Water conservation, gas safety and energy efficiency are just some of the benefits of moving to AMI systems, along with substantial cost savings. But the dream we’re being sold by the industry is not all that it’s made out to be. Here’s why.

The concept is simple: automate meter readings and remove humans from the equation, eliminating human error. Sounds great in theory. But in practice, what we often end up with, is a highly efficient, high-tech, automated front end; interfaced with a completely outdated, labour intensive, low-tech back end.

This unfortunately reduces the potential savings that can be made from smart meters and erodes the return on investment. 

While it makes perfect sense to automate the process end-to-end, there is a lot of resistance to do that. People are understandably anxious about change. Office personnel are often reluctant to give up the processes they have helped shape over the years and know so well. Trusting computers is still difficult for some, even after decades of computing.

Better savings achieved with automated billing systems

Comparisons of savings by electrical utilities participating in the Department of Energy’s Smart Grid Investment Grant Program in similar timeframes show that those with automated billing systems achieved better savings than those with a manual billing system.

Central Maine Power (CMP) for instance, reported saving more than $7 million in meter operations costs in 2013 from AMI deployment. This works out to around $11.25/meter. The utility also achieved cash flow savings of almost $180,000 (in 2011-2013) by reducing the time between reading and billing.

Pepco in Washington, DC on the other hand, which was not able to integrate AMI with their billing system, reported cost savings of more than $2 million. With Pepco’s 277,222 meters, they saved an average of $7.21/meter, $4.04 less per unit than CMP. Pepco was also unable to enjoy the cash flow savings from reduced time between reading and billing.

Wasted Technology

Thomas Tobin, CEO of automated billing system developer, Diversified Billing, said that all this new technology is of little use if humans are still required to read, interpret and act on the data.  “We now have utility billing and customer service systems that read the data and automatically act on it accordingly.” said Mr. Tobin

“Diversified billing systems already interface with Smart Metering Systems, that part is simple.” Said Mr. Tobin. “The challenge is getting the staff of utilities to accept the new technology and to help oversee and implement the new systems so they can validate the results – and be ready to pass the new systems onto the new generation of office workers.”