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Sempra Finds RFID Energizing Its Revenue
The company's utilities group expects to save money by improving its ability to monitor the installation of gas meters.
May 02, 2007—Sempra Energy is expecting to reap a return on its $2 million-plus RFID investment in a little more than three years. For a company accustomed to getting payback on technology initiatives in about five years, "this is pretty darn good," said Terry Mohn, technology strategist for Sempra's utilities group, at this week's RFID Journal LIVE! 2007 conference in Orlando, Fla.
The group consists of Southern California Gas Co. and San Diego Gas & Electric, and provides service to business and residential customers within a 25,000-square-mile region. The company is employing passive RFID tags to track gas meters being received from Elster American Meter, a manufacturer in Nebraska City, Neb. The system tracks the meters as they arrive at Sempra's warehouse in Pico Rivera, Calif., near Los Angeles, then are transported to various distribution depots and ultimately placed at customers' sites.
The RFID technology includes EPC Gen 2 UHF tags, interrogator portals and handheld readers. It is expected to help Sempra Energy—which reported nearly $12 billion in revenues for 2006—to save money by reducing the number of gas meters unaccounted for due to installations either mistakenly recorded or not recorded at all. The group's two utility companies have more than 100 years' experience combined, Mohn said, adding that "a lot of the processes are the same processes we've been using for the last 50 to 80 years." These include a number of manual, labor-intensive steps. For example, every gas meter is shipped with a piece of paper that travels with that meter from receipt to installation. When the meters are installed at customer sites, technicians are supposed to record each meter's ID number on the papers.
"Sometimes," Mohn explained, "they write those numbers in ink on their hands, because the piece of paper is back in the truck, and then they transfer that number to the paperwork later. Errors are sometimes made." In fact, he noted, in a 2003 study of the meter-installation process for commercial and industrial customers, Sempra determined that it was losing about $1 million in expected revenue because the installation of approximately 320 meters had not been recorded.
"We want to reduce loss of revenue and make our inventory more visible," Mohn noted, enabling Sempra to monitor which items are at the warehouse, at each distribution depot and even in each delivery truck. In addition, greater visibility could help prevent employees at the distribution depots from hoarding special-purpose meters—a practice that has caused Sempra to order more than it actually needed.
Sempra began investigating and planning for RFID about two and a half years ago. After evaluating numerous tags and conducting tag placement tests, the firm began an RFID pilot at the Pico Rivera warehouse and two distribution depots. Conducted at the end of 2006, the pilot incorporated a ruggedized portal at the warehouse and depots, as well as handheld interrogators used by the technicians installing the meters at customer sites. Sempra spent about $1 million on the pilot, Mohn told the audience, including installation of new Wi-Fi hardware, which the company is using to network the readers in the depots and warehouse.
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