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Utility Industry is a highly data intensive industry. Therefore Information Technology (IT) plays a key role in the functioning of the Utility in the areas of Asset Management and Customer Management. As Utilities are normally very large Enterprises, usage of Enterprise Resource Management Software Packages are widely prevalent.

For the purpose of the article we will restrict ourselves to the Electric Energy Utility Industry. The Utility Industry is either regulated or de-regulated. We can observe that, generally in countries which have developed economies and where there is not much of an energy deficit at present, the Utility Industry is de-regulated. In other countries it is mostly regulated.

De-regulation is characterised by competition in Energy Retail. De-regulation has introduced several market players such as:

Supplier – Commercial and Customer Care Service Provider

Distributor – Physical Infrastructure Provider for Energy Distribution

Meter Asset Provider – Metering Infrastructure Provider

Meter Reading Service Provider – Meter Reading Operations

The presence of several Market Players results in the un-avoidable large volume of data and information interactions between the different players.

Apart from this there is an increased volume of data due to the Real Time Pricing (RTP) tariffs. For handling the RTP tariffs, it is required to use interval meters which record consumption at regular intervals rather than once during every billing period. Typically the time intervals are 15 minutes, 30 minutes and one hour. The consumptions recorded at the various intervals needs to be multiplied with the prices prevailing at the corresponding intervals to arrive at the billing amount. Hence the data volume to be handled for billing processing is greatly increased. This is also one of the compelling reasons for the Utilities to go in for Smart Metering and Advanced Metering Infrastructure (AMI). The Utility companies are gearing up their IT Infrastructure to handle the increasing data.

Upgrading the IT infrastructure can only be only one part of the solution. It is need to be seen whether the data volume itself can be reduced in the first place without affecting the business objectives.

Electricity is a commodity which inherently is not possible to economically store on a large scale for a longer duration. So generation and consumption have to balance each other instantaneously. This balance is reflected by a parameter called Electricity Grid Frequency. It is generally maintained at 50 Hz or 60 Hz depending on the country. Whenever the generation tends to become more than the consumption the Frequency increases and whenever the consumption tends to become more than the generation the frequency reduces. Both supply side and demand side management are done to maintain the grid stability.

Electricity prices tend to be high when demand exceeds supply and price tends to be low when demand is lessthan supply. In other words, it means the price tends to be low when frequency is high (demand < supply) and price tends to be high when frequency is low (demand > supply).

In the electrical industry there is a component called frequency based relays (FBR). FBRs can send signals based on the frequency of electricity they are subjected to. The strategy is to in-build the FBRs to the meters. Based on the frequency, it can be made to record the consumption at different registers in the meter. The consumption is segregated based on frequency.  This method eliminates the need to record, store and process the large volume of interval meter readings and time dependent prices.

We will call this methodology of billing as Frequency Based Billing (FBB). Another advantage of this innovative strategy is that it will help greatly in the Demand Side Management (DSM). For example, if a consumer is not willing to pay a higher price but can take a load shedding, then the FBR in the meter for such a consumer can be set up such that the FBR signals the power supply to be cut whenever the frequency goes below a pre-defined level (in situations where demand > supply in the grid). This is especially suitable for loads where reliability of supply is less important than the price of supply. On the other side, when a consumer for whom reliability of supply is more important than the price the FBR signals can be set such that the power is supplied at all frequencies (during all times irrespective of demand supply scenario prevailing in the grid).

The reduction in data volume gives additional advantages such as reduction in the sizing of the IT infrastructure, especially the database size for handling energy data. It will also reduce the complexity of the billing software required. As the data to be processed is reduced, the bill processing speed is also increased. A simple billing system is easy and cost-effective to built, maintain and run. With a simpler system, the time and resources for customer care will also be reduced. Further it is envisaged that FBR based meters will place a significantly lesser load on the communication network built under the Advanced Metering Infrastructure as the data volume is very less in comparison to the interval meter data.

In summary, the much simpler Frequency Based Billing is a very good alternative to the complex Real Time Pricing which Utilities can adopt and benefit.