Energy theft costs U.S. utilities billions of dollars a year in lost revenue, which makes finding and preventing it is a big business. Smart meters are a great tool for detecting this kind of energy loss and pilferage -- and Silver Spring Networks (SSNI) has millions of smart meters to put to that task.
Now all it needs is the software. On Wednesday, Silver Spring announced it was buying Detectent, a startup that’s built a broad range of applications for revenue assurance, non-technical loss, transformer monitoring and grid operations atop its core theft-detection platform.
Silver Spring said it would pay $12 million in cash for the privately funded company, and expects the acquisition to be accretive to revenues by next year. But it’s already working with Detectent on projects for some of its biggest utility customers, including Chicago’s Commonwealth Edison and California’s Sacramento Municipal Utility District, said Josh Roper, Silver Spring vice president of product management, in a Wednesday interview.
And while Detectent officially joined Silver Spring’s SilverLink partner program last year, “We’ve known them long before that,” he said. In fact, Detectent has been finding energy theft for a decade. The Escondido, Calif.-based company, founded in 2004, got its start with utilities like NSTAR and Consolidated Edison by crunching old-school monthly meter data, weather data and customer account information to better identify where power, gas or water was being misdirected.
“They have both non-AMI customers and AMI customers,” Roper said. “With the non-AMI customers, they’re a little bit more limited in what they can get -- monthly billing data, different algorithms and different visibility into consumption patterns.” But “with AMI data, it’s not just consumption, it’s events -- other things the AMI can pull in that can help them identify where theft may be occurring.”
Theft detection a top industry concern
Indeed, theft detection is one of the top applications being pitched by smart meter vendors and their data analytics partners. Deep-pocketed startup C3 Energy has highlighted the benefits of theft detection and prevention as a key value for its big-data analytics rollout with Exelon’s Baltimore Gas & Electric, for example. Smart meter vendors including Itron, Landis+Gyr and General Electric are all providing revenue protection as part of their forays into analytics.
Nor is Silver Spring the only company to acquire the software expertise to help detect energy theft. Two other examples include Oracle’s acquisition of utility data analytics startup DataRaker, and Sensus’ purchase of analytics startup Verdeeco.
At the same time, theft detection is just one of the business applications for the kind of analytics capabilities that Detectent has built up over the years, Roper said. “They have an application platform and different modules running on that platform,” he said.
At Commonwealth Edison, for example, Detectent is providing software to support the pre-deployment phase of the utility’s smart meter deployment, he said. That involves steps like finding out which old meters have been underbilling their customers, and correcting those bills before the meter is replaced. Otherwise, customers might blame the smart meter for increasing their bills, he noted.
ComEd is also using Detectent’s software to help make sure it’s meeting the performance metrics imposed by the Illinois state legislature as part of the deal that allowed the utility’s $2.6 billion smart grid plan to move forward, he said. ComEd must show steep reductions in inactive meters, estimated billing and non-technical losses, and Detectent’s software “provides a lot of visibility into the operations of meter to cashflow,” he said.
Pricing data is difficult to come by when it comes to utility analytics deployments, making it hard to tell how Detectent’s software stacks up against the competition. But last year we reported that Detectent won a contract with California municipal utility Glendale Water & Power by significantly underbidding competitors Oracle and C3.