Leveraging Smart Meters to Improve Customer Satisfaction and Utility Operations

MemphisMemphis Light, Gas & Water is partnering with Honeywell Elster for the deployment of about 1 million smart meters by 2020. Since 2010, MLGW has been researching the benefits of smart meter technology. The utility began with a 1,000 meter smart grid demonstration pilot project from 2010-2012 and moved on in 2013 to a 60,000 meter project, with these efforts culminating in the partnership with Honeywell Elster.

“There are two primary drivers to MLGW’s pursuit of smart metering,” said Christopher Bieber, Vice President, Customer Service. “First, we want to enable customers to use consumption information to reduce their utility costs. Second, we want to use real-time system data to improve technical operations, supporting the delivery of highly reliable services in a cost-efficient manner.”

Smart Grid Demonstration
For the pilot demonstration project that ran from 2010 to 2012, MLGW recruited 1,800 volunteers by mail and installed 1,000 residential meters in several small towns across Shelby County. Customers received an electric smart meter with a built-in cellular modem, to replace their existing analog (dial-faced) meter.  Smart meters securely transmitted electricity usage data to MLGW each night.  Volunteers could view their smart meter data online through MLGW’s online My Account service and could adopt a Time-of-Use electric rate.  Half of the households also tested In-Home Displays.

Overall, the average participant utilized the information to take energy conservation steps to use 2.3% less electricity during the pilot, saving $42.12.  Time-of-Use participants had the largest impact, using 5.6% less electricity and saving an average $82.68. “This pilot project demonstrated that customers could achieve significant savings through advanced metering,” Chris Bieber said. “In addition, we learned that due to its spotty coverage, cellular communications would not be manageable for a system wide deployment.”

Phase 1
Electric Smart Meter Demonstration 2013-2014
Following the 1,000-meter smart grid demonstration project, MLGW moved on to a Phase 1 Smart Meter Demonstration, purchasing 60,000 residential electric, natural gas, and water smart meters for $10.2 million from Honeywell Elster [Honeywell acquired Elster in 2015]. MLGW selected a mesh network topology for a WiFi communications system. Of the 60,000 meters, 25,000 were electric meters, 21,000 were gas meters, and 14,000 were water meters. The electric meters serve as the “brains” of the system, collecting data from the gas and water meters, for transmission to the utility.

Meters were installed at approximately 24,000 homes over a 9-month period, along with a wireless mesh telecommunications network to support meter reading and two-way communications that enable meters to notify MLGW of potential problems.  While the earlier pilot distributed smart meters evenly among the ZIP codes in Shelby County, 80% of the Phase 1 meters were located in the city of Memphis and 20% were located outside of the city. Thirty days prior to the scheduled installation date, customers received a notification letter, explaining their ability to opt out of the project. About 3.5 percent of customers elected to opt out. For this phase of the demonstration, electric meter reads expanded from once per day to every 15 minutes. The utility can conduct such functions as remote connect/disconnect and set up pre-payment arrangements for the electric meters. Customers can view their electricity, gas and water usage through My Account as well as see an estimate of how much their impending bill will be.

Phase 1 delivered numerous immediate benefits, including:

  • Detection of water leaks at approximately one-third of customers sites, enabling quicker customer notification
  • Detection of voltage levels that alerted MLGW to inspect for potential problems before the customer was aware of an issue
  • Detection of meter tampering, which resulted in lower utility theft

Phase 2
Electric Smart Meter Full Deployment 2016-2020
In December 2015, the Memphis City Council voted to award a $228 million (with a $12 million contingency) contract to Honeywell Elster to supply and install about 1 million smart meters over the next five years for MLGW. Phase 2 of MLGW’s initiative includes installation of smart meters and telecommunications infrastructure for all customers served by MLGW.  While earlier efforts focused on residential customers, Phase 2 includes businesses and organizations as well, so that all customers can benefit from smart meter technology and the enhanced services it enables.  Preliminary plans are to install the telecommunications network across Shelby County in the first 18 months of the project and to begin smart meter installation by the second quarter of 2016.  Customers will receive notification by mail about 30 days before installers are scheduled to work in their area.  At that time, customers will have the ability to opt out of the installation without being required to pay an opt-out fee.

According to Chris Bieber, the current priority for Phase 2 is for Honeywell Elster to expand the WiFi infrastructure from supporting two-way communications with 25,000 smart electric meters in the system to supporting up to 1 million meters. “We expect the communications build-out to be complete by the end of 2017,” Bieber said. “Then, averaging 50,000 meters installed per quarter, the system will be fully operational by December 31, 2020, enabling MLGW to fulfill its smart meter vision.”

Smart Meter Vision
MLGW’s vision is to deliver the operational and customer service benefits of smart meter technology to all MLGW customers:

  • Share information with customers about their electricity, natural gas and water usagePromoting conservation and cost savings
    • Offer customers voluntary dynamic rate and billing options (Time of Use, PrePay)
  • Automate system monitoring and outage reporting
    • Improving MLGW’s ability to identify outage locations, deploy personnel, share service restoration information with customers, and restore service faster
  • Minimize transmission and distribution losses
  • Reduce labor and transportation costs
  • Reduce utility theft
  • Improve safety and security
  • Virtually eliminate estimated readings
  • Maintain infrastructure for offering new, innovative services in the future

The benefits to customers include:

  • Reduced truck rolls which shortens response time and eliminates additional neighborhood traffic
    • Most electric meters can be remotely connected and disconnected, eliminating truck services orders
  • Reduced fees
    • Lower fees for utility service connection
    • No fee for electric service reconnection
  • Faster service
    • 24/7 electric service reconnection
  • Pre-pay option
  • No deposits
  • No late fees
  • No electric reconnection fee
  • 24/7 payment and service reconnection
  • Pay off existing account balance over time while maintaining service connection (debt recovery)

Honeywell Elster Logo SmallSelection of Honeywell Elster
For selecting the Phase 2 full deployment smart metering vendor, MLGW received five proposals and invited three vendors to make presentations. MLGW selected Honeywell Elster (then Elster Solutions) based on the company’s scope of work, experience, and cost. MLGW signed with Honeywell Elster a 5-year contract for $228 million.

“Our experience to date with Honeywell Elster has been absolutely terrific,” said Chris Bieber. “The technology works very well, with a 99.5% successful meter reading rate. Plus, their personnel are well aware our community is monitoring this project with great interest. Any time we call with a question or request for support, the Honeywell Elster team responds immediately and effectively. We are very pleased with the level of service and the pace of the deployment. We look forward to completing this project with Honeywell Elster and to all of the advantages it will offer our organization and our customers.”

MLGW Smarat GridElster Meter 





Smart Grid is a broad term used to describe upgrades that enhance the capabilities of the electric grid.  These technology upgrades are necessary to bring new technology—and benefits like automatic outage notification and system operations monitoring—to an electric grid that was constructed more than fifty years agoSmart meters with two-way communications talk back and forth with the utility through secure, programmed commands. At MLGW, this means sending meter readings daily, automatically reporting power outages and tamper alerts as they occur, confirming power restoration, notifying MLGW of water leaks, and enabling MLGW to connect and disconnect electric service remotely.

For more information
Christopher Bieber
Vice President, Customer Service
Memphis Light, Gas and Water
220 S. Main, Memphis, TN 38103-3917

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