For reasons not-so-difficult-to-understand, power utilities are extremely conservative when it comes to making their investment plans. AMI being the case in point, if you exclude the non-operational benefits from the equation, the Net Present Value comes out gravely negative for most business cases for most utilities. And for the non-operational benefits, which are primarily attainable through broader consumer load participation via market based demand response or direct load control, some of key enabling policy instruments are yet to be instituted owing to the lack of political will and organizational momentum.
It’s interesting to note that reliability gains are completely missed out from most AMI investment cases, with some notable exceptions (such as Connecticut Light & Power). In the base case, utilities can expect to save up to 10% of their outage restoration costs by leveraging the AMI events to reduce the average system interruption minutes (SAIDI). There are also achievable grid efficiencies delivered by business analytics with all the AMI and PMU (Phasor Measurement Unit) data.
At some point in the near future, utilities should sit back and perform a comprehensive value audit and recalibrate their transformation roadmaps. But, agreeably, that’s a broader subject.
