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With ever increasing energy costs, more regulatory compliance and industry consolidation, many utility industries are redesigning their business models to become more agile and responsive.

Utilities offering services and supplies for essential items like water, gas and electricity have operated from a very traditional business model. Typically the legacy billing system was also designed to handle only simple flat rate tariffs, based on meter data from manual readings on a monthly, quarterly or annual basis. This lack of variable pricing models and inefficient manual meter readings and printed billing has hindered the ability of utility suppliers to innovate their businesses.

Smart metering using machine to machine (M2M) connected services to create Smart Grids is seen as a key development.

Smart Grids involve utilities using billing applications that can handle automated meter readings based on near real-time usage. This information enables more variable charging strategies including higher peak time, dynamic pricing, time of use (TOU), and energy purchases from third party suppliers. Additionally many utilities see the Smart Grid eventually replacing petrol powered cars and petrol stations by providing nationwide access to electric vehicle charging and billing services.

Smart Meter billing is likely to be similar to mobile phone billing, with utilities adopting many of the pricing, brand strategies and customer engagement models used by mobile operators. As an example, Vodafone Global Enterprise is currently working with AMS, a leader in the deployment of smart metering and associated services in New Zealand to create a business model that includes data communications between each meter and the central data collection point. Vodafone's existing GPRS mobile network transmitted the metering data and a billing module was designed with the flexibility to provide billing information in the formats required by AMS.

Smart metering is smart business, by working closely with AMS and their other suppliers, Vodafone was able to provide a bespoke technical solution. The energy supplier benefitted by being more adaptive and agile and their consumers benefited from an increased level of service through more innovative pricing plans and transparent billing formats.

For further information on why smart metering is smart business, download the AMS case study.