I just want to amplify what Mike just said about the difference between AMR and AMI, and why you, the non-energy-professional, should care. Over the past couple of decades, some utilities have been putting in new meters with AMR capabilities when they’ve had to replace meters. AMR meters are only capable of one-way communication; they digitally communicate your usage to the utility, often to a meter-reader in a truck driving down your street. AMI allows true two-way digital information flow, so that the utility can send you information as well as receiving information from you. Furthermore, AMI can take advantage of the native communication capabilities of electricity wires, or it can use a broadband connection that you already have, to capture, aggregate, analyze, and respond to those data remotely.
AMR was all about reducing meter reading costs to the utility, which in turn should contribute to lower retail rates to residential customers. AMI, however, promises more. It offers such deep, broad, granular communication capabilities that there are many ways that utilities can achieve lowers costs with AMI. But it also opens up opportunities to offer different, novel, custom value propositions to different customers. AMI enables product differentiation, particularly through differential pricing of electricity use across time and by volume. As a communication service, it also can be bundled with other services that are valuable to homeowners (such as security, entertainment, etc.).
Now the question is twofold: 1. Can utilities in states without retail competition come up with differentiated, bundled products that appeal to residential customers, and in states with retail competition, can the retailers do it? 2. What differentiated, bundled products will appeal to residential customers? Will they buy them?
This is yet another example of why we should care about infrastructure questions that we routinely take for granted.