PG&E To Implement Advanced Meter Reading Technology
Benefits of remote meter reading include improved customer service, better electric rate options and lower operating costs
San Francisco, CA — Pacific Gas and Electric Company has applied for regulatory approval to begin a five-year effort to install 9.3 million advanced meters for all of its gas and electric customers. These advanced meters use a technology that allow them to be read remotely and provide a wide-range of benefits to customers, the utility and the state.
Known as advanced metering infrastructure, or AMI, the technology would improve customer service and provide operational savings through increased efficiencies. AMI will also allow customers to take advantage of prices that vary by time of day – potentially realizing cost savings by shifting use from peak to off-peak. Doing so can reduce the cost of energy procurement and perhaps even help lessen California's growing need for more electric power and power infrastructure.
Customer benefits include speeding up power restoration during outages by enabling the utility to better pinpoint and analyze outages and restoration progress. In addition, customers no longer will need to unlock gates or tie up dogs on days utility meter readers are scheduled to visit their neighborhood. The need to estimate customers' bills when meter access is blocked will be virtually eliminated. AMI also will reduce the utility's energy purchasing costs by providing financial incentives for customers who voluntarily agree to rates that vary by time of day. This will encourage customers to shift electric use to off-peak periods, when power is cheaper. Peak hours are generally 2 to 7 p.m. weekdays.
"AMI technology will help us do our job better and more efficiently, and will help our customers conserve energy and even save money," said Tom Bottorff, senior vice president of customer services at the utility. "Every one of our customers will benefit from improved services. For example, with AMI we can pinpoint outages more quickly, which will make it easier for us to restore service faster. In addition, we will be able to offer new pricing options to each of our 5.1 million electric customers. This means that during summer peaks, customers who wait until after 7 p.m. to run dishwashers, clothes driers and other appliances, have the potential to lower their bills."
The AMI application stems from a 2002 California Public Utilities Commission order for utilities to consider programs and tools that offer customers improved options to reduce their electric usage during high-demand situations. California's investor-owned utilities were directed to explore AMI technologies and conduct a two-year statewide pilot program to gauge customer interest in dynamic pricing options. For the past year and a half, PG&E has been exploring AMI technology and deployment at other utilities, and evaluating vendor proposals.
California Energy Commissioner Arthur Rosenfeld praised the collaboration between the CEC, CPUC and PG&E to implement the utility's automated meter infrastructure and noted, "It is time for a high technology state like California to have a high technology electricity metering system that can respond on hot summer afternoons to help keep the lights on and the air conditioners humming. I am pleased that PG&E took this important step."
In 1994, Kansas City Power & Light was one of the first utilities to switch to advanced metering. More recently, the Italian government authorized installation of advanced meters for more than 30 million of the country's homes and businesses. Currently, more than a dozen U.S. utilities have or are moving towards deployment of AMI technology. "AMI is commercially proven, with nearly 50 million meters in use or being deployed that utilizing the technology worldwide," said Bottorff.
If the CPUC approves PG&E's filing by early 2006, PG&E expects to begin deploying advanced meters as early as spring 2006 and to offer dynamic rates to AMI-enabled customers that summer. Conversion of all electric and gas meters could be completed by 2011.
The deployment cost of AMI is estimated to be $1.46 billion, consisting of a capital cost of $1.25 billion and an estimated expense of $213 million. To fund this cost, PG&E is seeking slight rate increases. The increase for residential customers with average gas and electric use would total about 69 cents per month.
Over a 20-year period, about 90 percent of the total AMI deployment and operational costs are projected to be offset by operational savings. Lower electricity purchasing costs are projected to be enough to close the 10 percent gap and provide additional potential savings that would be applied to help offset future rate increases.
Given that AMI's deployment is expected to span over five years, PG&E believes the gradual phasing out of the meter reading function will provide ample time to mitigate the impact on employees who currently read PG&E's meters. PG&E has met with its unions and intends to provide retraining and make reasonable efforts to provide employment options to workers who wish to remain with the utility. Employment opportunities at PG&E will be positively influenced as the utility's customer base continues to grow by more than 2 percent a year and as a large number of employees are expected to retire over the next decade.
PG&E proposes to offer customers with advanced meters the opportunity to participate in new dynamic rate options, which will offer those customers who can reduce peak usage or shift electric usage to off-peak hours the chance to lower their energy bills. This new, critical peak pricing rate will be offered on an entirely voluntary basis to all residential and small commercial-industrial customers once their meters are activated for the new billing capability.
SOURCE: Pacific Gas and Electric Company