Understanding and Maximizing AMI Benefits for Utilities Thomas Asp 
 
 CTC Technology & Energy 847.922.3978 www.CTCnet.us APPA Business and Financial Conference September 22, 2013 Structure of Today’s Workshop • Review basic frameworks & definitions – What is Advanced Metering Infrastructure (AMI)? – Solutions, tools, and applications – Regulatory compact • Disruptive solutions and pressures on the electric business – AMI as a tool to help shape business – Does AMI become a cost of doing business? – Is it necessary to remain viable? • Calculating the costs & direct benefits – AMI as a tool for process improvement The classical AMI cost- – Total cost of ownership benefit – Measured activities/benefit areas analysis (NPV and ROI) – Net Present Value (NPV) and Return on Investment (ROI) analysis • Defining AMI requirements – Outline your needs vs. providing network specifications © CTC Technology & Energy 2013 1 Discussion • Why are you in business? – Today? – Tomorrow? • What business are you in? – Today? – Tomorrow? © CTC Technology & Energy 2013 2 Framework and Definitions © CTC Technology & Energy 2013 3 What is AMI? • There is neither a standard definition nor common industry set of requirements that describe AMI. – Many definitions describe AMI as an enhanced Automatic Meter Reading (AMR) system, with the most common distinction between AMR and AMI being the network’s ability to support on-demand readings directly from a meter or other distribution device. – Other definitions provide a general statement of functionality and cost. AMI is a subset of distribution monitoring, control, and analysis © CTC Technology & Energy 2013 4 What is AMI? • A key function of AMI is to provide a foundation (communication and data integration) for broader demand side management and distribution automation efforts. – It is critical to consider the complete range of utility automation attributes for the long-term—not just what is needed for information exchange at the time of the initial deployment. – Meter readings may evolve to become more “real-time”, and any AMI implementation must provide the ability to cost-effectively migrate to this “real-time” information exchange. Remember every AMI solution is proprietary – and the “functionality” acquired at implementation is often what you have for the life of the network. © CTC Technology & Energy 2013 5 Driving Value - Some Definitions • A Solution is the resolution to a business problem. • A Tool is a product, system or process that can serve as a stand alone solution or as part of a solution. • An Application is the means by which a tool is applied. • An AMI System is a tool. They vary in performance and functionality. • An AMI Application is one that requires an AMI system. It may serve as a stand alone solution or as a part of a solution. The breadth of “applications” supported will be critical in the selection of the AMI solution – cost, performance, and benefits. © CTC Technology & Energy 2013 6 What is the Value of AMI? • AMI is a tool. The value of the tool is not in having it but in how it is used and applied. • The ultimate value is driven by process and organizational change as it applies to consumers, utility operations, and management of power supply. Not all value is directly measureable. © CTC Technology & Energy 2013 7 Obtaining AMI Value • How did businesses initially cost-justify the cost of a Personal Computer (PC)? – It was a comparison of the time it would take to produce a letter on a PC vs. a typewriter. – The “benefits” were based on the time reduction of producing the final document (easier corrections and edits). – The real long-term benefits were not realized until the organization process and operations evolved. AMI business cases based solely on labor and efficiency savings often fall short of showing a positive NPV/ROI © CTC Technology & Energy 2013 8 Example of Indirect AMI Value • AMI can increase consumer satisfaction, empower consumer choices, and assist in consumer conservation and cost control. These indirect benefits not only impact consumers but utility employees as well. • Empowerment of staff with current, timely, and accurate information can resolve issues quicker and with less conflict. This empowerment increases the quality of employee work life and consumer satisfaction. © CTC Technology & Energy 2013 9