UNLOCKING SMART GRID POTENTIAL: HOW SMART METERING-AS-A-SERVICE TRANSFORMS UTILITIES

The electric utility industry is undergoing a major transformation driven by the rise of renewable energy, distributed energy resources (DERs), electric vehicles, and the imperative to decarbonize. This transition requires a flexible, modernized grid infrastructure with increased visibility and control. Smart meters are a foundational technology to enable this transformation and unlock value for utilities and customers. However, the large upfront investments and operational complexities of managing a smart meter network can be prohibitive, especially for smaller utilities. This is where Smart Metering-as-a-Service (SaaS) comes in.

What is Smart Metering-as-a-Service?

Smart Metering-as-a-Service (SaaS) is an innovative model where a third-party service provider takes care of owning, operating, maintaining, and managing the smart meter infrastructure and meter data management, while the utility pays a subscription fee to access these services.

The core components delivered by the service provider in a SaaS model include:

• Procuring and installing advanced metering infrastructure (AMI) that allows two-way communication between the smart meter and utility
• Operating and maintaining the network infrastructure and IT systems
• Collecting, storing, and validating meter reads
• Providing meter data analytics and actionable intelligence to the utility

In essence, the utility outsources the capital expenditures and complex operational responsibilities associated with smart meters and instead consumes it as a service focused on delivering value.

Evolution of Smart Metering Models

The traditional model for smart meter rollouts has utilities making substantial capital investments to purchase smart meter equipment, software systems, and communications networks. They also take on the operational risks of managing the infrastructure lifecycle and data over the long term. This requires upfront budget allocation and technical expertise that can be challenging, especially for smaller utilities.

To overcome these challenges, some utilities have turned to outsourcing parts of their smart metering programs. For example, engaging contractors to install and maintain smart meter hardware while the utility retains ownership. Or using vendors for managing smart meter data collection and storage. While this helps alleviate costs and complexities, the utility still carries significant risks and responsibilities.

SaaS represents a growing evolution in smart metering models by providing a full outsourced metering operation. The service provider owns the end-to-end responsibilities from infrastructure to data management, while the utility pays for this as an ongoing operating expense. This better aligns costs with value realization and minimizes risks for the utility.

Drivers of Smart Metering-as-a-Service Adoption

Several key factors are making Smart Metering-as-a-Service an appealing choice for utilities:

Financial Benefits

• Conversion of upfront capital expenditures into ongoing operating expenses can improve cash flow and balance sheet metrics
• Avoidance of technology obsolescence risks associated with owning assets long-term in a rapidly changing environment
• Ability to scale meter deployments flexibly based on evolving business needs

Focus on Core Utility Operations

• Alleviates the utility's burden of running complex metering operations and data systems
• Allows utility personnel to dedicate more focus on core business objectives and customer programs

Accelerated Smart Meter Deployments

• Service providers can rapidly deploy large-scale “turnkey” smart metering programs
• Smoothens rollout process and project risks for utilities

Specialized Expertise

• Service providers build deep expertise in advanced metering infrastructure, data analytics, and cybersecurity
• Utilities can leverage this specialized expertise that may be challenging to develop in-house

Technology Innovation

• Service providers are incentivized to continuously upgrade technologies and introduce new capabilities over the service lifecycle
• Utilities can benefit from state-of-the-art solutions without owning the risks of technology development

Regulatory Support

• Some regulators support outsourced smart metering to enable smaller utilities to adopt advanced metering
• More consistent meter data collection and transparency from service providers satisfy regulatory oversight

Business Models for Smart Metering-as-a-Service

There are a few key business models emerging for Smart Metering-as-a-Service:

Meter Asset Ownership Model

In this model, the service provider owns the physical meter assets and communication networks installed at customer sites. The utility pays a fixed monthly fee per meter that covers costs of hardware, network communications, data collection, IT systems, field services, customer support, etc. The service agreement is typically 5–10 years to align with the useful life of assets.

Meter Services Provision Model

Here the utility retains ownership of the meter hardware but outsources network operations, data management, field services, and back-office software to the service provider for a recurring fee. This gives the utility more flexibility in meter procurement while still outsourcing complex operational aspects.

Data Analytics-as-a-Service

With this model, the core metering infrastructure remains with the utility, while advanced data analytics and intelligence are delivered by the service provider based on the utility's smart meter data. The service fee is based on unlocking value from data rather than physical meter/network management.

Hybrid Models

Some service providers offer hybrid solutions that combine elements of the above models to meet a utility's specific needs. For instance, managing existing meter assets owned by the utility while also upgrading parts of the infrastructure. The hybrid model provides more customization, but is operationally more complex.

The choice between these models depends on the utility's specific priorities, capabilities, regulatory environment, and stage of smart meter deployment. But in all cases, the fundamental benefit is leveraging a service provider's expertise to enhance the returns on investment from smart metering.

Unlocking the Full Potential of Smart Meter Investments

For utilities that have already deployed smart meters, SaaS opens up new opportunities to maximize the value from those assets by outsourcing ongoing operations and analytics:

• Improving data accuracy and transparency through specialized meter data management
• Applying advanced analytics and intelligence to drive savings, operational efficiency, and customer engagement
• Optimizing communications networks and integrating new smart grid technologies
• Accessing latest cybersecurity tools, threat monitoring, and vulnerability management
• Enabling rapid deployment of new smart meter-enabled programs and services

By leveraging the resources and capabilities of a service provider, utilities with existing smart meter infrastructure can overcome operational challenges, fill capability gaps, and stay on the cutting edge. This unlocks significantly more benefits from their technology investments compared to managing systems in-house.

Key Considerations for Utilizing Smart Metering-as-a-Service

The outsourced SaaS model can provide major advantages but also requires careful planning and coordination:

• Clearly Defined Service Requirements
  Utilities should clearly specify required service levels, performance metrics, and outcomes to ensure alignment with the provider.
• Technology Integration
  APIs and interfaces between the service provider's systems and utility IT systems need to be well-designed to enable seamless data sharing.
• Coordinated Deployments
  For new meter rollouts, tight project coordination is required between the utility and service provider teams during planning, field installations, testing, and cutover.
• Contractual Service Level Agreements (SLAs)
  Service levels for metrics like meter reading rates, network uptime, data accuracy, and response time to outages should be formalized.
• Cybersecurity and Data Protection
  Stringent security protections must be implemented by the service provider and regularly validated through audits.
• Privacy Safeguards
  Well-defined policies and controls should govern access to customer data to maintain privacy and build trust.
• Regular Reviews
  The partnership should include regular reviews and continuous improvement mechanisms to address evolving needs and adopt new innovations.

By addressing these aspects upfront, utilities can maximize the effectiveness and strategic value derived from Smart Metering-as-a-Service over both the short and long-term.

Takeaway

Smart Metering-as-a-Service represents an exciting evolution that can help utilities accelerate smart grid advancements and focus their resources on deriving maximum value for their customers and communities. By embracing SaaS models and partnerships with technology innovators, even smaller utilities and municipal power agencies can deploy world-class smart metering programs previously out of reach.

As service offerings mature and new capabilities like electric vehicle integration, distributed energy management, and grid analytics emerge from service providers, the SaaS model has the potential to become a new normal. Just as enterprises have rapidly migrated to cloud-based IT services, outsourced smart infrastructure promises to drive the digital transformation of power grids by turning advanced metering into an on-demand service. Utilities that proactively explore and adopt these models will gain a decisive competitive edge while also delivering on their public service mission in a rapidly changing environment.

If you have questions related to our smart meters and system solutions, don't hesitate to reach out.