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In November of 1993, the Holyoke Gas & Electric Department (HG&E) in Holyoke, Massachusetts, issued two initial automatic meter reading (AMR) installation requests for proposals (RFPs) as part of its AMR pilot program. Recently, the utility issued an RFP to complete the first phase of the installation-3,000 AMR units, primarily in rural areas of West Holyoke and nearby Southampton.
Of HG&E's 28,000 gas and electric customers (with 33,000 meters installed), about 85 percent are residential. About 4,000 of these, or 12.5 percent, are considered hard-to-read or frequently-estimated meters. The utility is interested in placing AMR units in the majority of these hard-to-read locations, about 8 percent of which are businesses.
For the trial in Holyoke, HG&E received and evaluated nine bids, including specifications for four dial-inbound systems, two hybrids (PLC, radio frequency and telephone), one dial-outbound, one PLC and one cable television (CATV) system. Two successful pilots, one by American Innovations Ltd. and one by Reactel+MDAS, convinced the utility's management of the advantages and long-term feasibility of AMR implementation.
As a result, the HG&E staff reviewed the RFP process and developed another invitation to bid, this time for installation of its first 3,000 permanent AMR units. In the process, the staff refined the proposal process to the point where it can serve as a model for similar small, civic-minded utilities.
Implementation Strategy
Before bidding, HG&E defined its implementation strategy. The rural areas of Southampton and West Holyoke proved to be equipped with the most expensive-to-read meters within the service territory. In addition to the high mean time between reads, the area incurred higher vehicle costs. Severe weather, particularly in the winter months, also compounded expenses. HG&E decided which meters to install first by identifying those units
within the hard-to-read service territory that accounted for the highest meter reading costs. Careful evaluation of the types of customers, level of customer service required and actual cost to read each meter, rather than the overage cost of reading every meter, helps a utility realize the quickest pay-back on its investment. Replacing the most expensive-to-read or most difficult-to-access meters during the first phase of an installation is usually the most cost-effective deployment plan. This strategy is especially beneficial for utilities aiming to spread out capital investments over time.
The service territory in West Holyoke and Southampton accounts for five of HG&E's 85 meter reading routes. Future implementation strategies will move meter automation closer to the downtown district of the city.
HG&E had not committed to any particular technology or vendor, despite the successful pilot program results. By keeping the options open, management hopes to achieve the lowest cost structure and the best means for serving the customers.
Bid Component No. 1: AMR Unit
The first component of HG&E's RFP focuses on the AMR unit. Product features are among the utility's greatest considerations in the RFP and review process. Each feature is weighed according to its importance. This approach ensures that the utility will not be required to accept the minimum bid if the proposed system does not have the optimum level of features. The minimum requirements-monthly consumption of electricity, gas and water, level of security, and peak demand-are given the most weight in the evaluation.
Other features HG&E considers include remote reset demand upon billing read, time of use (TOU) data collection, real-time power outage reporting, remote connect and disconnect ability, load control, voltage monitoring detection, TOU and demand LCD display, home and business security monitoring, and distribution demand-side management.
Flexibility and expandability of the AMR device also are key issues in the decision-making process. In addition, the utility requests bids on maintenance, warranty, data administering and other vendor services.
Bid Component No. 2: Sensors
The second bid component is selection of the sensor. All different types of sensors that can be used in conjunction with electric, gas and water meters are evaluated. Staff evaluate a variety of sensors, such as pulse, encoder, KYZ, etc., taking into account the price per unit, and whether the sensor is compatible with the AMR unit selected. If a particular sensor is shown to be incompatible with the AMR device chosen, HG&E reserves the right to select the sensor from next lowest bid that could be successfully incorporated into the AMR.
Bid Component No. 3: Installation Services
A third area outlined in this utility's RFP is the installation of the AMR module and sensor retrofits. Although many AMR suppliers offer retrofit installations, HG&E makes this area competitive to meter shops equipped to retrofit third-party modules inventoried in its existing meter stock.
HG&E will collaborate on the retrofits with Holyoke Water Works (HWW), another Holyoke municipal utility. The bidder who wins the contract will install the AMR unit, all required cabling and equipment, and a new water meter with encoder. HG&E will install the gas and electric meters in the field while HWW will perform any necessary wiring and piping changes.
This type of collaboration is particularly important to vendors who plan to bid on all or any combination of these three bid areas. Small vendors who are not able to bid a large project on their own will be more likely to bid on jobs that outline a scope of work within their staffing capabilities. Utilities have more options available and can pick and choose based on the best technology fit and mix.
Expectations
In summary, HG&E splits its RFP into three bid areas: AMR unit, sensor and installation. This arrangement offers maximum savings on the entire project for the utility. It also requires that any vendor awarded a contract for one area must be willing to work with other suppliers or installers. All areas are evaluated in relation to others, i.e., the communication medium will govern the installation, or the unit will govern the type of sensor, or vice versa. HG&E also includes in its RFP a clear statement about system expectations and online software support from the vendor.
Holyoke Gas & Electric's experience can serve as be an example for other utilities just beginning the AMR decision-making and RFP process. Project leaders are able to compare product features, and those findings affect the award process significantly. The utility's planners carefully thought out the implementation strategy to maximize initial and ongoing investments through customizing three bid areas for a turnkey solution. The RFP's scope of work clearly defines vendor requirements and utility expectations. And, finally, HG&E keeps its options open to ensure utility and customer satisfaction. From such careful planning any utility can reap satisfying rewards and, thus, become the owner of a better AMR system that truly fits the needs of the utility and its customers.
Possible RFP Sections and Topics
- Introduction -- Describe the type of systems the utility is interested in reviewing and the services it expects to receive from the vendor. Do you want all new equipment? Make sure to include the request in this section, too, along with submission deadline information and a request for a list of the vendor's previous and current clients.
- Instructions to vendors -- Let vendors know exactly where, when and to whom they should send proposals and make it clear that the utility is not responsible for any costs incurred by preparing a proposal. Include a list of required sections so vendors arrange information similarly and utility reviewers can compare information more easily.
- Technical requirements -- List your specific expectations from the meter, data-collection method, software and support. Are your meters exposed to severe weather? Do you plan to go from hand-held to network meter reading in five years? Do you want billing to have direct access to collected meter data?
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- Implementation and training -- Ask vendors to describe, in detail, how or if they will teach utility workers to deploy, maintain and operate the AMR system. Make sure they include a timeline.
- System maintenance and support -- Find out the warranty period of all equipment, including software, as well as the support, maintenance and emergency services the vendor offers.
- Management reports -- Explain the types of meter-operation reports you want to receive, such as performance, missed read, tamper detection and communicaions-device reports.
- System pricing -- Ask for per-unit costs on meters, communications devices, software and optional accessories. Also find out whether the per-unit cost varies according to deployment rate and the amount of savings the system should provide.
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About the Authors: Jeffrey Brouillard is a distribution engineer with the City of Holyoke Gas & Electric Department, while Scott O'Donnell is the Northeast regional sales manager for American Innovations Ltd.
Editor's Note: This article appeared in the January 1997 AMRA News, a regular publication of the Automatic Meter Reading Association, and is reprinted here with permission. AMRA's office is located in Northbrook, Illinois: Tel. 847-480-9628; Fax. 847-480-9282.
Edited by Ian Lisk
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