Demand Response Using Advanced Power Meters
Presented to:
“Electricity 2006”
November 15-17, 2006
Eilat, Israel
By:
Tom D. Tamarkin, CEO
USCL Corporation
2433 Garfield Avenue
Carmichael, CA 95608 USA
+1-916-482-2000
Issue:
As human requirements for critical natural resources threaten to exceed available production
capacities, global security can be best served by an energy strategy that includes conservation
as well as fuel diversity. The prudent use of utility commodities such as electricity, natural gas,
LPG, fuel oil, and water can be greatly enhanced through consumer education. The importance
of conservation thus becomes a part of a society’s value system.
The reaction of consumers toward the conditions of supply is termed Demand Response. Since
availability conditions vary constantly, a rational response is predicated on real-time information
that includes current rate, accumulated use and ongoing real-time consumption in monetary
terms.
In the United States, the Domenici-Barton Energy Policy Act of 2005 has created obligations for
both the Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC)
regarding Demand Response policy and action plans. There is an opportunity to create
conditions that will stimulate private sector innovation leading to the commercial availability of a
myriad of new products and services, thereby allowing consumers to manage their use of
energy more proficiently. A kilowatt saved has greater benefit than a kilowatt generated.
Background:
Demand Response (DR) may be accomplished in a variety of ways. For residential and small
business consumers, DR is often instituted on a voluntary basis. Consumers respond to various
real-time price and usage signals and then reduce their load. DR can also be evoked through a
utility in conjunction with local control equipment and the use of data telemetry Wide Area
Network (WAN) infrastructures. Voluntary Demand Response can take several forms.
Consumers may, as an example, replace older less efficient appliances with new highly efficient
ones. Consumers can also modulate their energy loads by shifting the time of day that certain
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loads are used and by generally being more conscious of wasteful use. The latter requires a
combination of enabling technology, real-time information, and economic incentives.
It is a well established fact that the process of providing feedback on consumption motivates
consumers to save energy through the reduced use of electricity, gas, water, and the like.
However, the body of evidence testifying to this is rarely acted upon in any systematic way.
Professor Sarah Darby, Environmental Change Institute, University of Oxford, England, points
out the fact that there are three types of feedback to domestic consumers.
1. real-time direct feedback within the consumers premise,
2. indirect feedback via billing (and perhaps Internet archive and presentation on a 24 hour
basis), and
3. inadvertent feedback as a by-product of technical, household or social changes.
Studies of the use of feedback over the past 25 years indicate that feedback has a significant
role to play in raising energy awareness and reducing consumption of the order of 10% to 20%
depending upon prevailing conditions. As Dr. Darby points out, “the highest savings – in the
region of 20% - were achieved by using a table-top interactive cost – and power consumption –
display unit; a smart card meter for prepayment of electricity and an indicator showing
cumulative cost of operating electric loads...”
Over the last several years, electronic interfaces have been developed using color LCD displays
and associated touch keypads to provide consumer information and feedback on real-time cost,
consumption, rate, and accumulated cost per period time. Typically, such devices operate in
conjunction with the power kWh meter using some type of bi-directional communications.
Wireless communication strategies at radio frequencies are preferred. In essence, a Local Area
Network (LAN) is formed which allows the display device to communicate with the power meter,
thereby providing access to real-time consumption information. Moreover, to the extent that the
power meter is a component in a utility Advanced Metering Infrastructure (AMI,) a LAN to WAN
interface is effectively provided which couples the supply and demand side, essentially in real
time. Thus, the consumer is provided with access to current rate cost information that may
involve a large number of varying tariffs including, but not limited to, time of use, peak demand,
class of service, dynamic or real-time pricing.
Other devices may also communicate over the consumer premises LAN. These can include
programmable communicating thermostats, as well as gas, fuel tank, and water meters. This
capability prompts the development and implementation of time or event dependent rate
structures in the natural gas and water utility sectors. Further, low-cost “appliance modules” can
monitor the individual use of power by higher load devices, provide this information to the
consumer, and control these loads either through consumer intervention and involvement or
automatically as a function of programmable hierarchies and limits at the display and control
location. As standards are implemented and consumers develop an awareness of this
emerging technology and its availability, appliance manufactures will be compelled by the
marketplace to include appropriate communication technologies into all of their new products.
It starts with the meter:
Effective Demand Response starts with the utility meter. In order to manage demand, the
energy load must be monitored and measured. Traditionally, this has been accomplished with
an electro-mechanical kWh (kilowatt-hour) meter, which measure the cumulative number of
kilowatt hours consumed by the ratepayer. These meters were designed and commercialized
when the electrical generation and distribution system emerged 75 years ago and have
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changed little since then. While they have served the utilities well, today’s requirements for
information and control by both the utility and ratepayers vastly exceed their technical
capabilities.
Today’s meter must be capable of data communications with both the utility and the ratepayer.
Data exchange between the meter and the utility should take place over a real-time bidirectional wide area network (WAN.) Communications between the meter and the ratepayer as
well as various in-premise control and measuring devices must take place over a local area
network (LAN.) The WAN and LAN should interface to allow for communications to take place
between the utility and the ratepayer and various control devices located within the ratepayer’s
premises. This interface may be thought of as a gateway within the meter.
Thus, the ratepayer is transformed into a customer having real-time current usage information in
monetary terms as well as accumulated usage information and current real-time rate
information.
Of equal importance is the access gained by the utility to any level of information it deems
appropriate throughout the distributed network of customers which may be integrated with
SCADA and Distribution Automation systems contributing greatly to reliability.
Such a meter must possess the following capabilities in order to fulfill the requirements imposed
by an increasing number of North American utilities:

Time of Use (TOU) rate structures. A minimum of 15-minute time interval data must be
processed and stored in the meter with 45 day archival within the meter.

Peak Demand or Class of Service rate structures. The meter must determine and
record the maximum peak demand of its load in each of the interval “bin” periods, and
store these values with 45 day archival within the meter. The meter must be capable of
“ratcheting down” the amount of power the meter will pass and require consumer
interaction to reset it if a maximum allowed load is exceeded.

Dynamic or Real Time Pricing. The meter must be capable of receiving real time cost of
power information through the Wide Area Network data telecommunications network and
transferring this information to the customer via an in-home information display device.
Further, the meter should be capable of performing the billing calculations internally
based on the current billing determinants which include the real time cost as well as
TOU and Peak Demand load information. This reduces network congestion, back office
processing and software complexity, and allows the implementation of Subscriber Side
Billing.

Critical Peak Pricing. Critical Peak Pricing and the various schemes associated with
advanced customer notification become a sub-set of the real time pricing methodologies
described above.

Wide Area Network Data Telecommunications. The meter must contain internal
electronic circuitry to interface with a data Wide Area Network to allow for the bidirectional transfer of data to and from the meter and utility back-office. Although an
effective AMI system may well employ multiple means of data back-haul including, but
not limited to, radio frequency, power line carrier, telephone, wide band cable, and
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cellular telephonics, the practical limitations imposed by the United States distribution
system involving limited numbers of customers per transformer and lack of a neutral or
Earth ground connection to the meter, dictate that the principal data interface to the
meter must be RF. This becomes increasingly important as the amount of information
transferred between the meter and utility increases as a result of incorporating new
revenue producing value added products and services.
The AMI data Wide Area Network should be structured to allow for the transfer of
customer service messaging, emergency notification and homeland security messaging,
emergency disconnect of electric, gas, and water services in the event of natural or man
made disasters, and service personnel data base and report transmittal.

Service Outage Reporting. Each meter should have sufficient non-interruptible power to
allow for the transmittal of service outage conditions including time stamping and meter
ID number to the utility.

Service Restoration Reporting. Upon service restoration, each meter should transmit a
time-stamped notification of the service restoration event along with the meter ID
number to the utility.

Theft of Power Reporting. Revenue diversion events and activities such as the shunting,
bypassing, or tampering of the meter should be time stamped and transmitted to the
utility.

Remote Service Connect & Disconnect. Each meter should support the optional internal
mounting and connection of a 2-pole 100-ampere relay or contactor. The meter should
include an integrated electronic interface to the relay and embedded firmware to allow
the relay to be switched from state to state by the utility through communications over
the data Wide Area Network. The associated electronics and control firmware should be
designed to support various prepayment options including on site Smart Card and overthe-network activation, as well as class of service or maximum load thresholds before
automatic shutoff of service. Additionally, an external control button must be provided
for final account activation by the customer prior to power restoration by the relay as a
safety precaution. This control may be mounted on the meter with external access, or it
may be incorporated in the in-home display unit.

Over Voltage and Under Voltage Reporting. Each meter should automatically record
and archive for 45 days the maximum and minimum voltage over a 500-millisecond
period in each interval time “bin.” Furthermore, the embedded firmware should trigger
the transmittal of a time-stamped notification to the utility in the event of a sustained over
voltage or under voltage in excess of a programmable threshold for a programmable
period. Ideally, the meter should monitor each leg of the incoming circuit with respect to
neutral as a function of the sinusoidal waveform phase relationship and distortion
monitoring.

Power Factor Monitoring and Reporting. Each meter should be capable of monitoring
the power factor or quality of each of the circuit lines with respect to the zero cross point
and recording statistically relevant deviations for each interval time bin and generate a
time-stamped transmittal of power factor data in the event programmable thresholds of
uncorrected power factor conditions occur. Through digital signature analysis, the meter
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should be capable of differentiating between distribution system related load factors
creating power factor changes and customer load conditions creating power factor
changes. The first set of information is of use to the utility for distribution system
performance monitoring and optimization, and the second set of data is of relevance to
the customer for preventative maintenance. The data may further be used as billing
determinates in Class of Service rate structures in which power factor is included.

Reverse Power (Net Metering) Measurement. The meter must be designed to measure
reverse power with the same degree of accuracy and parameters as in the forward
direction and to accumulate the Net Metering information for customer presentation and
billing determination.

Local Area Network Gateway. The meter must be designed as the principal node or
gateway in a wireless customer Local Area Network that can receive data from and
transmit data to other utility meters such as water, and natural or propane gas.
Sufficient data logging and processing hardware and embedded firmware should be
included to allow for the implementation of the same type of variable rate structures
defined above for electrical service with gas and water service. This need may not be
obvious at first glance, since the technology has not been available in the past to support
variable rate implementation such as TOU, peak demand, day of use, etc., for gas and
water service except in the case of large commercial and industrial users.
Implementation of such variable rate structures for water and gas service offers manifold
benefits to consumers, the respective utilities and most of all, the electrical utility, as both
gas and water require enormous amounts of electricity to pump the commodity through
their distribution systems and this use of electricity typically runs parallel to the critical
peak demand. Further, the cost of both water and gas is escalating and many areas
face peak demand limitations of both commodities.
Additionally, the customer's Local Area Network gateway is the interface to an in-home
information display panel as well as an in-home appliance and load monitoring and
control network.

Remote Programmability. The meter must be capable of being remotely programmed
and future updates of the embedded firmware comprising the real-time run system must
be capable of being downloaded over the Wide Area Network to insure that future
enhancements and upgrades may be cost effectively implemented without sending field
personnel to a customer's site.

Subscriber-Side Billing. The meter must contain ample memory and arithmetic
computational ability to calculate a consumer’s bill using all available tariffs including
time and event dependent tariffs within the meter. This greatly reduces wide area
network congestion and utility back-office processing requirements. In this instance,
only a minimal amount of data must be sent to and from the mater and utility in order for
the utility to generate bills based on complex rate structures.

Product Life Cycle, MTBF, and Environmental Considerations. The meter should be
designed to ensure a 20-year life cycle, a MTBF consistent with traditional electromechanical meters, and continuous operation at -40/+85 degree C temperatures. The
electronic and mechanical design must allow for long-term operation in sea coast areas
with high concentrations of sodium chloride and other salts in the air, while being
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generally immune from transient power events consistent with ANSI C-12.11 and other
relevant specifications.

Prepayment of Service. The meter must support pre-payment of service through the use
of a remotely programmed “Smart Card” as well as over the network.

In-home Information Display. A wireless in-home Graphic User Interface or information
display and control device must be provided with each Advanced Integrated Metrology
unit in order to enable the use of most of the above features. Communications between
the display and the Watt-hour meter must be wireless as opposed to power line carrier in
order to allow for the portability of the display and hence its use as an audit and
conservation management tool. The display must be reasonably large and in full color to
capture the attention of the customer. The screen displays must be nested in complexity
to allow for the device’s use by a wide spectrum of customers with different social
economic backgrounds, interests, and levels of patience. Screens could, for example,
consist of a simple blank screen varying in color to indicate either cost information or
usage information. They could otherwise be extremely complex to provide enormous
amounts of information to interested consumers. The screen design might be
entertaining or educational, depending on the focus group.
Discussion:
The Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC)
have been assigned key responsibilities under the Federal Energy Policy Act of 2005. These
include the development of a Demand Response policy as well as regional cooperation with
states to insure that local utility commissions and utilities take the proper steps to make enabling
technologies available to all consumers who desire the economic and societal benefits provided
by the various products and programs.
The management of any resource, including utility commodities and energy, requires
measurement and information. The key to effective consumer management of energy use and
conservation on a voluntary basis is energy use measurement, real-time feedback, rate, and
cost information.
The Federal Energy Policy Act requires that all utilities, irrespective of the jurisdiction of a state
commission, shall offer time-of-use pricing and the equipment necessary for implementation to
all customers of all classes who request it. The Act specifies time-of-use pricing. This is a
convenience, not a standard, that is based on previous technology deployed in the industry for
the last 30 years. Today, state-of-the-art technologies and emerging capabilities will expand the
type of rate tariffs that can be implemented significantly. New tariffs based on peak demand,
critical peak pricing, class of service, dynamic and real time pricing, as examples, can be easily
implemented for all classes of service. The DOE and FERC have been charged with the tasks
of determining what the technical possibilities are today, and the emerging trends that must be
compatible with any deployed system infrastructure for the next several decades.
A consumer owned or leased energy management system must be capable of communicating
bi-directionally with any power meter a utility may own or operate. Such a system could provide
the consumer with “power profiling information.” As an example, the in-premise display and
control device can measure the efficiency of the in-premise load devices and compare that
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consumption and cost with the cost of more energy efficient devices based on the user’s (or
family’s) routine. From this “power profile” for the house or office, the individual appliance
annual cost can be compared with the amount of power and cost were the consumer to replace
inefficient devices with efficient ones. The cost of new devices could be used to calculate the
cost of replacement and the length of time to payback. The monthly and annual cost of each
appliance can also be compared with the same use pattern, as well as the cost, if a “peak load
avoidance” algorithm is used to schedule certain appliance use, (e.g. air conditioner, washing
machine, clothes dryer, spa, pool pumps, etc.)
The private sector industry can grasp federal and state government initiatives to develop and
commercialize new products and services that can be sold by utilities and private contractors
and have significant impact of the reduction of peak demand and overall demand. However,
industry must be assured that the availability of this data and information to the consumer will be
guaranteed. The minimum requirement is that any advanced electricity meter installed under
the provision of the Energy Policy Act must contain a universal LAN to WAN interface. This
provision will provide the consumer the option to install a remote display in his residence or
place of business, either at the time the new meter is installed or in the future. Such installation
must be wireless and “plug & play.” This interface must comply with a set of open standards
and protocols. A useful analogy for this requirement is the adoption and promulgation of radio
spectrum allocation and modulation standards in the early days of radio by the Federal
Communications Commission. The appropriate procedure will stimulate the greatest degree of
innovation in the private sector for the commercialization of constantly evolving, more powerful,
and less expensive consumer tools.
Action Required:





Accelerated Depreciation by utilities should be granted for all advanced metering and
demand response programs. These were initially included in the Barton-Domenici
Energy Policy act but were dropped as part of efforts to reduce the overall cost of
implementation. Inclusion of this provision would provide significant increased energy
savings.
Develop national standards of advanced meter functionality and interoperability.
Direct the DOE Energy Star group to provide a certification on a new class of product;
notably in-premise energy monitoring and management products.
Encourage private industry, appliance manufacturers, metering companies, wide area
telecommunication network operators and data base management firms to cooperate
with Advanced Metering Infrastructure development and deployment.
Develop suggested cost recovery methods based on:

Customer “opt-in” purchase with long term payment.

Ratebase increase predicated on predefined operational and cost of power
benefits.
Summary:
As a matter of fundamental public policy based on available technology at the beginning of the
modern electric era and going back almost 100 years, ratepayers simply do not know how much
electricity they are buying, how much it is costing to operate various combinations of loads in
real time, and how much they have purchased to date from a beginning bill cycle, until they are
billed at the end of the billing cycle. This relates to the fact that the power meter device
indicates only accumulated energy use in engineering units not generally understood. The
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situation is further exacerbated by the fact that the meters are typically located in locations
separated from the living space. A primary goal of Federal and State regulators should be the
provision of tools to ratepayers that effectively transform the ratepayer into a decision-making
customer. Electricity, gas, water, and the like are the only commodities that consumers
purchase with absolutely no knowledge of real-time usage, accumulated cost, and related
pricing information. Abundant comparisons may be made to point-of-sale terminals at retail
store check-out counters that display quantity and price. Today’s gas stations provide electronic
displays showing the price of the selected fuel, the amount pumped up to the second, and the
total accumulated cost. Utility ratepayers do not have this information.
Energy conservation will become increasingly important in the years to come. The cost of fossil
fuel resources can and will necessarily rise as countries outside the United States step up their
demand. It must be stressed that fossil fuel reserves are finite, while industry experts generally
concur that we are decades away from any full-scale migration from fossil fuel to alternative
energy sources. Consideration must be paid not only to the reserves of low-sulfur coal, but also
to the cost of mining and transporting coal to utility generation stations using diesel fuel. The
introduction of real-time feedback to consumers through interactive displays can provide
practical management tools while creating the presence and awareness necessary to evoke a
cultural shift to environmentally friendly, conservation-oriented value systems. Although the
public expectation of politicians is to take immediate short-term steps to lower fuel and energy
costs, the continued use of fossil fuels inexorably enhances worldwide competition for finite
resources.
Government commissions need not be concerned with the specific technologies employed but
only with the basic functionality of the provision of this advanced meter technology and the local
to wide area interface. Generally speaking, this means a bi-directional or two-way data flow
from each individual power meter to an in-premise device that by definition constitutes a LAN.
From the standpoint of cost, this capability will have only a marginal impact on the overall meter
price. A further objective should be the provision of an open set of data structures and
communication protocols, such as those being proposed by the OpenAMI task force in
California. This will insure that the consumer will be able to purchase displays and energy
management products either from the utility, or alternatively from home improvement centers,
consumer electronics stores, and the like.
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