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When is it best to use AMI versus AMR?

First, let us make sure that these acronyms are well defined. 

AMI means Advanced Metering Infrastructure.  It is a wireless network that connects smart meters to the headend platforms.  AMI meters use a radio signal to receive and transmit information.  They are part of a larger network where each meter sends signals to the Utility Operator’s meter data collection system, so they can get an accurate reading of your consumption usage.  RF meters only transmit for milliseconds and at levels that are about one hundred times below the threshold for Health Canada’s Safety Code 6 standards.  The more sophisticated AMI meters offer hourly intervals as well as additional useful features such as pressure monitoring, acoustic leak detection, and temperature monitoring.  A variety of critical alarm conditions are also flagged to the Operator in near real-time.

AMR means Automatic Meter Reading.  Unlike AMI, the AMR meter is not considered to be a Smart Meter.  Often, these meters are older, analog mechanical meters with basic means to communicate to a person who is a Meter Reader who is entering your property to electronically connect via a Touch Pad.  Alternately and more commonly, they do not need to access the property and can either walk-by or drive-by and read the meters from a short distance away such as from walking past the meter from the sidewalk or slowly driving past the meter from the roadway.  The meter measures the basic water consumption, typically with one value per day or per month.  The numbers on the analogue display click round as the water moves a paddle fitted inside the meter.  Newer AMR meters may offer a digital readout but are still limited in capability.

How to Choose Which is Best?

The rationale used to decide which technological approach is better for any municipality is based upon a few key metrics.  These metrics include, but are not limited to the following drivers:

  • Population count
  • Population density
  • Terrain challenges
  • Data usage
  • Customer service
  • Billing frequency
  • Being green

To deconstruct each of these criteria will help you to better understand the drivers in this decision process.

Figure 1: AMR vs AMI Functionalities

Population Count

The total number of endpoints is one of the key factors to guide your selection.  But it must be viewed in combination with the other factors as total customer population is misleading on its own. 

Now, we mean the total population of meters and not the population of people in the municipality.  As a basic metric for estimating the number of metering endpoints you can simply divide the human population by 2.5 to get a close approximation for the number of metering endpoints.   If your human population is 100,000 then your metering endpoints may be about 40,000.  Canada had an average household size of 2.51 people in 2021.  The indicator recorded a year-on-year decline of 0.8% in 2021.  So, this is just a basic rule of thumb approach.  The demographic composition of different Canadian communities can skew this estimation when multi-generational homes are common with different ethic pockets found across the country.  Obtaining the correct number of endpoints is always the best starting point.  The truth always lies in the numbers.

If the total number of endpoints is below 5,000, then AMR is likely more cost effective.  However, when the number of endpoints is over 10,000 then AMI is likely the better choice.  It is a grey area between 5,000 and 10,000 endpoints.

Population Density

Canada is a huge country geographically.  It is composed of many major urban centres surrounded by multiple suburban clusters.  But, from the big picture perspective, Canada is mostly classified as rural and remote.  These designations of urban, suburban, rural, and remote, as the Federal Governments definitions. 

Population density is the number of persons per square kilometre.

The large size of Canada’s north, which is not at present arable, and thus cannot support large human populations, significantly lowers the country’s carrying capacity.  In 2021, the population density of Canada was 4.2 people per square kilometre. 

  • Urban = An urban area has a population density of at least 1,000 persons per square kilometre, based on the current census population count.  This equates to about 400 hundred metering endpoints per square kilometre.
  • Suburban = We consider suburban areas to be those with population densities between 500 and 1,000 people/km2 or 200 to 400 metering endpoints per square kilometre.
  • Rural = Rural areas consist of open countryside with population densities less than 100 to 500 people per square kilometre and places with fewer than 2,500 people or 50 to 200 metering endpoints per square kilometre.
  • Remote = This classification is with areas of 10 to 100 meters per square kilometre.
  • Unserved = less than 10 meters per square kilometre.

Thus, AMI is ideal for urban and suburban, whereas AMR is betters suited for rural and remote areas.

Terrain Challenges

Even when considering population counts and endpoint density, we still must consider the terrain and the morphology.  The terrain is the shape of the landscape whereas the morphology is the things that sit upon the terrain, which can include trees and foliage, buildings and structures, bridges, and other infrastructure, and more.

When the terrain rolls up and down, it can adversely affect the ease of propagation for radio signals.  It can block the effective radio coverage and be used as an advantage to reuse spectrum near other gateways.

Canada’s terrain with hills, mountains, deep carving riverbeds, and other surface features can cause a major challenge to providing cost-effective radio coverage even if the density of endpoints is attractive for AMI.

Data Usage

It is said that data is the new gold standard.  By leveraging data, deeper insights and better and faster decision-making can result.  Data is especially important if the municipality purchases water, gas, and electricity from other suppliers such as regional authorities.  By providing feedback of consumption on an hourly basis the municipality and the resource provider can predict demand and adapt to changing requirements. 

In western Canada with severe drought conditions prevalent this year, the use of data to forecast demand has never been more critical.

One of the greatest advances in leveraging data is for billing and cost recovery.  With next generation digital metering the consumption is precise so every drop of water, every litre of gas and every kilowatt of electricity is accurately billed.

Metering Technology

The meters installed, whether they be legacy or new meters, will impact the AMI vs AMR strategy.  Even older, analog water meters with rotary dials can work if they are suitably equipped with the AWWA UI-1203 communication protocol connections. 

Newer digital water metering technology offers many benefits and more granular data compared to the older analog meters.  Added features and alarms can be communicated from the meter to the headend for action.

If the legacy water meters are older, perhaps greater than 10 years old, then the smart decision is to replace them as the AMI or AMR solution is implemented.  The real cost and logistical issue are the truck roll to the customer premise.  So, if you need to go to visit the customer to install the radio, it is wise to replace the meters too.  Normally meters are replaced between 15 to 20 years after initial installation anyway.  But the advantages of a digital water meter far outweigh the cost offset for early meter retirement.

Wire is the lowest cost aspect of an installation, and most problems exist with faulty connections.  So, it is smart to always change the wiring if applicable.

Customer Service

The greatest outcome from more granular data from AMI networks is for customer service.  When customers call into the Utility, the customer service agent can instantly access then AMI network to see real-time data and consumption for that customer on the telephone or at the counter.  This enhanced level of customer service drives far greater customer satisfaction and resolves issues on the spot instead of requiring follow up calls and wasting additional time of the agent to resolve issues with immediate closure.  Everyone wins.

When the data is real-time, a customer self-service portal can be added so customers can log in from anyplace, at anytime, on any device, to access their Utility bill and be aware of their consumption of the resources.

One of the chief benefits from this real-time situational awareness is that it allows the Operator to become proactive instead of always being reactive.  The Utility Operator can see problems before they become serious.  In the case of a water main break, the Acoustic Leak Detection will alarm and alert the Operator of leaks.  Even if the toilet flapper valve is jammed, wasting hundreds of litres per hour of clean fresh water, the Utility can provide enhanced services and alert the customer of this leak in their own home.  When customers leave for prolonged vacations to warmer climates, they can remotely monitor their homes for frozen pipes and other problems.

Billing Frequency

With more granular data comes the unique opportunity to change the billing frequency.  Most municipalities bill quarterly in Canada.  But this level of data can drive better cash flow with monthly billing.  There are several benefits to monthly billing if it is done correctly.

The most important benefit is improved cash flow and as the adage goes, “Cash is King”.  Bad debts are reduced, and total losses are less when billing is monthly.

Now, the standard reaction is about added postal costs.  But, today, many or even most of our credit card bills, cable bills, telephone bills, other utility bills, monthly bank statements, and stock trade and pension reports all come electronically via email and SMS, so using traditional mail is rather obsolete.  Yet, Utility Operators are still in the past on this issue.  Not every customer will want electronic delivery, but they are few.  So offsetting mail expenses is not the obstacle it once was for municipalities.

Another issue is prepaid bills.  Switching from quarterly to monthly prepaid does require some communications with the customers.  But it again helps the cash flow for the Municipality, so it is worth the one-time efforts to convert the existing prepaid customers over.

Being Green

Both mechanical and smart water meters support more responsible and sustainable water usage by enabling closer water usage monitoring for families and communities.  Due to consistent monitoring and real-time data transmission, NRW, or non-revenue water, resulting from a leak can be dramatically decreased.

Pumping water uses electricity.  So precisely pumping only the exact amount of water that you need saves electricity used to pump unused water. 

Cleansing water that is made ready for human consumption and that is never used due to NRW issues means that the water treatment plan prepared clean water and it gets wasted.  This also wastes chemicals, labour, and other resources used to purify water.

AMI does not need to have work trucks driving around the municipality to collect data, so AMI saves on fuel costs, insurance, maintenance, and reduces harmful exhaust emissions. 

When a conservation campaign is rolled out in association with the deployment of a smart water metering program, then the consumers save money too.  They lower their water bills and this in turn means reduced water production from the water treatment plant or to be purchased from the supplier.

Conclusions

Deploying either an AMI or AMR solution makes great economic sense for drive-by or fixed network depending upon your circumstances.  The idea of manually reading meters or the use of walk-by Touch Read meter reading is no longer viable.

Operations and maintenance (O&M) cost savings from remote billing and metering services is a major benefit stream for the AMI business case.  Operational efficiencies enhanced revenue collection and improved customer service and satisfaction.

Remote meter reading generates more timely, accurate bills, eliminating the need for manual truck rolls and labour to read meters, acoustic leak detection services, pressure monitoring, alarms, and enhanced remote diagnoses of many meter issues all contribute new features and benefits for AMI solutions.  Large-scale deployments and utilities with low customer densities or geographically dispersed territories had the greatest savings potential for AMR solutions.

Many utilities improved billing accuracy, reduced customer complaints, and used AMI data to resolve billing disputes faster.  AMI enables utilities to proactively identify and notify customers of unusual usage patterns in advance of bills.

Pre-pay billing plans helped customers to manage consumption and costs.  Several utilities

improved revenue collection and cost recovery by implementing pre-pay billing programs that can help customers avoid defaulting on bills.  A shift to monthly billing and away from quarterly billing provided better cash flow and reduced bad debts with lower losses.

New capabilities for tamper and theft detection through AMI deployments enhance revenue collection and lower costs.

Most importantly, AMI enables utilities to isolate water main breaks faster and dispatch repair crews more precisely, reducing service outage duration, limiting inconvenience, and reducing labour hours and truck rolls for loss of water diagnosis and restoration.

Utilities facing regular, severe weather events and storm induced I&I (Inflow and Infiltration) challenges have greater incentives for using AMI for water and storm water management than those that do not.

Full- and partial-scale implementations generally had a lower total cost per meter than pilot-scale projects because AMI communications network upgrades, data management system integration, and other fixed installation costs make up more than half of the total cost per meter on average.  These costs varied for each utility based on the scope of the project.

Communication networks upgrades designed to support additional smart metering functionalities beyond AMI raised the total cost for some utilities but increased the value of the investment and helped utilities set the stage for future distribution modernization.

Purchasing and enabling multiple smart meter features and integrating AMI with a larger number of systems can both raise the total AMI implementation cost, but also increase the value of benefits to support the business case.

The utility’s level of experience with AMI systems and the pre-project state of the existing communications, data management, and metering systems largely affected the overall cost.

Geographically dispersed utilities with low customer densities in some cases found a favorable business case for AMI from the operational savings alone.

Customer outreach and education contributed to overall cost varied by project.

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About the Author:

Michael Martin is the Vice President of Technology with Metercor Inc., a Smart Meter, IoT, and Smart City systems integrator based in Canada. He has more than 40 years of experience in systems design for applications that use broadband networks, optical fibre, wireless, and digital communications technologies. He is a business and technology consultant. He was a senior executive consultant for 15 years with IBM, where he worked in the GBS Global Center of Competency for Energy and Utilities and the GTS Global Center of Excellence for Energy and Utilities. He is a founding partner and President of MICAN Communications and before that was President of Comlink Systems Limited and Ensat Broadcast Services, Inc., both divisions of Cygnal Technologies Corporation (CYN: TSX). Martin served on the Board of Directors for TeraGo Inc (TGO: TSX) and on the Board of Directors for Avante Logixx Inc. (XX: TSX.V).  He has served as a Member, SCC ISO-IEC JTC 1/SC-41 – Internet of Things and related technologies, ISO – International Organization for Standardization, and as a member of the NIST SP 500-325 Fog Computing Conceptual Model, National Institute of Standards and Technology. He served on the Board of Governors of the University of Ontario Institute of Technology (UOIT) [now OntarioTech University] and on the Board of Advisers of five different Colleges in Ontario.  For 16 years he served on the Board of the Society of Motion Picture and Television Engineers (SMPTE), Toronto Section.  He holds three master’s degrees, in business (MBA), communication (MA), and education (MEd). As well, he has three undergraduate diplomas and five certifications in business, computer programming, internetworking, project management, media, photography, and communication technology. He has completed over 30 next generation MOOC continuous education in IoT, Cloud, AI and Cognitive systems, Blockchain, Agile, Big Data, Design Thinking, Security, Indigenous Canada awareness, and more.