Over the past 20 years, the increasing recognition that climate change poses a grave threat to our society has given rise to an entirely new clean energy economy. Almost every ambitious clean energy plan recognizes the importance of innovation in renewable generation, distributed energy resources, energy efficiency and electrification. However, these plans often neglect the role of the distribution grid and miss an opportunity to leverage a tool that has been part of the system almost since its inception: the meter.
In 1881, Thomas Edison patented the ability to measure energy usage via the meter. The meter became an essential tool for accurately billing customers and over time, advancements in metering technology have delivered cost-effective improvements to utility operations, including reduced meter-reading costs, enhanced outage detection and lowered peak demand via time-of-use rates.
However, today’s next-generation smart meters have the potential to do much more. They are powerful computers that can facilitate vital conversations between customers’ investments in clean energy and the grid. They can be the solution to making the grid cleaner, more reliable and more resilient, and empowering customers.
But smart meters are not being used in this way, and thus customers are not reaping the full value of their investment. The first wave of smart meter rollouts left many regulators, elected officials and consumer advocates underwhelmed because the business cases were built on cash-register functionality and basic outage management. While these benefits may barely satisfy a cost-benefit analysis, alone they reflect an outdated approach to utilizing advanced metering infrastructure (AMI) that does not capture the full potential of modern capabilities. Every aspect of our economy has been transformed by the digital revolution, and yet we’re not leveraging the digital capabilities of every meter.
Continuing down this road would be like giving every customer an iPhone but limiting its functionality to that of a car phone — the ability to place calls on the go, but no GPS, no email, no camera. Sure, that investment would have greater benefits than a rotary phone, but it would be a colossal waste of money.
In any other industry, consumers simply refuse to make investments that are not maximized for their desired outcomes. However, when it comes to electric meters, they don’t have that choice; they are at the mercy of state regulators who are charged with evaluating utility investment proposals. In this landscape, many regulators view their role as asking whether to approve investments in smart meters.
That approach has led to rejections in states including Virginia, Kentucky and Massachusetts. However, the real question that regulators should be asking — and are asking in Connecticut, New Jersey, New York and elsewhere — is: “How can we get maximum value from smart meters for customers, our economy and clean energy goals?”
Next-generation smart meters with on-meter grid-edge computing (AMI 2.0) can process hundreds of millions of data points and distill them into immediate, actionable insights for customers and the grid; provide real-time system visibility to inform both planning and operations; detect anomalies that are the precursors to outages and other system failures; and enable localized optimization that can empower everything from demand management to self-islanding grids.
The local optimization capabilities of AMI 2.0, in particular, can decrease the cost and increase the value of integrating distributed energy resources, including mechanisms to aggregate DERs to provide distribution-level and wholesale market services. Without AMI 2.0 as the glue to connect and integrate DERs, our ability to rely on these resources to achieve clean energy goals will be greatly hindered.
An AMI 2.0 system is essential to future-proofing investments and cost-effectively achieving clean energy goals, and the data from AMI 2.0 also enables policymakers to establish metrics that ensure transparency and accountability, as well as affordability.
To ensure that AMI 2.0 becomes the industry standard and a common tool for the modern, clean electric grid, state regulators must set requirements for AMI capabilities and outcomes in their initial approval orders. Leaving the discussion of additional benefits for later will lead to a procurement process that does not factor in future use cases, and therefore AMI will quickly become outdated, prematurely becoming a stranded asset unable to deliver key clean energy benefits.
For example, most utilities did not design their initial AMI rollouts with the use case of voltage optimization in mind. When those utilities later decided to pursue AMI-enabled voltage optimization, they found that find their deployed AMI systems lack necessary capabilities, including the ability to capture the right voltage data; the ability to host on-meter software to generate voltage insights locally; and the communications bandwidth to efficiently update on-meter software and transmit useful voltage data back to central systems in a timely manner.
Technology advances have already transformed so much of our lives, from the way we work to the way we learn. They’ve also transformed the energy industry, especially in how we generate and use power. However, to fully realize the promise of a clean energy economy, we must also leverage technology to maximize the most basic tool that already exists at every customer's location. To do so, public policymakers, customers and energy providers must all demand the highest functionality and flexibility from every investment in meters.
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Nora Mead Brownell, co-founder of Espy Energy Solutions, served on the Federal Energy Regulatory Commission, the Pennsylvania Public Utility Commission, and on the boards of several energy and utility companies, including as chair of the board of Pacific Gas & Electric.
Josh Brumberger is the chief executive officer of Utilidata, an industry leader in grid edge optimization, and serves as vice chair of the Rhode Island Public Transit Authority.
