Meter-to-cash: What it is, and why it's only the starting point for smart meter benefits

Published: Tue 26 Nov 2013
A blog entry by Smart Grid Watch

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Smart Grid Watch
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Meter-to-cash (M2C) is one of the most common business justifications for deploying smart meters and meter data management (MDM) platforms. But MDM is much more than just M2C. MDM can comprise several strategies that help utilities increase revenues and reduce costs, not just through the billing system.

"As a utility industry term, M2C is a big bucket," notes Chris King, Chief Regulatory Officer for eMeter, a Siemens business, which offers the EnergyIP MDM platform. "Vendors sell MDM as a solution for M2C -- but many utilities view M2C as a much larger assortment of functions and processes."

M2C is often used to distinguish billing from other uses of MDM uses -- such as processing outage data and connect/disconnect messages, or managing advanced metering infrastructure (AMI) devices. According to King, the basic elements of M2C typically include:

  • Receiving data from smart meters
  • Meter data storage
  • Cleaning up meter data, identifying inevitable missing data, and providing replacement data -- through validation, editing, and estimation (VEE)
  • Delivering meter data to the billing system -- usually storing the data and delivering it on the customer's billing date

Beyond M2C, utilities may deploy an interval billing and framing application to convert interval data to billing determinants for time-varying pricing. For time-of-use rates, this adds up the peak and off-peak interval data from smart meters and delivers those two values to the billing system.

"Viewed from this perspective, it's not really M2C, it's meter-to-bill." said King. "Cash means you're collecting something. But the way most people use this term, it has to do with improving the billing process."

MDM strategies also can help a utility's bottom line by reducing customer service costs, especially by eliminating customer confusion over missing bills. When MDM goes beyond basic M2C, it also can accelerate the billing process: when bills get sent out to customers sooner, utilities can get paid sooner, thus reducing capital carrying costs.

Of course, smart meters, MDM, and analytics for smart meter data offer many opportunities for utilities to save money or increase revenues -- but timing is everything. Billing-focused M2C benefits are the focus -- and sometimes the only functionality implemented -- at the beginning of a smart meter and MDM deployment. However, other benefits of smart meter data (such as improved monitoring and maintenance of distribution grid assets, reduced outages, and more efficient grid forecasting and planning) can start to be realized right from the earliest stages of installing these solutions, as long as the MDM platform supports these functions.

"The key is to implement smart meters as soon as possible, first in strategic locations, and also applying analytics right from the start," says Krishan Gupta, eMeter's Director of Product Management. He notes that these technologies can provide immediate benefits for integrating more renewable energy onto the grid, avoiding transformer overloading, and spotting energy theft.

"Don't treat analytics as an afterthought for your smart meter plan," says Gupta. "If you wait until you've implemented meter-to-cash and finished your multi-year installation of hundreds of thousands of meters before you add analytics, you'll have sacrificed substantial savings and operational benefits in the meantime."