilot in progress and about 10 percent said that their AMI business case had been approved. Thus about 60 percent were actively pursuing AMI and its myriad potential benefits. In 2010, less than 5 percent were at this stage. That is an astounding rate of growth.

Developing a positive AMI business case
has always been fundamental to adoption, and rightly so. However, as with many smart grid-related investments, a broader view of consumer-oriented and future-oriented benefits is relevant. In this regard you may wish to review “SGCC Environmental and Economic Benefits” that we published last November. That research does a good job of documenting how a business case is made in the broadest possible sense, with the importance of consumer engagement well documented.

During our
AMI for Munis webinar, Erik Krause, supervisor for enterprise performance at the Sacramento Municipal Utility District (SMUD), described SMUD’s approach to customer engagement around AMI and smart grid. In contrast, Kent Massey, corporate technical consultant for the Electric Power Board (EPB) of Chattanooga, focused on community- and economic-oriented benefits. Both topics reflect certain advantages of the muni business model in which customers are also “shareholders”, and service to a well-defined community allows consideration of broader benefits.

Krause described SMUD’s drivers and objectives for AMI, then focused on customer engagement. Initially, SMUD sought to reduce operating costs and gain a positive return on its investment for AMI. But it recognized that AMI could provide more than revenue assurance through increased operational efficiencies and improved outage restoration. AMI represented a technology building block that enables SMUD to offer advanced services such as energy efficiency, demand response and dynamic pricing programs – all of which offers customers service options and mutually beneficial outcomes.

SMUD understood the value of effectively communicating current and future benefits before an AMI system was selected and implemented. So the utility performed “acceptance testing” of information regarding smart meters, SMUD’s customer service and its intended AMI-related messaging. For both residential and commercial customers, the core AMI message focused on its contribution to “improved service” and “more control over electric bills.”

SMUD communicated similarly with its own employees, as well as the gamut of external stakeholders, including community groups, elected officials and media. The utility explained, and it listened. The process helped reshape the staff’s knowledge and outlook, Krause said. When implementation began, SMUD communicated in five languages before, during and after smart meter installations. It trained customer service representatives and assigned some to handle “escalation” calls. Some employees served as community ambassadors. SMUD monitored social media to track and resolve issues as they occurred. Its board meetings offered the public an opportunity to comment. And it strove for transparency on challenges as well as successes.

Lessons learned, Krause said, included early development of a community-based engagement plan, the involvement of both internal and external stakeholders and the value of managing expectations. Not everyone will be happy with change, he noted.

Massey, in turn, said that EPB and the city of Chattanooga had aligned on a big picture driver for AMI by asking this question: what capabilities could it offer to a future-oriented approach to local economic development? Smart grid was seen by community leaders as a sound basis for attracting new businesses to the area to improve its economic vitality and answer that question.

Though EPB’s AMI drivers included the typical business case priorities, smart grid in general and AMI in particular were also viewed as a platform for innovation. EPB might expand its role in the community by, for instance, offering high-speed broadband to homes and businesses. And its decision to implement a city-wide fiber optic network for AMI data enabled that goal.

Thus EPB is more than just a municipal utility; it’s becoming a technology company, Massey said. That transition works well for Chattanooga and for EPB. In fact, Massey observed, “smart grid” is an elastic concept that awaits definition by each individual, municipal utility and its community, depending on local priorities.

Food for thought! Exciting times!

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