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Traditionally, most utilities in the US have deployed their smart gird projects using either RF (radio frequency) mesh or PLC (power line carrier) connectivity in the NAN (neighborhood area network), connecting clusters of meters to a local data concentrator, for backhaul to the utility’s head-end. TNMP (Texas-New Mexico Power Company), a subsidiary of PNM Resources and the fourth-largest electricity distribution company in the Texas, has chosen to deploy its smart grid using cellular network connectivity services from AT&T and a smart grid management platform from SmartSynch. ABI Research believes that when a complete picture of costs and benefits is formed, there is a strong argument for many utilities to use smart meters directly connected to the cellular network.

TNMP derives a number of benefits from its decision to utilize cellular connectivity for smart grid communications, which can be grouped broadly into two categories, financial and operational:
Financial: TNMP is capital-constrained, as are most utilities. TNMP found that the costs of hiring, training, and organizing the staff needed to plan, deploy, and manage a self-built smart grid communications network outweighed the lower initial equipment costs of a “typical” self-built network utilizing RF mesh or PLC compared to utilizing cellular radios. By utilizing AT&T’s network, the utility can invest capital on enhancement of energy delivery, rather than on communication technology deployment. Certainly, the highly fragmented character of TNMP’s service territory across Texas added to the technical and organizational challenge of deploying an RF mesh or PLC based network, as well.
Operational: TNMP benefits from having AT&T and SmartSynch focus on management of the communications network, leaving the utility free to focus on its core competency of energy transmission and delivery.
Cellular networks benefit from the massive scale and standards-based technology of the mobile services industry. AT&T is responsible for extending and upgrading their network, and the cost of doing so is amortized across the millions of mobile phone users, rather than solely borne by utility operations. TNMP believes it has been negatively impacted by using proprietary protocols in the past, and specifically wanted a modularized, extensible solution that eliminates stranded assets. Over the lifetime of the deployment, the utility feels this will be much more efficient.
In addition, TNMP views cellular network connectivity as inherently more robust and more secure than a self-built network. If the network were to be disrupted by natural disaster, for example, AT&T will take responsibility for quickly restoring connectivity. AT&T has long experience and deep expertise in securing mobile communications and can apply this to TNMP’s smart grid communications. Furthermore, due to the P2P nature of cellular communications, if one smart meter is compromised, the other smart meters in the system remain isolated from the threat; there are no utility-specific data concentrators at risk of being compromised.
Finally, available bandwidth is higher using a P2P cellular network rather than a shared RF mesh network or PLC. While high bandwidth is not a critical need for meter reading operations, TNMP anticipates that bandwidth needs will increase in the future as new applications are deployed on the smart grid. For example, the utility envisions public service announcements related to volatile weather conditions in Texas to be transmitted someday over the smart grid network into the home.