Smart Utilities:

Although it may be surprising to some, until just a few short years ago, the fundamental method of operation of the major utilities–power, gas, water–had remained essentially unchanged for nearly a century!

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By Dr. Vishal Sharma

What Next-Generation Utilities are Gearing Up For

Although it may be surprising to some, until just a few short years ago, the fundamental method of operation of the major utilities–power, gas, water–had remained essentially unchanged for nearly a century! The delivery systems, the layout and maintenance of the infrastructure, and the method of operation (reading meters, billing customers, solving outage problems) all were fundamentally the same as they were when broad distribution of power, water, and gas through the utility networks began at the start of the 20th century.

Why are utilities interested in using wired, cable, wireless, and fiber optics in their business?

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The service areas and the customer base of the utilities have grown, literally exponentially, and continue to do so to this day. So, about a decade ago, when concerns over issues such as climate change, environmental impact, and resource conservation surfaced, there arose a need for cost-effective solutions for the management of the utility networks and regulation of demand. This led to the utility industry turning to intelligent ways to manage their operations and business processes, and set in motion the induction of a number of new technologies that would enable them to more effectively run their businesses. Indeed the reason that utilities have turned to advanced technology today is two-fold. To:

  • Utilize advanced technologies in communications, software, computing and mapping to streamline their own businesses, and, in some cases, to fundamentally change the way they operate and interact with the end-customer.
  • Apply these progressive technologies to better use their existing assets (e.g. power lines, fiber plant) to provide advanced or new services to their existing customer base.M

In the remainder of this article, we will focus on outlining what efficiencies the utilities are aiming for, and how these efficiencies are being achieved via the use of wireline, wireless, cable and fiber technologies. We will describe a bit what the new technologies are and how they are used. We will then focus on some utilities that are using, or planning the use of, these technologies, and give a couple of representative examples of such new initiatives. Thereafter, we will give a brief landscape of the various vendors/players involved in supplying these advanced solutions, and conclude with a look to what the future holds, say a decade from today.

What technologies are used and how?

As mentioned earlier, the utilities need to look out 10-20 years into the future, and develop techniques and infrastructure that would remain viable over this time horizon. In addition, the need to conserve and utilize investment wisely requires that the existing infrastructure be used as efficiently as possible–whether it be pipelines, tanks, and valves for the gas and water utilities or power lines, transformers, distribution centers and meters for the power utilities.

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In this context, there are six technologies that we see as collectively making an impact in utility industry operations. These are:


    i) Geographic information systems (GIS) technology
    ii) Communications software
    iii) Mobile computing solutions
    iv) Advanced metering infrastructure (AMI) and automatic meter reading (AMR) technology realized via “smart meters”
    v) Wireline communication systems and technologies
    vi) Wireless technologies – ranging from Wi-Fi to GPRS/EDGE (for GSM) and EVDO/HSDPA for CDMA

We discuss next the role of each.

GIS Technology

Gis.com aptly defines GIS as “a system that integrates hardware, software, and data for capturing, managing, analyzing and displaying all forms of geographically referenced information.” GIS allows users to see, understand, query, and analyze data in the form of maps, charts, and reports, and thus visualize patterns, trends, and relationships that would not be obvious otherwise.

The integration of GIS technology into the back-office systems of utilities is helping operators gain new knowledge about their systems and operations that can be utilized for developing new solutions. What it enables is a move from a static environment to a real-time environment where different types of data/information can be incorporated to model the service network, e.g. weather information, truck tracking information, and sensor device information. For example, GIS mapping information is invaluable to improving infrastructure inspection (pipelines, power lines, water mains, street lights) and leak detection (water, gas) or outage detection/malfunction (power). It is also useful in network analysis (to know where things are) and asset management. Finally, it can be used to integrate weather, imagery, demographic, or municipal data to do better analytics, and improve maintenance and hence reliability. Once integrated with the back-end systems, this information can be made available to remote field staff, repair crew, operations centers, and dispatchers.

Communications Sof tware

Communications software uses innovative software technology and the Internet Protocol (IP) to unify a vast array of disparate (and often incompatible) communications devices and technologies in use in utilities. In the simplest terms, the software converts (typically) the voice signals from any communicating device (radio, mobile phone, PDA, PC, analog or digital telephones, IP phones) into IP packets that are transported across an IP network to other devices and users, and reconverted back to voice signals. While in the IP domain, there is considerable flexibility in how the traffic can be routed, switched, or bridged, allowing for interoperability across a wide range of devices, and for the creation of talk groups that map to functional teams, instead of an employee’s geographic location.

This allows superior emergency response and management, and facilitates business continuity–a key goal of utilities today. This is because utility workers can dialog with emergency responders, construction crews, other utility employees, and can do this across literally any type of communication device. Further, different groups can be bridged seamlessly using software, and conversations can also be recorded for instant playback. Such software also facilitates the gradual induction of advanced communications technology (PDAs, wireless devices, digital and IP phones, for example), while allowing for backward compatibility with existing systems, for a smooth transition over time. This is not only economical but also improves safety and provides substantial operational efficiencies.

Mobile Computing

Mobile computing applications and platforms are another important element being introduced in utilities today to improve the efficiency of field operations, and often change the way inspections and surveys are conducted/recorded. Using rugged mobile computing devices (with shock-resistant casings, longer batteries, and wireless communications capabilities) the mobile workforce is better connected to headquarters. Such computing applications play a key role in enabling real-time adjustment to crew schedules and repair activity in the face of unexpected service requests, and in the optimal selection of service routes using the global positioning system (GPS). This enables non-trivial savings in staff time and fuel, and also allows for higher numbers of service call completions. In addition, such platforms enable the field workforce to be given access to satellite and aerial photos identical to those available to staff in the back office. This allows instant coordination between employees to identify service areas that must be addressed first.

An excellent example of this is in utility vegetation management (UVM), where mobile workers can make real-time updates on vegetation growth around power lines, gas pipes, and/or water mains, and capture the GPS coordinates of a problem area instantly on their mobile computer. In a more advanced setting, the field force could even add images or digital photos of the area to their reports. As a result, the traditional manual and time-consuming process of a visual inspection involving multiple employees can be practically eliminated.

Advanced Metering Infrastructure (AMI) and Automatic Meter Reading (AMR)

The most promising change that is occurring in the utility industry is the induction of the so-called Advanced Metering Infrastructure (AMI), which involves a complete overhaul of the manner in which both the meters and the utility distribution networks are used, and the way in which communications with the end-customer are conducted. The concept of the “smart meter” includes meters that can not only measure usage (as is the case today), but are digital (rather than electro-mechanical), and have 2-way communications capability built in. As such, they can record usage patterns, receive time-of-use rates from the HQ, communicate measurements and information back to the HQ and also talk with smart devices in the home to regulate usage, and provide a host of useful information to the consumer as well. The communications may occur over plain old telephone lines (POTS), wireless networks (Wi-Fi or, in the future, Wi-MAX), or cellular/mobile networks. With new technology and larger utility vendors, the cost of two-way meters is coming down to the sub-$75 range, with the installation costs soon projected to be under $100. It is estimated that by the end of this year, almost 30M AMI meters may be in place in the U.S., growing to 40M meters by 2010, and 65M meters by 2012, which would represent a market penetration of over 40 percent.

The interest and significant push towards AMI infrastructure received impetus from the 2005 Federal Energy Policy Act, which supports utilities in providing “customers with time-based rates and the ability to receive and respond to electricity price signals”. Note that although AMI is most often discussed in the context of the electricity industry, there is nothing that precludes its application by the gas or water utility, and all of what we described above applies equally well to that infrastructure as well. The advantages of the AMI are many. For example, an AMI would allow:


    › Highly accurate load forecasting, thereby minimizing imbalances in the utility grid;
    › Improved outage detection and system reliability;
    › Development of effective load curtailment and demand-response and conservation initiatives to balance supply and demand;
    › Implementation of customized rates, based for example on the specific market, time-of-use, or system loading, and value-added services, such as outage notification and customized billing;
    › Improved asset utilization by matching distribution capacity to load, or by re-balancing network load to prevent overloading in certain segments, and improve the efficiency of existing infrastructure. This would reduce capital spending on new infrastructure; and
    › Facilitate faster service restoration, and proactive maintenance/repair of distribution equipment and facilities.

All of this will enable cheaper, highly versatile, and efficient network operations, resulting in measurable value for all stakeholders across the entire value chain of a utility’s operations.

Wireline Communications

Wireline communications systems have applications in conjunction with smart meter deployments described earlier. This is because, as outlined above, “smart meters” rely on 2-way communications between the utility HQ and the customer premises. This is facilitated by use of modems and phone lines, which allow for low-bit rate communications between the meter and the HQ, enabling the meter to report back customer usage in real-time, and to receive instructions from the HQ. This applies most often to electricity meters, but could work equally well for gas or water meters. (Note that for gas meters, regulation of the gas flow to the customer premises to control gas usage is more complex, because altering the pressure of the gas coming into the meter could make them unsafe and is typically not done at the present time. Similarly, there are a number of places in the country today, where no water meters at all are in use yet! [There is flat-rate pricing.] Clearly, meter installation would be a prerequisite to using the smart technologies discussed in this article.)

The other key area where wireline technologies are used is to offer new services to the utility end customer. One example of this is when gas or electric utilities who own, or have deployed, optical fiber along their pipelines or electric cables/poles (since they own “right-of-way” there) for their own communication needs, make that fiber available to provide community broadband Internet on a local or regional scale. This allows the utility to set up a subsidiary that functions as an Internet Service Provider (ISP), and directly offer its consumers high-speed Internet. Alternatively, the utility serves as a wholesale provider and leases its fiber lines to a third-party that operates a network/ISP on the utility’s infrastructure. In many cases, high-speed services are offered to Government organizations and corporates in need of connectivity.

Yet another way to utilize the wired infrastructure, at least in the power sector, is to use the utility’s own power lines and low-voltage distribution network to offer broadband-over-power line (BPL) communication. This is a wired communication technology where the power lines in the distribution system themselves are used for 2-way communications, and can enable both utility applications as well as high-speed data transfer.

On the one hand, BPL enables AMR, load control, and asset management (premise surveillance and substation and transformer monitoring, for example), saving the utility precious man hours, helping increase the efficiency of the distribution system, and providing pro-active monitoring and recovery from faults or imminent overloads. On the other hand, it provides high-speed Internet access, at up to 20 Mbps, to the power utility’s end-customers, enabling the utility (or a subsidiary acting as an ISP) to offer services such as VoIP, VoD, IPTV, and Internet gaming.

Wireless Technologies

Finally, wireless technologies are being utilized in a number of ways to achieve efficiencies in the modern utility. The simplest is to provide real-time wireless connectivity between the utility staff (field staff, repair crew, back-office staff), which, with appropriate communications software, allows for instant and effective communications, streamlining operations like UVM, infrastructure repair, emergency response, and on-site customer equipment repair. This includes technologies such as Wi-Fi, and 2nd and 3rd generation mobile wireless technologies, such as GPRS/EDGE and HSDPA for GSM and EVDO and HSDPA for CDMA.

Another very important use of wireless technologies in the utility industry is to combine them with the smart meters described earlier, and use wireless communications to report back usage statistics, system load, and other customer data to the utility headquarters. Again, this can be via a Wi-Fi mesh network, or via a GSM or CDMA mobile network, depending on the capability built into the smart meters. A related application is to facilitate communication between an in-home wireless sensing network and an (electric or gas) smart metering infrastructure to allow communications through the electric or gas meter into the home to control/regulate heavy appliances (e.g. refrigerators, washing machines, air-conditioners, dryers, ovens) to facilitate advanced capabilities, such as demand regulation, time-of-use pricing, and time-of-day load control. These sensing networks, called home-area-networks (HANs), are the “next-frontier” in AMI activities in the utility space. Although currently most popular in the context of the electric power industry, they are also being actively considered for the gas industry.

A third wireless technology that is used to auto-monitor the status of utility distribution networks and intermediate equipment (in the electricity, water, and gas utilities) are Radio-Frequency Identifier tags (or RFID tags). These devices are embedded in the distribution infrastructure (such as gas and water pipelines, along electric distribution poles and together with distribution equipment), and beam back important information on the safety, health/status, damage/wear of tanks, pipes, pipelines, voltage cables, transformers, and the like. This provides the utility with up-to-date information on its equipment without having to resort to costly field staff visits, saving both time and cost. They enable what is known as condition-based monitoring, and allow the utility to take proactive measures to ward off costly repairs and maintenance after the fact. The RFID tags work on batteries that last up to 10-12 years, and have a communication range of 100-125 meters. They can use multiple mobile communication frequencies to communicate.

Case Studies: Who is Using These Technologies?

A number of different utilities have used the technologies highlighted above to more effectively run their operations.

Montana-Dakota Utilities and GIS

The Montana-Dakota Utilities are one example of a utility that have made effective use of GIS technologies and their fiber optic infrastructure. They began deploying an enterprise GIS solutions for gas and electric data back in 1998, and in 2006 decided to maintain their fiber-optic system data in the GIS as well. The goals were to facilitate company-wide data access, improve system analysis through better tracing tools (for the fiber optic plant) and more efficient and timely system documentation, and more easily determine paths for dark fiber. They also wanted to model core features of the fiber-optic network, and model patch panels accurately. As a result, paper Map Books used by employees were replaced by ArcReader data accessible company-wide, and fiber-optic data available on OneCall maps, which allowed fiber availability tracing. Also, patch panel connectivity was made easier and significantly less error-prone.

Avista, which provides services in Northwestern U.S., began incorporating GIS technology in its gas division back in 1996, as an early adopter. Over time, the company has integrated advanced GIS into its operations, and derived substantial savings as evidenced by the following. The field-worker to dispatcher ratio was raised from 8:1 to 14:1. Further through real-time dispatch of daily orders, and home-starts for field personnel, the number of hours spent completing service orders was raised from 4.4 hours to 5.4 hours. More efficient workflow management resulted because the field staff could geographically (on their computers) see where they needed to go, the asset and related data they needed to work on field problems, and how to get to the site. This eliminated tremendous amounts of time-consuming paperwork and cumbersome processes, and reduced miles driven per job from 13 to 10, saving fuel, cost, and time.

PGE and Smart-Meters

PG&E (Pacific Gas and Electric) in Northern California and Southern Gas and Electric (SCE) in Southern California are among the two biggest utilities undertaking significant smart-meter deployment in the U.S. (Other significant deployments are by Florida Light and Power and Excel Energy.)

In July 2006, PG&E obtained approval from the California PUC to spend $1.7B on 10.3M smart meter (electric and gas) by 2012, and as of today has installed about 0.5M and activated 120K meters. The smart meters can provide accurate usage records by reading every 15 minutes (for commercial customers) to an hour (for residential customers), and will be a major contributor in reducing power requirements during critical or peak-use periods. In addition, these meters can speed up outage reporting, minimize electricity theft, provide visibility into patterns of energy use, and also enable electricity to a home/business to be turned off or on remotely, or for demand management, whereby the meter “dials-down” the consumer’s consumption to prevent outages. The meters will, eventually, also be able to communicate with smart thermostats and other energy management devices enabling them to be turned on when rates are most economical and preventing/minimizing use during peak industrial use periods. PG&E is using Echelon’s smart meters for its deployment.

Toronto Hydro

Another significant smart-meter deployment is happening in the province of Ontario, Canada, where the goal is to install 4.5M smart meters all across the province by 2010. In Ontario’s case, however, the six largest operators (Enersource Hydro, Horizon Utilities, Hydro Ottawa, Toronto Hydro-Electric, Hydro-One, and Veridian Connections) agreed on one meter vendor, Elster, for the job. Toronto Hydro is already using the meters to gather billing data and create models for time-of-use rates. The collected data will also be used for system planning, validating wholesale pricing, and revenue protection. At present, the system uses telephone lines for backhaul, but the eventual goal is to do that via a wireless mesh network.

A Look to The Future

In conclusion, the utility industry is in the throes of significant change. The adoption of new communications and software technologies that utilize wireless, wireline, fiber, and cable technologies to both streamline the utilities’ own operations by integrating the field and back-end operations and customer support and service. The advent of “smart” technologies will provide new capabilities to customers, utility companies, regulators, and the entire utility market–ranging from electricity, gas, to water companies worldwide, leading to the emergence over the next decade of the next-generation utility–which will use the latest advances in technology from communications to software to smart meters and appliances to enable a responsible and safe use of resources (gas, water, power) while meeting the growing demand for these resources, and cooperating much more closely and in real-time with their end customers.


About the Author:
Dr. Vishal Sharma is an international technology consultant at Metanoia, Inc. a high-end Bay-area telecommunications consultancy, with clients on four continents. He has 17+ years of experience in high-speed networks (IP, ATM), wireless/wireless network convergence, and system design.

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