20030506Comments.pdf

RECEIVED /1)FILED
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
2003MAY"'6 AHII:32
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UTILITiES COI.H1!SSION
May 5, 2003
In the "Matter of the Investigation
Of Time Of Use Pricing For Idaho,
Power Residential Customers
Filed on Behalf of the Citizens of the Sate of Idaho
Case No: IPC-02-
Response to Order No. 29196
Time-of-Use Rates
Response to Order No. 29226
Notice of Public Workshop
BY:
Tom D. Tamarkin
2737 Eastern Avenue
Sacramento, California 95821
916-482-2000
Patrick R. Clifford
5132 Montecito Place
Boise, Idaho 83740
208-323-4201
COMES NOW before the State of Idaho Public Utilities Commission, Messieurs
Patrick R. Clifford of Boise, Idaho and Tom D. Tamarkin of Sacramento, California,
who do hereby request, declare, and note for the record:
1.0 The Public Utilities Commission has made the determination that Time-of-
Use rates may not be feasible or practical for residential accounts serviced by the Idaho
Power Company due to the cost associated with a TOU compliant power meter.
The Public Utilities Commission has made the determination that Automatic
Meter Reading (AMR) systems should be installed system wide by the Idaho Power
Company.
Point 1.0 and 2.0 may be inconsistent given today s state-of-the-art
technology. Should Idaho Power find it most cost effective to implement Automatic
Meter Reading (AMR) through the adoption and installation of new electronic
communicating power meters, the incremental cost of including such new features as
peak demand rate compatibility, time-of-use rate compatibility, theft of power
notification, over and under voltage reporting, service outage reporting, etc., is
negligible yet the very use of such features may provide the Idaho Power Company with
overwhelming economic advantages far in excess of the operational efficiencies gained
through standard Automatic Meter Reading (AMR.)
Clarification should be provided with respect not only to the results of any
Automatic Meter Reading (AMR) Systems piloted or tested by Idaho Power Company
in terms of cost savings, projected rate of return, and internal rate of return on invested
capital but also the precise nature of such trials including system topology and
component descriptions, type of accounts targeted for the initial tests, duration of tests,
analysis methodology and the involvement of any third party consultants and/or
vendors.
Idaho Power Company should be directed by the Public Utilities Commission
to study and develop innovative solutions that combine the basic features of Automatic
Meter Reading (AMR) with other more far reaching features such as consumer demand
side energy management, power factor monitoring for local appliance preventive
maintenance, and various value-added products and services.The Idaho Power
Company can offer these solutions to consumers to help consumers reduce their power
expenditures and generate new non-power revenues for Idaho Power Company. Such
an approach may allow the company to enjoy the benefits of a system wide AMR
deployment financed by third parties, and with no negative debt related financial
impact on the Idaho Power Company.
Through incorporation by reference hereto, the attached "white paper
entitled The Benefits of Combinin!! AMR. Ener2V Mana!!ement", Utility Remote
Account Access and Information Distribution" should be widely distributed to all Idaho
Public Utilities Commissioners and remain attached hereto for archival and retrieval
by any interested parties. The purpose of the aforesaid white paper is to create an
awareness of the opportunities an AMR deployment can represent in view of toady
technology. The objective should be to encourage a relationship of partnership between
the utility, customers, and the Idaho Public Utilities through the total transparency
established by providing the customer immediate usage feedback and up to the second
pricing and accumulated cost information through remote in-home displays which
communicate to the modern utility meter.
Respectfully Submitted,
Dated this 5th day of May, 2003
0f1Tom D. Tamarkin
~A~~~~4Patrick R lifford
Attest:
. . .. ...
USCL
Corporation
The Convergence of Technology and Market Needs
The Benefits of Combining AMR, Energy Management, Utility Remote Account
Access and Information Distribution
By:
Tom D. Tamarkin, CEO
USCL Corporation
Abstract:
As energy and utility service prices rise, increasing numbers of consumers are looking for ways
to manage the amount of money spent on electricity, gas and water. The fundamental problem
consumers have in managing their use of utility commodities, be it water, gas, or electricity, is
that there is no practical way to tell how much of each product they are using and therefore how
much they are spending at any point in time. Further, they do not know how much it costs to use
a given appliance, maintain a certain household temperature, or water the lawn.
Utility companies have no way to know how much electricity, gas or water customers use in real
time. They can not tell what the maximum peak amount of electricity, gas or water was used nor
can they develop a corollary between time of service use and amount. The overwhelming
maj ority of residential utility accounts are billed by taking an accumulation of services used over
a thirty-day period of time. As a result of these metering limitations, consumers don t receive
the benefit of flexible pricing options that more closely match their individual usage profiles.
Further, a utility typically obtains these accumulated monthly readings by sending a human
meter reader to each and every account to visually inspect a local utility meter and manually
record the readings in some type of hand held data terminal. Many residences have metered
electric, gas and water services with local meters read once a month by different meter readers
representing each utility service. This represents a significant cost to the utilities and their
customers. There are also liability issues in these security conscious times.
Recent advances in microelectronics and communications technology have vastly outpaced the
traditional installed means of metering, meter reading and billing. Today s technology can
provide the consumer up to the second real time and accumulated energy usage and pricing
information, provide the means to manage and control such usage, and automatically transport
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this information to multiple utilities such as electric, gas and water. The same technology
provides the utilities significant positive economic advantages based on new control ability,
reduction of operating expenses and new revenue streams resulting from new value added
products and services. Further, new financing alternatives are created which eliminates the
necessity of the utility having to pay for the acquisition costs associated with the new metering
equipment. Cash strapped utilities can use these advantages to help return to profitability.
Background:
In the mid to late 1990s it was generally
accepted that deregulation was going
change the structure of electric utility
services in many if not most states by giving
the consumer the power to choose their
electricity supplier. Customer choice and
competition would stimulate suppliers to
provide low-cost power and to introduce a
variety of advanced and diverse services.
Experiments with deregulation have not yet
been fine-tuned to produce the anticipated
results and more time is needed to study the
viability and best methods of deregulation.
One key advanced technology promoted
through the initial steps of deregulation has
proven itself. Utility companies nationwide
have embraced Automated Meter Reading
and even Real Time Metering and placed it
on the top of their list of ways to reduce
operating costs and improve the level
Customer Service.
The term Automatic Meter Reading or AMR
has, unfortunately, been misused. Literally,
the term implies reading an entire population
of utility meters without human intervention
and processing the resultant data leading to
the preparation of the customer s monthly
bill. Many sub-optimal approaches to
incremental gains in meter reading
efficiency have been labeled AMR over the
years by vendors and users alike. These
have been useful both in terms of furthering
the state-of-the-art as well as in practical
economic terms. In the twenty-
first century, however, AMR must be truly
automatic, without human intervention. This
requires the local capture of meter data at
the service subscriber meter and the
remote telemetry of the data via some type
of networked communications. And, given
the current level of data acquisition
microcomputing, and communications
technology, AMR is naturally evolving into
Real Time Metering or RTM.
Automatic Meter Reading (AMR) was first
tested forty years ago when trials were
conducted by AT&T in cooperation with a
group of utilities and Westinghouse. After
those successful experiments, AT&T offeredto provide phone system based AMR
services at $2 per meter per read. The price
was four times more than the monthly cost
of the human based manual reading systemand the program was considered
economically unfeasible.
In the early 1980s the trend began to replace
card and pencil based manual reading
systems with electronic hand held data
terminal based systems. This was typically
referred to as EMR or Electronic Meter
Reading. This was the beginning of the
gradual process towards meter reading
automation. The use of a hand held data
terminal by a human meter reader greatly
increased accuracy, reduced re-reads and
increased the number of meters read per
route but still required routes to be walked
by fleets of meter readers. In 1992 the first
field trials were held in Garland, Texas and
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Dallas, Texas which implemented radio
transmitters placed inside standard electro-
mechanical meters and which were "read"
by hand held terminals containing receivers
thus allowing a meter to be read remotely,
but not automatically, from distances up to
several hundred feet away. This was the
beginning of the current era of AMR. The
City of Garland project implemented a "pole
top" data collector which received signals
from a plurality of meters in a local 2 500foot radius and transmitted that
concentrated" information to the utility
over a telephone line. A further contribution
of the Garland project was the testing of an
in-home display which provided the
customer with real time feedback in kWh
and dollars and cents as to his or her usage.
Early studies showed that this real time
feedback lead to a 10 to 20% reduction of
the amount of electricity used by the
customers who became actively aware in
real time of the cost of their consumption
habits.
Throughout the 90s, the maj or suppliers of
hand held based EMR systems worked hard
to reduce the cost associated with the
integration of the radio transmitter
technology in the utility meter and improve
sensitivity of the receivers as well as the
means to upload the data to the utilities.
Since virtually all utilities now use some
form of hand held system, it was generally
considered to be conventional wisdom to
migrate from the hand held EMR system to
semi-automatic walk-by or drive-
approach. Such approaches can greatly
reduce the number of meter readers required
but at the same time this approach lacks
many of the economic, operational and
customer service related benefits associatedwith true AMR and bi-directional
communications.
Discussion of AMR Components:
Any Automatic Meter Reading or Real Time
Metering system consists of the following
three primary components:
1. Meter with communications interface.
Firstly there must be a local utility servicemeter. The basic meter measures
consumption. Old
electric meters tendto be electro-
mechanical. New
state-of-the-art
meters tend to be
entirely electronicwith no moving
parts. An electro-
mechanical meter
may be used in an
AMR system if it
has a sensing and
communication
interface added to it. These are commonly
referred to as implant modules. Such an
implant module has an internal power
supply, sensor processor, and
communications interface such as a
telephone modem or radio transmitter. The
sensor is used to measure and track the
movement of the electro-mechanical meter
spinning disk from which dial indications
may be derived. There are natural
limitations in terms of the granularity and
resolution of the data that limit the use of the
electro-mechanical meter as a data capture
device for the real time presentation of
instantaneous power use. For that reason the
preferred AMR system will implement
electronic meters. These are capable of
providing highly accurate real time usage
information as opposed to average usage
integrated over a long time period. There
are significant cost advantages associated
with the use of electronic meters. Today
electronic meters are less expensive than
. '.. - .
An example of a
traditional electro-
mechanical power meter
with a radio transmitter
implant module.
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electro-mechanical meters coupled with
sensors and communications modules. This
relates to the fact that the electronic
components in the meter forming the basic
meter function are also used in the
communications portion of the meter thus
reducing overall component cost.
An example of a modern communicating
electronic, electric power meter with RF based
bi-directional LAN communications and
internal residential gateway.
Gas and water meters may be coupled with
encoders and communications devices such
as radio transmitters which are battery
operated and "wake up" once every few
hours and transmit their data to a gate way.
The gateway must have electrical power and
a communications interface to the network.
There is no more logical place for this
gateway to reside than inside the electrical
power meter since it has a natural source of
power and the internal communications
circuitry and infrastructure.
2. Communications System. A commun-
ications system or network is required for
the transmission or remote telemetry of data
and control signals between the customer
meters and the utility company. Typically
such communications takes the form of
telephone, power line carrier radio
frequency, cable television cellular
telephone, pager network, or low earth orbit
satellite. The ideal communications media
will be transparent to the service subscriber
bi-directional, and always available from
either the meter or utility end of the loop.
must be readily available throughout the
utility service area and low cost in terms of
transaction fees or inexpensive to install and
maintain if independent from a public access
communications network. The trend in the
industry is the use of Internet Protocol
communications and transmission over the
Internet.
3. Central office or utility back office
system. This refers to the communications
equipment and computer systems at the
utility office used to receive the data as sent
over the communications network, store it in
data base format, and interface it to the
billing system.
Selection of AMR/RTM Components:
The selection of AMR or R TM components
must be made based on the following set of
criteria:
Economic Benefits:
The economic benefits gained by the utility
through the reduction of operating costs and
the generation of new revenues through the
provision of new services. With older AMR
technology such as implanted modules in
electro-mechanical meters and walk by,
drive by receivers, the benefits are limited to
a reduction in meter reading costs through
man power reduction and reduced rereads.
Newer AMR/RTM technology blends a
whole host of cost reduction and revenue
generation opportunities by combining many
functions beyond just meter reading.
Examples include real time service outage
reporting, tamper and theft of power
reporting, introduction of variable rate tariffs
(such as peak demand and time of use
tariffs); remote service connect/disconnect;
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Broadband
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Utilit : custom werLlnecarrier
RF Repeeter Network
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improved cash flow from problem accounts
and a reduction of the wholesale cost of
power during peak demand conditions
through a reduction of peak demand through
voluntary demand side management by
consumers empowered with real time
pricing and usage information.
Further, the utility can generate additional
revenue through the sale of additional value
added products and services such
electrical appliance preventive maintenance
monitoring, security, medical alert and a
myriad of additional products meant to add
convienence and peace of mind to home
owners and small business operators as well
as generally increasing the perceived level
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Pre-Procassing
of the utility s customer service.
Significant attention needs to be paid to the
communications or metering gateway at the
subscriber s location to insure that the major
system components can be shared by
multiple utilities such as electric, gas, and
water. Just as multiple utilities currently
share the cost of a common undergroundtrench and right-of-way, sharing
communications and infrastructure costs
greatly reduces the capital expenses
associated with the deployment and
operation of the AMR/RTM system as they
can be amortized over the long-term data
transaction costs to two or more utilities.
RF USBiRS.232 to
Home Computer
RF to Digital SeHOp
Television Box
Home
Network
. Getawey
Block diagram of a residential implementation of a Smart Utilities Meter utilizing internet
protocols with RF wireless communicating with gas and water meters and an in-home
consumer Energy Management Systems Display.
Growth Expansion and Component Life
Cycle:
Emerging trends such as the movement
towards in-home computer networks and
residential gateways must be carefully
analyzed, as these will have a significant
impact on data communications carriers
over the next few years. As more and more
demand becomes apparent for these
products, cheaper forms of high speed real
time data communications will become
available which may be integrated into the
utility s AMR/RTM system. Therefore
great care must be taken to select
components having the appropriate life
cycle requirements and which are capable of
forward migration as technology progresses.
As an example, an electronic meter must
have a life expectancy of a minimum of
twenty years in order to be considered for
mass deployment. The meter should also be
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capable of supporting virtually all
communication carrier technologies without
having to be replaced or taken apart to be
modified in order to support a future
transition from telephone to RF to cable by
way of example. One approach is to
implement a standard short haul
communication technique such as ISM band
RF to a local gateway. As long as there is a
simple and standard way to get data into and
out of the meter, the meter stands as an
anchor for its life cycle while other aspects
of the AMRJRTM system such as the
communications network are free to change
over time as new services and technologies
become available.
A utility must think beyond meter reading.The system components necessary to
support automatic meter reading may be
used to support a variety of other functions
as well. Thus, the electric meter must be
capable of supporting not only today s meter
reading requirements but tomorrow s data
and information services between the utility
service and the customer through the link
thusly established.
Value Proposition to the Constituents:
The relationship between the supply side
(utility) and the demand side ( customer)
under the watchful eye of government
regulation within the environment and
community defines the constituents, each of
which have unique needs which can be
enhanced through an effective link based on
the AMR/R TM system.
Consumer: The consumer must
empowered to make intelligent choicesabout the consumption of utility
commodities such as electricity, gas and
water. Cost of service and usage
information must be provided in real time in
a form easily monitored and understood. A
car has a fuel gauge and a speedometer. A
fuel pump at the fuel station has a
dispensing meter at the point of delivery.
Thus the car operator knows the price of fuel
at the time of purchase and can make
decisions on the use of his car based on his
budget and ability. A home must have a fuel
A wireless in-home display providing up-to-the-second
price and consumption information for electricity, gas
and water usage is an essential tool for today
consumer,
meter and delivery price gauge as well. This
takes the form of an in-home display and
control panel monitoring electricity, gas and
water use. This translates into an energy
management system that almost invariably
results in savings through the more judicious
use of energy and utility services. Just as
consumers will pay for various home
improvements leading to energy savings
such as insulation improved thermal
windows and state of the art Energy Star
approved appliances, this tool becomes a
product or service that is valuable to the
consumer. The consumer should be charged
for the tool. Financing should be provided.
And education should be provided allowing
the tool to be put into productive use by
actually lowering the consumer s monthly
energy bill even after the monthly finance
charge.
Utility: The direct real time linkage or
communications between the customer and
the utility provides many benefits to the
utility beyond just the reduction of meter
reading costs. These include improved
operations efficiency, improved customer
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satisfaction improved cash flow
performance, reduction of power acquisition
costs in peak demand periods, reduction of
transmission and distribution system
maintenance associated with high peak
demand periods, and the manifold benefits
of controlling the peak demand use of
multiple utility services such as electricity
and water simultaneously. There is a direct
but often overlooked, benefit in controlling
multiple utility service product consumption
in peak time of use periods. This relates to
the fact that both gas and water must be
pumped through their respective delivery
systems. This requires a great amount of
electricity that is proportional to the load on
the gas and water delivery network.
Additionally, the utility now has a direct
communications link with each and every
custome~ through which it may deliver new
and creative value added products and
services to the consumer. These will aid in
the retention of consumer loyalty and
customer satisfaction as well as in the
generation of new revenues.
Regulating Authorities: Once the
consumer and utility is directly coupled
and consumers are fully cognizant of their
purchase and usage decisions, the
compliance function of the regulator is
greatly enhanced. An enormous amount of
information which may be used in the
statistical profiling of accounts becomes a
byproduct of the system and is easily
archived and presented for use both in
distribution load management and the
regulation analysis capacities.
Further, once the proper type of state-of-the-
art meter technology is installed all
customers are ready to implement future
tariffs such as peak demand, time of use and
real time pricing with no additional cost.
The regulators in partnership with the utility
may implement various incentive based rate
programs in a control test fashion and then
react very quickly with full deployment asthe benefits become apparent. The
incremental cost associated to incorporate
full time of use and peak demand features in
a low cost electronic meter with today
technology is negligible and from a
technical standpoint is predicated on solid
state memory cost at the integrated circuit
component level and nothing more. Finally,
having this metering technology in place
makes the utility "de-regulation ready" if
and when deregulation becomes an issue.
Through the use of Real Time Metering,
customers may be connected directly to
alternative ESPs both in terms of pricing
information and usage data from which the
ESPs may properly bill.
Environment: AMR/RTM helps to protect
the environment. Pollution is reduced by
the direct impact of the elimination of meter
reading fleet vehicles as well as the
reduction of peak demand generation that
often requires smaller fossil fuel peaking
plants to be put into operation.
Community: The local community will
benefit as the utility partners with private
business to provide, install, and maintain
new equipment. Creative entrepreneurs and
business can aid the utility with its
deployment through the provision of goods
services, and third party financing.
Conclusion:
The deployment of an AMR/R TM system
by a utility offers great advantages and
opportunities to the consumer utility,
environment, and regulatory authorities
alike.
Cash strapped utilities looking for new ways
to increase revenues and reduce operating
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costs should pay especially close attention to
the opportunities afforded by AMR/RTM.
The needs of the consumer should be put at
the top of the list when considering system
topology and component selection.
By integrating key consumer benefits and
functionality into the AMR/R TM system, a
large portion of the system acquisition cost
may be passed on to the consumer thus
reducing or eliminating capital requirements
on the utility. Through the use of third party
financing and amortization over the utility
bill, the consumer can actually reduce his or
her utility expenditure through savings
gained through conservation.
Today, the average utility customer s only
contact with the utility is once a month when
a bill is received, opened and a check
returned. By providing a highly visible, real
time interactive interface such as a
dedicated electronic display panel in the
home, the utility has established the ability
to communicate with the customer on a
daily if not hourly basis. The utility is
transformed from a faceless provider of an
almost abstract commodity such as electrons
or methane gas molecules, and an entity
whose only purpose in the minds of many
consumers is to collect montWy payments
to a dynamic and helpful part of every day
life through the provision of information and
value added services that contribute to the
life style and entertainment of all its
customers.
An AMR/RTM system starts with the meter.
The meter must be versatile and support the
future evolution of communications and data
carriers. The meter should be both basic and
yet support a multitude of features and
functions to allow the utility to make the
best use of its captive communications
gateway located in virtually every house and
commercial structure in its territory.
When a utility models the benefits and economic impact of AMR/RTM it should consider the
following:
Ability to pass on system equipment acquisition costs to consumer in a win-win fashion.
Ability to provide the consumer with real time information on pricing, consumption and
billing.
Ability to implement future variable tariff programs such as time of use, peak demand and
real time pricing without having to change out meters and equipment in the field.
Ability to be real time pricing and deregulation ready without future changes in hardware.
Ability to transition from one communications media and network to another in the future
without changing the meter.
Reduction of costs associated with meter reading.
Reduction of costs associated with account turn on and turn off through automation.
Reduction of costs associated with service outage reporting and automated service dispatch.
Reduction of lost revenue due to old and progressively less accurate meters being replaced
by highly accurate new meters.
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Reduction of peak demand costs associated with power acquisition at peak demand periods.
Aggregation with other utilities to reduce equipment and infrastructure costs by sharing with
multiple users.
Generation of new revenue through the sale of V APS delivered to the customer.
Improvement in environmental impact through the reduction of pollution resulting from the
lower peak power demands and elimination of meter reading vehicle fleets.
The preceding paper was written by Tom D. Tamarkin. Mr. Tamarkin is currently President &
CEO of USCL Corporation in Sacramento, California. Mr. Tamarkin is past Vice President and
General Manager of Datamatic in Richardson, Texas, an early pioneer in EMR hand held meter-
reading systems. In 1989, Mr. Tamarkin was co-author and publisher of The Complete
Handbook of AMR"and developed the SAMREIM product (Software for Automatic Meter
Reading Economic Impact Modeling which has been used by hundreds of utilities world-wide to
determine present meter reading costs and model future costs based on various AMR methods.
In 1991 Mr. Tamarkin formed the Tamar Company in Dallas Texas who developed the first radio
based walk by-drive by AMR systems as piloted with the City of Garland, Texas and TU Electric
in Dallas, Texas. In 1995 , Mr. Tamarkin formed USCL Corporation now located in Sacramento
where he resides with his wife Emily and son Jeremy. He may be contacted at USCL
Corporation, 2737 Eastern Avenue, Sacramento California 95821. 916-482-2000
tdtamarkin~uscl corp. com
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