AMI Deployment: Reasons “Why Not” are Fading Away

While in some parts of the country, Smart Meters and Advanced Metering Infrastructure (AMI) technology are old news –  only 30% of all electric meters in the United States are “Smart” according to a recent report published by FERC.  The large majority of utilities have yet to convert their core metering infrastructure for a variety of reasons, including an aversion to the perceived risks, the large up-front costs associated with such a transformation, a lack of available experience with the technology and implementation effort, and a perceived lack of reliable benefits to utilities and their customers.  However, as AMI continues to evolve and cement itself as a core component of the utility landscape, many of these previous barriers to entry are disappearing.

While all have recognized the clear improvement opportunities within the existing methods for reading analog meters and generating customer bills, many utilities throughout the industry felt that the AMI technology, systems, and equipment were unproven and did not represent a prudent use of rate-payer or constituent financing.  However, the successful deployment of AMI technology and equipment in prominent utilities across the country over the last 5-10 years has helped to dispel many of the myths and perceived risks that previously surrounded it.   One key driver of this success has been the ongoing refinement and improvement in the equipment and supporting technology and systems that are being deployed.

As the industry moves toward AMI becoming the standard, vendors and suppliers are placing an increased importance on studying, analyzing, and refining their product offerings.  This includes leveraging emerging learnings tied to AMI network design and connectivity, system integration, metrology, and data management.  The level of IT security sophistication in the AMI space is also demonstrating the industry’s strong commitment to staying ahead of the curve against the threat of cyber attacks.

These learnings, along with efficiencies and improvements tied to production volume increases and overall supply chain maturity, are driving down the costs associated with AMI, thereby reducing the cost of entry to many utilities that are considering it.  It is also important to note that as AMI equipment and technology become more and more prevalent throughout the industry, the costs for support and replacement parts and equipment for dated technology will experience a significant spike.

In addition to the ongoing maturity of equipment and system vendors in the AMI space, more and more resources and professional service providers have gained valuable first-hand experience in the challenges and opportunities that exist within an AMI implementation effort.  Transformational programs of this nature are, by definition, complex and impactful to the entire organization.  The growing availability of resources and support within the industry that have worked through these challenges greatly improves the likelihood of successful deployment.  Specific areas where this experience is particularly valuable include Program Management, Change Management, and the identification and tracking of the RIGHT metrics and performance measures that will lead to sustained success.

Interested in discussing more? Contact me at dfreeman@westmonroepartners.com or come stop by and see us at Distributech Booth 620 Feb 2-5th.  We would love to hear your thoughts.

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Phone: 312-602-4000
Email: marketing@westmonroepartners.com
222 W. Adams
Chicago, IL 60606
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