Guest Author – Jesse Berst, Smart Grid News

A small Texas pilot project may change how smaller utilities communicate with smart meters. The results show that cellular (or “public wireless”) will give RF Mesh a run for its money, at least with municipals and smaller utilities just now starting to make decisions about Smart Grid technology. (RF Mesh systems have been the choice for the vast majority of pilots and deployments in the U.S.)

Though this story sounds geeky and esoteric, it may have broad consequences throughout the industry. As we will see, the ramifications may be very different for small utilities than for large ones.

TNMP’s pilot results
Texas-New Mexico Power (TNMP), a subsidiary of PNM Resources, provides transmission and distribution services to 230,000 customers in 76 cities in the state of Texas. Last fall, it installed 10,000 smart meters in various parts of its service territory (including many different terrains). The meters were from GE and Elster. The communications modules were from SmartSynch. The cellular service was provided by AT&T. The system reads the meters at 15-minute intervals, provides remote connect and disconnect, and makes real-time notification of outages.

From where I sit analyzing the various Smart Grid technology options, these results address the two biggest issues haunting cellular: coverage and cost. (Use the comment form at the bottom or click on the nearby quick poll to let me know if you agree.)

The good news about coverage
The results, released on May 4, seem to put to rest the concerns that cellular would have coverage problems. In fact, the system achieved 99.96% success on average daily reads since last fall. Given that TNMP’s service territory includes desolate stretches in West Texas, rolling hill country and Gulf Coast areas, the results are impressive.

(Some of you may be wondering how cellular meters provide near 100% success, while cellular phones still suffer from spotty coverage. A typical smart meter communications module has a larger, more sophisticated antenna, and at least twice the power of a cell phone.)

The good news about cost
If you’ve been following the news, then you know that all the major cell phone carriers have dramatically lowered their pricing in the past 12 months. The TNMP folks told me they were paying roughly $.50 per meter per month. That figure includes a megabyte of data per month. Given that a meter read takes only a kilobyte, it’s obvious that the system has plenty of headroom for future applications.

Other concerns about cellular
The cellular carriers were late to the Smart Grid technology party, and many utilities are justifiably skeptical of their long-term intentions. In recent conversations with executives at several different carriers, I came away convinced that they are committed to machine-to-machine (M2M) communications as a major growth area; and to Smart Grid as one of the most important M2M vertical markets.

As a result, they are hard at work tailoring their offerings for the special needs of electric power utilities. The improvements, some here now and some due next year, include the ability to prioritize both voice and data. This will allow utilities to go to the head of the line in the event of a power outage or emergency.

Instantaneous provisioning
I spoke in person to Neil Walker, vice president of operations at TNMP. He was particularly impressed by the quick connection. “Once we plug it in, the module connects to the system within a minute or so, immediately becoming a live asset.” In some large systems, it can take a month or more after installation before the meter becomes live, Walker told me. In TNMP’s case, they were able to do remote connects and disconnects on the day of installation.

“When you build your own system, you go through a network optimization phase,” Walker explained. “When you use a public carrier, the network has already been optimized. In many ways, we are being subsidized by cell phone users.”

Why IOUs may stick with RF anyway
Despite the impressive results from this early pilot, many IOUs may still prefer the RF route, for both technical and financial reasons. On the technical side, larger utilities have the necessary communications expertise and staff; in addition, they have a strong preference for managing their own networks.

On the financial side, the cost of using a public network is treated as an operations expense. The cost of building your own custom network is treated as a capital expense. Investor-owned utilities have the potential to earn a regulated rate of return on capital expenses, hence their preference for that route.

What about the vendors?
It is still too early to understand the full implications for communications vendors. SmartSynch has the lead in communications modules that connect to the public carriers. If cellular catches on, some of its competitors may have to scramble to add that capability.

In talking to the cellular carriers themselves, they seem to have aspirations to eventually compete with ZigBee, allowing direct cellular connections to a variety of devices inside the home. That latter scenario seems unlikely in the next couple of years, but watch this space. With cellular carriers set to roll out next-generation technologies next year, and to manufacture hundreds of millions of cell phones with the new chips, prices could eventually come down so low that it will make financial sense to build a tiny cell receiver inside smart appliances.

Originally posted by Jesse Berst on Smart Grid News, May 5, 2010
http://www.smartgridnews.com/artman/publish/Technologies_Communications_News/Smart-Grid-Technology-Cellular-Emerges-As-Viable-Communications-Choice-2300.html

About the Guest Author – Jesse Berst, Smart Grid News
KEMAUtilityFuture.com is featuring guest posts from Jesse Berst, the Founding Editor of Smart Grid News—the sector’s oldest, largest and highest-ranked specialty smart grid website. Jesse is an internationally known technology and business analyst. He has authored or co-authored more than a dozen books on technology topics, written hundreds of articles for leading publications and keynoted dozens of business events in the U.S. and abroad. For more information visit: www.smartgridnews.com.