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Advanced Metering Industry Poised to Take Off in Current Utility Push

Pushed by regulators and the aggressive approach unfolding in California, the industry supporting advanced meter infrastructure (AMI) technology is gearing up for growth it could only hope for a decade ago. A combination of improved technology and regulatory-induced incentives for major utilities to change out their entire systems is sparking the growth.

But if California is any indication, each utility will approach the transition differently, seeking a combination of improved customer benefits and streamlined utility operations from emergency response to lower collection/billing costs. What is clear is that the AMI genie is out of the bottle, as was underscored last July when the California Public Utilities Commission (CPUC) approved Pacific Gas and Electric Co.'s aggressive, billion-dollar-plus, five-year transition plan for installing 9.3 million "SmartMeter" devices for its 4.2 million natural gas customers and 5.1 million electric customers in Northern California.

Elsewhere, utilities such as Salt River Project (SRP) in Arizona have found that pilot tests of AMI have proven cost-effective. AMI also can help improve interaction with customers, and allow customers to take more direct control over the amounts of energy used and what prices they pay for the power or the gas.

Admittedly lagging behind PG&E, the other mammoth electric utility, Southern California Edison Co., has chosen to seek the best technology available for empowering customers to interface with other smart energy technologies that may not be directly linked to their utility service.

Edison attributes different approaches to the differing "business circumstance and grid designs" of the individual utilities. It determined some time ago that "it would not be cost-effective to use older off-the-shelf meter technology. Instead, we asked meter manufacturers for enhanced meter functions and capabilities that would provide customers with significantly more control over their energy use and costs," a utility AMI fact sheet says.

Edison thinks the AMI industry response to its challenge has been "impressive," causing it to believe that the devices now being developed for its 5.3 million customers could "benefit every home and small business we serve."

With a recent acceleration of its transition to AMI, resulting from new assurances by the metering industry that they could meet Edison's request faster, the Rosemead, CA-based utility's plans to replace five million residential and small commercial customer meters with what it calls "first-in-the-industry, two-way home communications devices" is now ahead of schedule.

The key for Edison is the use of so-called "open architecture" with its systems, something that will not be included initially in the PG&E devices being installed, although they will have the capability of being upgraded to more of an open architecture. Subject to CPUC approval, Edison will begin field testing the new, advanced meters in 2007, and will fully deploy the new units between mid-2008 and mid-2012.

The CPUC in 2004 directed the state's major private-sector utilities to explore the feasibility of upgrading home and small business meters to types used to measure energy use by larger industrial customers. In response, Edison, PG&E and Sempra's two utilities, San Diego Gas and Electric Co. and Southern California Gas Co., reviewed the various options in the AMI sphere. Edison took the tack of proposing with meter manufacturers to develop an enhanced, solid-state electric meter.

What Edison and other utilities are looking for are smart systems that cut costs and improve grid reliability. Edison also argues that its focus on open architecture will provide "greater customer benefits."

PG&E proposes to spend $1.74 billion to deploy all of its smart devices on meters and will have the transition completed first -- in 2011. The cost of the upgrade will be offset longer term by operational power-buying savings, the utility told state regulators.

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