Billing System and IT infrastructure

For the billing and IT infrastructure, Azerenerji required the contractor to provide for data collection and processing, parameterisation and network management. It must also control the network operability, and ensure data base management and centralised authorisation for access to the metering equipment. Moreover, the AMI system would need to enable consumption data validation and monitoring as required. The selected vendor would be required to support the integration of the AMI with Azerenerji’s central server and billing systems, whose system has the following mandatory support requirements:

38  Prepayment / post payment

 Accurate information to the billing system;  Applying flexible tariff plans

 Monitoring energy quality

 Event logs and remote management

 User friendly interface and support of Azerbaijani language  Detailed Enterprise Resource (ER) diagram of meter’s data base

 Adjusting the frequency of data storage and data transmission from software (min. 15 minutes).  New data groups establishments for the classification of the information within the groups as

per each feeder.

 Assign ID code for each meter or other device

 Create a new entry field in the data base for entry of new information.  Azerbaijani version of AMI system

 Store all information regarding the seal in the meter memory  Changes of meters and installation of new meters

 Detailed information about customers

 Transferring of subscriber’s debt to new meter and track debt’s payment process  Detailed breakdown of the reports on the feeder and transformers

 Possibility of reading selected meters simultaneously

 In case of network disconnection, meter memory should record the time of any intrusion as an electronic stamp.

Lastly, it was specified that all keypad meters should support and comply with the STS protocol. In terms of key functions, Azerenerji set out some specifications for:

 Prepayment  Remote reading

 Measuring data management  Remote control

 Alarms and events  Reporting

It also specified that the data management system must be Integra table with third parties’ Customer Relationship Management (CRM), Outage Management System (OMS) and Geographic Information System (GIS) if needed.

In analysing these specifications, the following comments can be made.

Based on the strategic requirements defined in section 1.2, a core finding is that the underlying goal of integrating the AMI/MDMS does not currently form part of a coherent strategy of improving Azerenerji’s service offering and collection efficiency.

39 Specifically, whereas any AMI and resulting MDMS should comprise clearly defined parts of a well- structured strategy, leading towards an integrated approach to consumption tracking and billing infrastructure, the pilot projects implemented by Azerenerji seem to be a mere attempt to evaluate vendor offerings within their own merits. For example:

 There is no evidence to show reduction in technical losses, however some evidence has been reported to show reduction in commercial losses in the pilot projects that were assessed by ITS.  The improvement of “receivables” compared to the already deployed “prepaid meters” is was

not actively addressed. ITS experts were not provided with any evidence in order to have clear picture of the direct benefits of the pilots on revenue collection.Of coarse the improvement of payments will be achieved in general as a by-product of any Smart Meter implementation.  Demand side (consumption profile) management is not currently taken into consideration

within the expected operations of the meters, which might lead to a missed opportunity. A main benefit of smart meter systems is that ability they offer to manage the timing of consumer demand for certain uses (such as water heaters and air conditioners), to limit demand at peak periods.

The experts consider that the lack of a clear vision for integration of AMI/MDMS infrastructure is a considerable impediment to the success of the system, which should be addressed with high priority by Azerenerji before further steps are taken.

To illustrate this point, the purchase of a couple (or thousands for that matter) of Point of Sale systems (POS) will not make a trading multi-store business better, if they are deployed in the absence of a strategy to integrate them into the overall supply chain and the ERP using a vision of what kind of data they want to collect and process.

Furthermore, while Smart Meters comprise the less “intelligent” part of any AMI and the MDMS part is the “heart and brains” of the overall solution, none of the manufacturers has installed, provisioned and reported on their MDMS solution. Thus, the INOGATE team was unable to assess in practical, hands-on terms whether or not the system(s) will deliver overall benefits to the operator. Only the documents presented by the manufacturers could be checked.

Similarly, while “common logic” would suggest the use of PLC technology for concentrating meter readings, at least to the next available transformer (as a concentration point), the experts were unable to explain why an extreme majority of the deployed Smart Meters were equipped with GSM/GPRS modules. GSM/GPRS is a mechanism which, if nothing else, introduces an unnecessary potential point of failure and cost into the whole deployment, together with a significant vagueness in terms of service availability and data collection responsibility. PLC systems that use Azerenerji’s own cables would not suffer these problems.

No specific information was submitted concerning the split of responsibilities regarding IT infrastructure utilization/sharing and billing intelligence handover (and associated revenue). Therefore this point has not been assessed.

40 Also no specific documents have been provided, to justify the benefits that involving an additional bank as a strategic partner are intended to bring to Azerenerji's existing collection mechanism. This existing mechanism (which includes banking and postal services) does not seem to suffer from any significant drawbacks.

In this respect both the integration of the GSM operators (in the current implementation scenario) and the inclusion of a bank at this earlier design stage, produce a significant feeling of discomfort concerning the expected goals and verifiable indicators of improvement of the whole process.