The Money Meter
An Editorial by David J. Smart
(This article is a summary of a paper presented to the 1998 South African Revenue Protection Association (SARPA) Conference at the Heritage Convention Centre, Johannesburg.)
"Metering means awareness"
What was then....
For the first three-quarters of this century, conventional electromechanical voltmeters, ammeters, and watt-hour meters dominated the monitoring of electrical power and energy. These meters perform their task satisfactorily, operate reliably, and have remained virtually unchanged for many years. Even today, electromechanical meters are the dominant measurement device on power systems, and Utilities continue to use and purchase them. However, there is a growing niche of applications where a more advanced device has advantages. This niche has fostered the development of the electronic meter. These electronic, microprocessor-based digital meters are now generally available. They have become affordable and their reliability has increased substantially by using automated manufacturing processes. The meter specifications have also been tightened as the effects of surges and lightning strikes have been addressed.
The person who reads the meter for the Utility, usually has convenient access to the familiar Ferraris meter. However, it is often not easy for the customer to access and read this same meter, as it is usually mounted outside the premises in a weatherproofed area. Reading the meter dials to obtain the kilowatt-hour value is somewhat confusing to the average customer. The concept of the kilowatt-hour also seems to have little bearing on daily life, because of the term's infrequent use.
....and what we have now!
Modern electronic components have paved the way for creating sophisticated electronic meters. Since metering systems are absolutely essential to a successful energy management process, consideration should be given to applying the latest in metering technology.
Changes in this technology has led to a number of prepayment products that automatically disconnect a customer's supply if pre-purchased electricity credits are exhausted. In past management structures, a method of billing the customer after electricity has been consumed, has generally been used to collect the revenue from the Utility's customers.
"If you can't meter it, you can't manage it"
This is the Two M rule introduced by WL Stebbins in his paper on Energy Monitoring and Metering Systems. Stebbins goes on to say,
"Meters by themselves do not save money, they only cost money to install and maintain".
The relevant benefits for the final consumer must be identified. This is the fundamental pre-requisite to define a concrete strategy for a successful metering system application. The quality of any solution should be verified practically with empirical studies done before and after the implementation of the new technology.
One key element in the metering system application process is the identification and evaluation of consumer characteristics that influence acceptance and responses to the chosen concept. Some of these characteristics are demographics, income, knowledge, awareness, attitude and motivation. External influences on the consumer have to do with fuel selection, appliance choice and equipment efficiency, economic conditions, energy prices, technologies, regulation and taxation.
Every Utility has its own unique tariff structure. A group of known tariff methods (algorithms) frequently used, includes Straight Line, Lifeline, Circuit Breaker, Quantum and Complex (e.g. Time of Use). These algorithms can be either Vending based or Meter based.
One-way or Two-way Token Transfers
Tokens for prepayment meters can be categorised as being either "One-way" or "Two-way". One-way tokens transfer credit and control information from the Utility's point of sale through to the meter, and the token can then usually be discarded.
A major drawback with One-way tokens applied to Meter based tariffs, is that the Utility cannot determine how many kilowatt-hours have been dispensed through the prepayment Electricity Dispensers. There is also no direct feedback that the tariff in the meter has changed. The Utility would have to visit the customer's premises to determine true consumption.
Two-way tokens generally require the customer to retain the token after the initial transfer of credit into the meter, and then to return the token to the point of sale for the next purchase. The follow-up purchase process includes reading the data stored by the meter from this returned token. This is done for statistical processing by the data management system.
Coding Standards for Tokens
Many coding methods have been used, from the simplest common value cards used in the early days of prepayment through to the most sophisticated "tokenless" vending solutions. Manufacturers of meters are continually innovating and their latest designs will usually improve on the previous metering products. This can be seen in the use of the latest manufacturing methods, the most popular (low cost) components, standardised hardware configurations and an increasing dependency on software designs to add product features.
However, the Utilities who use this metering technology are often concerned that they are going to be "locked in" to a particular manufacturer, and be subjected to the business strategies of that supplier. Therefore, one can classify coding methods into two clearly defined groups:
- Proprietary and private techniques specific to one or other manufacturer, or
- Public licensed methods that provide a clear and understandable approach that can be used by any capable manufacturer to produce a saleable product.
Payment and integrated home automation systems need the customer to pay for a commodity or service before its use. Various token technologies have emerged concurrently with the prepayment concept, and act as suitable interfaces between the Utility and the customer. Some of the common token media used include Coins, Magnetic Cards, Paper (Numeric Strings), Touch Disk ("Dallas Chip"), Plastic Keys (Memory "Keys"), Memory Cards, Smart Cards, Radio Frequency Carrier and Power Line Carrier.
The Birth of the Electronic Purse
Smart cards have been with us for about three decades, and right now product developments have positioned the smart card token to replace fundamental token technologies. The cost-benefit return on smart cards has finally positioned this token platform as a convenient and inexpensive alternative. Some typical smart card applications include:
- Payphones: Prepaid Cards
- Parking Management and Transportation
- Petroleum Retail
- Health Services
- Automatic Vending
- Banking and Retail
Banks are now moving forward in smart card payments through the use of the Electronic Purse, the ultimate step towards a cashless society.
The Electronic Purse is the next major step forward in smart card banking transactions. It is a rechargeable or disposable card containing electronic cash, used as a replacement for coins and small bills to pay for groceries, transport tickets, parking, laundromats, bookshops, libraries, canteens and taxis.
Several countries are currently implementing nationwide purse schemes while "closed communities", such as college campuses, are already creating totally cashless societies.
What Does the Future Hold?
Electronic Purses have sprung into prominence. The first national schemes have been launched, new technology has been developed and multitudes of applications have been introduced. Legislators are awakening. Already there are over about 1.8 billion prepayment cards in the world used each year for 14 billion transactions. However this is only a fraction of the full potential of prepayment cards, and usage is growing rapidly. Participants need to know:
- How large is the potential market?
- How can it be developed?
- How will the flow of funds work?
- Where are the revenue opportunities?
- Which will be the leading applications?
- Which technology is the most appropriate?
- What regulatory constraints are likely?
- What are the strengths and weaknesses of the propositions for consumers, retailers and providers?
- To what extent will prepayment cards replace cash, cheques and conventional cards?
There a need for in-depth studies before and after the implementation of Prepayment metering, to determine the true value added by metering systems through the use of prepayment technology. These studies should cover demographics, income, knowledge, awareness, attitude and the motivation of the customers.
Prepayment metering has the added advantage that it puts the customer in charge of his own usage and budgeting of electricity (the commodity) or service. He is able to keep tighter control of his budget and is able to tailor the commodity or service use to the circumstances at hand.
By 2001, over 100 billion transactions will be made using a smart card. Your card will enable you to manage your daily and professional life, from ordering food and theater tickets to controlling your health insurance or your finances via telephone, anywhere in the world. The chip can store all the information necessary to make tomorrow's paperless, cashless society secure and convenient, changing the way we live and do business.
A number of questions must be answered as the inevitable technological revolution spreads like wildfire, and ignites the imagination with new ideas and applications. To keep pace with sophisticated fraud techniques, the Electronic Purse application of smart cards will be the next convenience in that never ending quest for financial safety and security linked to customer care and satisfaction.
Prepayment metering has a definite and permanent place as an effective Revenue Management tool, and it is up to the manufacturers of Prepayment systems to provide acceptable Revenue Protection techniques and technologies for:
"The Money Meter".
David J. Smart, International Sales and Support Manager, Metering Division, Conlog (Pty) Limited, South Africa
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