By Bob Heile, ZigBee Alliance

The potential benefits of advanced metering infrastructure (AMI) are myriad, from improving efficiency with automatic meter-reading to increasing visibility into distribution performance to improving electric system reliability through better monitoring and management. Ultimately, AMI may transform power consumption by giving consumers information and tools to respond to demand fluctuations in real time—enabling a far more efficient grid.

Many large utilities are now rolling out AMI systems in an effort to make these benefits a reality. But what does AMI mean for the thousands of smaller utilities across the United States?

For the most part, smaller utilities will realize the same AMI benefits as large power suppliers. There are, however, a few areas where smart metering could provide unique benefits to smaller utilities, especially those serving rural areas.

First, electrical reliability may be a more pressing problem in large, lightly populated geographic regions. Simply having the ability to pinpoint exactly when and where an outage has occurred could be a tremendous boon, allowing smaller utilities to improve service and use of operational resources. AMI would also allow smaller utilities to better support micro-generation and renewables.

While small utilities are well aware of these potential benefits, smart metering is still a novel technology. Many questions remain unresolved. Given this uncertainty and the substantial investment required to initiate and trial an AMI project, it is just not practical at this point for most small utilities to act as pioneers in this space. Rather, most are taking a wait-and-see approach, keeping an eye on the larger players to see how they answer these questions in first-generation AMI implementations.

Let's take a closer look at a few of those questions.

Planning for More Electric Vehicles

One of the biggest smart grid questions yet to be answered centers on electric vehicles.

In most cases, today's electricity distribution systems are designed to operate near capacity. Utilities don't typically design power grids with 50 percent headroom; margins of 10 percent to 15 percent are common. As a result, for a small neighborhood served by a single feeder, adding a single electric vehicle can have a significant impact—not to mention adding three or four or a dozen. In an unmanaged metering infrastructure, consumers plugging in several electric vehicles, each charging at six kilowatt hours, could quickly consume (or even exceed) the total available capacity of the local transformer or feeder, with not-so-pleasant consequences.

With industry analysts such as Pike Research projecting more than three million electric vehicles sold worldwide by 2015, this could present a serious problem. For small utilities in particular, it won't take very many cars plugged in at the wrong time at the wrong place to make a real mess.

To prevent these kinds of issues, utilities need to hash out the best management systems and controls for appropriately serving battery-powered vehicles. Smart meters will certainly play a central role in implementing these controls and managing this growing problem. Smaller utilities are closely watching early AMI rollouts in Texas and California to see how power suppliers address this and which types of controls and policies prove most effective.

Influencing Consumer Behavior

Consumer demand-shifting is a central smart grid value proposition—indeed, one of the main areas where power suppliers expect to realize value from their AMI investments. No one has yet answered the question of how to best implement demand-response services, however, nor which models will be most effective in actually slowing the growth in energy demand.

This is a question of psychology just as much as technology. Utilities need to move beyond asking how demand-response technologies will work and start asking how consumers will see the benefits of them. Indeed, this has been a key sticking point for some early smart grid trials that have not delivered the expected results. In some cases, utilities were so focused on implementing systems to provide information that they failed to properly explore how consumers would respond to that information.

Small utilities are watching early AMI projects intently to see whether they achieve anticipated changes in demand response and load reduction, and if not, why they don't. Which incentives will prove to be most effective at getting consumers to change their behavior? If consumers don't respond the way utilities hope, what will utilities do to address that? How much education is necessary to get consumers to understand and use demand-response systems, and how are utilities providing that education? None of these are technology questions, but they are all vital to the success of an AMI project.

Envisioning the Home Network

Understanding consumer psychology is essential, but there are many technical questions surrounding the home-area networks (HANs) that smart meters will serve which have yet to be resolved. While most utilities share a common vision of the role the home network will play in the larger AMI and smart grid infrastructure, no one is quite sure what HANs will ultimately look like, or which technologies they will employ.

For example, HANs could use a broad range of potential networking technologies: Bluetooth, power-line communication (PLC), ZigBee, WiFi, etc. Which is the best communication medium? Or will future HANs use a mix of technologies? At this point, there are no clear answers, and no clear standard.

There is still disagreement on some of the basic questions, like whether everything connected to the meter should be 100 percent Internet protocol (IP) all the way to the end device, or just be addressable by an IP-based system. Debate still rages around this question, with strong opinions on each side—the IP advocates stressing the flexibility and manageability of an all-IP world, and their opponents stressing potential issues with security, power and cost.

And, through all of these issues, utilities must, once again, keep the end-consumer top of mind: How can utilities assure that HAN technologies are completely seamless, so that everyone—not just the tech-savvy—can use them?

These questions remain far from resolved. Indeed, the HAN market in the United States today is characterized by much politicking and jockeying for position among technology providers. Clear standards must emerge before the manufacturing of HAN-capable appliances can really take off. Eventually, manufacturers will hash out all these questions, but as of now, the market has not spoken definitively. Most small utilities will continue to stay on the sidelines and observe until it does.

All of these questions represent fundamental challenges that anyone contemplating a smart grid deployment must navigate, and it will be fascinating to see how early AMI rollouts address them. But for smaller utilities, it just makes sense right now to let the larger players find the practical solutions (and take the lumps along the way).

By waiting for results from first-generation AMI implementations, smaller utilities can copy those techniques that are field-proven to be effective, develop a set of reliable best practices to emulate and solidify support. Ultimately, when the time comes to launch their AMI projects, they will be able to embark on them with greater confidence.

Bob Heile, a 30-year communications veteran, is chair and founding member of the IEEE 802.15 Working Group on WPANs, chairman of the ZigBee Alliance, co-chair of IEEE P2030 Smart Grid Communications Task Force and is a founding member of 802.11.