Automatic meter reading

August 2002

Changing technology is constantly making a difference in our industry. One that we have been monitoring for the past several years is technology related to meter reading. Various types of automated meter reading (AMR) have been developed and refined over this period of time.

As a utility that serves predominantly rural areas, we are most interested in AMR technology that operates over our existing power lines. Since a large share of our existing meters are located away from buildings, a power line carrier system has definite advantages over a telephone-based system. As often is the case, capital cost of a suitable system is of most concern.

An AMR system capable of reading all of Nodak’s meters would cost the cooperative roughly $4.5 million. Since this type of equipment becomes obsolete relatively soon, we would amortize the cost over a period no longer than 10 years. Even with low-cost financing, the annual cost to purchase this equipment is significantly high.

With an AMR metering system, we would have offsetting savings in our daily operations compared to our present meter reading methods. We would eliminate the need for meter readers, which now physically read about one-third of our meters. With automated meter reading, data would not have to be entered manually into a computer, and more accurate data would translate into less errors and subsequent corrections. Both of these would result in less labor needed for our billing department.

Even though savings can be identified with an automated meter reading system, the savings are not large enough to offset the capital costs associated with the original investment of equipment. The net cost of providing service and obtaining a meter reading would increase, not decrease, with an automated meter reading system.

Recently, we surveyed a random sample of our existing customers about automated meter reading. First, these people were asked if they would like us to read their meters with an automated system. No mention was made of cost to do this. A total of 62% of those questioned said we should either definitely (14%), probably (23%), or maybe (25%) install an automated meter reading system. After the people were told there would be an additional cost to the customer of roughly $2.00/meter/month, the support fell from 62% to 38%. Only 8% of those surveyed said we should definitely install an automated meter reading system once they were aware of the added cost.

With this information, there are no plans to purchase and install an automated meter reading system at this time. We will continue to monitor the progress and cost of technology in this area. Hopefully, the cost will be reduced with time. That has been the trend with many electronic devices. In the meantime, we will ask most of our rural customers to continue to read their own meter and submit the meter reading when they pay their power bill for the previous month.