By Donald Schlenger
AMR has been technologically available since before the mid-1970s. But even after 25 years, and an energy crisis, utility companies read only a small percentage of meters with this technology. Through the years, millions of electric, gas and water meters have gone unread, and utility managers have created work-arounds.
Though I recognize -- having been educated by the best engineers in the business -- that AMR encompasses some engineering subtleties, in a world filled with telephones (cellular, cordless and otherwise), garage-door openers, bicycle computers and numerous other technologies, AMR has never seemed like rocket science. How could something so straightforward be so elusive?
Historically, few utility managers have been able to justify AMR. It's still a problem today. Often, these managers missed the most important element: customer service. Steeped in a monopolistic culture, they didn't understand customer service the way employees of competitive customer-service providers -- hotels, for example -- did.
Customer service is intangible and, therefore, immeasurable. So the only basis for comparison between existing practices and AMR-based operations is tangible costs such as meter readers' salaries. Few utilities try to justify large-scale residential AMR based on customer service.
Department Managers Have Specific Goals
Consider this scenario. An industry observer separately interviews four utility managers about their needs.
The billing manager's objective is to get the bills out on time. Bills also must be accurate; erroneous bills cause plenty of problems, though the billing department staff rarely deals directly with customers who complain about questionable bills. Billing section analysts take the readings as provided, so if a reading is questionable, they request a reread or place a field-investigation service order. (Most field-service employees say the majority of rereads are unnecessary.) Meanwhile, utility managers measure the field-service section's performance by how many visits staff members can complete in a day, not by reducing the number of visits.
The customer-service manager says the department's staff deals principally with problems such as inaccurate or missed reads and questionable bills, which originate in other utility departments. The section's objective is to respond to customers quickly. If there's a question that can't be resolved on the telephone, customer-service representatives often create another service order. Every customer is treated fairly, so standardized procedures are entrenched. Customer service is measured by the number of calls handled per day and call-waiting times, not by reducing the number of calls that come in.
The meter-reading manager tries to maximize meter-reading productivity. He encourages meter readers to hurry, but also to be thorough and accurate. In many utilities, the underlying paradigm is that the department managers must watch and control meter readers. Meter readers need the meters to be in good condition, accessible and easy to read. However, most meter-reading managers are uncomfortable with the idea of AMR, except for in some particularly difficult meter-reading situations.
In the meter shop, the work is mostly mechanical maintenance. The manager's focus usually is on meter-shop productivity, or the number of meters serviced each year, rather than accuracy. Meters must be reliable, and the fewer makes and models the meter-shop manager has to deal with, the better. Meters typically are a commodity product. Meter shops are wary of new technologies, particularly those with parts that don't move.
Deregulation Spurs Improved Service
Because these managers deal with operations only within their respective departments, they lack a big-picture understanding of utility automation.
The managers don't appreciate the impact they have on other utility departments. Managers tend to optimize departmental activities by which their supervisors measure productivity, primarily because no one wants to reduce staff. But none of the managers has a broad, process-oriented perspective. And nowhere in these interviews do managers emphasize customer needs. For each of these individual mangers, AMR would be difficult to justify.
The paradox is that AMR is ultimately a customer-service tool, but few people ever try to justify an AMR system based on customer service. Instead, they focus only on savings from improved meter-reading processes and load management. Ironically, at utilities where AMR systems are installed, most benefits come from improved customer service.
Another irony is that it took deregulation to make utility-environment participants aware that they must provide service the way customers want it -- the way AMR can enable it. However, utility leaders are reluctant to invest in any expensive customer-oriented technology as long as there is a risk that they won't recover the cost in the rate base.
Maybe energy deregulation will ultimately generate increased competition, reduced prices, and evolving services and options. Hopefully, deregulation will be more than just the catalyst for a strategic financial chess match played by utilities with market-exaggerated equity, and AMR systems -- tools designed to improve customer service -- won't become financial pawns.
How can a utility manager justify AMR? That's the wrong question. Managers must put customers first. They should act like they own the whole utility, and must take care of every aspect of customer service.
Managers will have to work with other sections or departments to see the big picture. Then they must be imaginative. To paraphrase the Zen expression, 'When the manager is ready, the solution -- and its justification -- will appear.'
Donald Schlenger, based in Cedar Grove, N.J., is a managing partner of Cognyst Consulting L.L.C. His e-mail address is dschlenger@cognyst.com. Schlenger also is a member of AMRA's board of trustees and Publications Committee. This article originally appeared in AMRA News, a publication of AMRA.
AMRA is an international, nonprofit, membership organization founded in 1986 to address standardization, justification and deployment practices in the implementation of advanced metering technologies. For more information about AMRA, visit www.amra-intl.org or contact association headquarters at 60 Revere Drive, Suite 500, Northbrook, IL 60062, USA; phone, 847/480-9628; fax, 847/480-9282; e-mail, amra@amra-intl.org.
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