Smart Metering’s True Value

According to a report released last year by market analysis firm MicroMarket Monitor, the North American smart metering market is estimated to grow to a nearly $9 billion industry by 2018. It?s another example of cities reinvesting in infrastructure, as well as a push toward joining the ?smart grid,? the go-to term to describe the growing automation of utility operations streamlined on a digital platform.

It?s no secret that water utilities? use of Automated Meter Reading (AMR) and its overall Advanced Metering Infrastructure (AMI) has been a significant part of the shift to smart grid operations. The technology is aimed at measuring water faster and more accurately, reducing non-revenue water, determining leak areas and allowing better decision making about distribution system management. As innovative as it sounds, there are questions.

How do utilities know what kind of smart metering technology is right for its system? What challenges come with it? And most importantly, is it actually something that saves money in the long term? We invited a panel of industry experts to weigh in from both the manufacturer and utility perspective in our 2015 AMR/AMI Roundtable. The participants polled are Kristie Anderson, Product Marketing Manager, Badger Meter; Bob Fink, Meter Foreman, City of Greenfield, Ind.; Dave Hanes, Director of Strategic Marketing, Neptune Technology Group; and Tim Schwartz, Product Manager, Master Meter, Inc.


Why is it important for a utility to be able to measure its water accurately?

Kristie Anderson, Badger Meter: Utilities are under increasing pressure to increase operational efficiencies, minimize costs, and, in many cases, demonstrate effective water conservation practices. Addressing these issues means that utilities cannot afford to ignore water loss or lost revenue. In order to manage any resource, that resource must first be measured. Intuitive management of water resources requires insight into how much water is being used and where. Leaks represent a significant portion of unaccounted water use and very often manifest at low flows. Highly accurate, high-resolution metering technologies are particularly suited to identifying this type of flow so that leaks can be addressed, stemming the loss of water.

To accurately bill for water consumption, a utility must be able to accurately measure water consumption. This is important because, even at low flows, inaccuracies over time can add up, representing a significant portion of total water use. Over time then, inaccuracies in measurement can result in significant inaccuracies in billing and lost revenue. Measurement accuracy is also essential to ensure that costs associated with the consumption of water are distributed fairly amongst the consumers of that resource.??

Bob Fink, City of Greenfield: Accurately measuring water consumption is essential to our revenue collection and to providing reliable service to our customers. Inaccurate measurement can lead to under-charging a customer and losing revenue or unfairly overbilling a customer and hindering customer service. In addition, measuring water accurately is an important part of water conservation. In order to conserve water, customers must know how much they are using.

Dave Hanes, Neptune: Equity. Sustainability. Accountability. Water metering is primarily about equity ? as a consumer, you pay for the water you use and the wastewater you generate. Accurate meters make sure that people pay their fair share. Since water billing is typically the utility?s primary revenue source, accurate metering supports the sustainable management of the utility. More and more, water meters do more than just measure consumption. They can provide leak flow, no flow, and reverse flow indication. Essentially, water meters are now smart sensors. And, as smart sensors, they can help improve the accountability of the utility and the consumer in their use of water.

Tim Schwartz, Master Meter: Aside from the obvious economic reasons in revenue to better account for every drop of water, there are social and environmental benefits. By pulling trucks off the road, there is a reduction in greenhouse gas emissions and a potential reduction in liability across the workforce. Also, water is a scarce resource, and through AMI, utilities can be better stewards of this finite resource.

How do water utilities know what kind of AMR/AMI technology is right for its system?

Anderson: There are many factors a utility will want to consider in determining what kind of technology is right for its system. In addition to the traditional AMR/AMI technology, there is a new type of solution, called a managed solution featuring Advanced Metering Analytics (AMA), in which a solutions provider hosts meter reading data management software online and installs and maintains data collection equipment, allowing the utility to remove itself from the responsibility of installation and maintenance of everything except the meters and endpoints.

Some of the bigger questions a utility will want to address in selecting a technology include: What data is required for optimal operation of the utility? Would the utility benefit by using system data for something beyond periodic billing, by operations and customer service, perhaps? With AMI or AMA technology, data is captured on at least an hourly basis, and transmitted at least once per day. This information is often used by operations and customer service to determine the health of the system, to identify work order items, and to address customer inquiries or concerns. If the data will be used primarily for periodic billing, AMR may be sufficient.

Fink: When considering an AMI solution, we looked for the option that best met our business objectives. At the City of Greenfield, we had a staff of three spending 20 days per month reading meters. We wanted a more efficient way to read meters accurately in order to eliminate truck rolls and other time-consuming activities, saving us money and time. Also, with limited IT resources, we wanted a hosted solution.

We?ve been utilizing Itron?s automated meter reading (AMR) solution since 2001 to efficiently gather meter usage readings. In 2012, we began migrating to Itron?s advanced metering infrastructure (AMI) solution. Now we?re down to three to four days of meter reading activities per month and the network pretty much eliminated truck rolls all together. In addition to virtually eliminating the labor-intensive aspects of reading meters, we are very pleased with our 99.9 percent read rate. City staff have already leveraged data from the network to proactively identify abnormalities in use and alert customers before they even know about the leaks on their own property. Plus, having Itron host our system helps us control our costs and save time.
Hanes: The utility should first understand its own needs and drivers.? For example, is the utility focused on improving efficiency of the meter reading process, improving customer service, providing consumers access to information, future-proofing the investment in technology, technology leadership, all of the above, or something else??

Next, look at how the utility will change its business processes to make the most of the system.? For example, if the utility has no intention of moving beyond quarterly billing, perhaps a full-blown AMI system is not needed, at least not today.? Water utilities need to take a holistic view of the impact AMR/AMI technology will have on their ?meter to bank? processes. They need to? look beyond the meter reading process to assess how the adoption of AMR/AMI technology will impact billing, customer service, collections, work orders, etc. Does the system that?s being considered offer a migration path? Does the system allow the utility to start small and add more capabilities as the utility?s needs change?

Schwartz: There are quite a few types of Smart Water Metering technology on the market today, and frankly, not all will work for every situation.? It really comes down to just how important data is to the utility.? Some utilities simply need usage and consumption data, other need a much broader set of analytics, which we offer in Allegro and Harmony, our newest AMI and MDMA solution.? It allows utilities to track trends in usage, immediately detect leaks, to alert customers to water budget limits in a tiered billing system, and to assist in automatically generating regulatory reports.?

Anderson: Some other question might include: What data is required by the utility?s customers? With AMA and AMI technology, detailed consumption data can be provided to consumers. This access and level of detail can help satisfy inquiries before they become disputes as consumers are reminded about how much water they used and when. Utility customers can see patterns and changes in consumption over time and, if they are making changes to conserve water, they can see how these efforts are working.????

Does the utility have the infrastructure and density to support AMI? Traditional AMI technology requires infrastructure on which to mount data collection devices, while AMR and cellular endpoints (AMA technology) do not. Typically, a certain density of services is required in order to justify the cost of a data collection device. This may be difficult to realize in a rural area.???

What resources are available to the utility? Does the utility have sufficient vehicles and personnel to support the use of AMR technology? Do they have sufficient installation resources and IT staff to support the use of AMI technology? Utilities whose IT and installation resources are constrained may benefit from a managed solution.

What is the single most important benefit AMR/AMI can provide a water utility?

Anderson: Because the pressures that face various utilities vary so widely, the most important benefit these solutions provide won?t be the same for every utility. Commonly, the greatest benefit in adopting one of these technologies is a reduction in operating costs. For some, the most important benefit will be in finding and fixing leaks to prevent the loss of water and revenue. For others, it may be a reduction in customer billing disputes. Still others may find that aiding their customers in water conservation efforts is their greatest benefit.

Fink: For the City of Greenfield, the most important benefit has been the operational efficiencies we?ve gained from Itron?s AMI solution. At one point we had three people reading 20 days per month. Now we?re down to three to four days of meter reading activities per month and the network pretty much eliminated truck rolls altogether.

Hanes: Traditionally, AMR and AMI systems have provided improved meter reading efficiency. Meters are read more accurately in less time. However, increasingly, utilities are recognizing the value that the systems can bring in terms of value to the consumer. Consumers who are able to monitor their own consumption are less likely to be surprised by (and therefore complain about) high water bills. As complaints decline, the number of billing disputes, payment delinquencies, write-offs, service disconnections and reconnections should also fall. These costs used to be hidden but are becoming increasingly visible as utilities gain valuable knowledge about their processes.

Schwartz: One of the most tangible benefits that utilities can extend to the rate payer is a ?Self-Service? model. With Master Meter?s newest Fixed Network AMI system, Allegro, consumers have access to their usage data within minutes, as opposed to weeks. Rate payers can access their consumption history via a utility portal and our new smartphone app for iOS and Android. In the event of a billing question, they can also contact the utility for an On Demand read. A consumer also has the ability to set budget alerts and reminders to better manage their usage, and can be notified via text or email if a leak is detected.

The use of smart metering has been known to have many benefits such as reducing non-revenue water. Financially, how does AMR/AMI impact a utility? Generally, is it something that helps save money?
Anderson: Each utility?s case is unique and so each case would have to be looked at independently. Most commonly, though, when a move is made to AMR/AMI/AMA, the decision is driven by the financial benefits.?

Fink: Our AMI system has many benefits, including enabling us to reduce non-revenue water and increase efficiency. The solution features two-way communications down to the meter, which allows us to collect, deliver, manage and analyze data more frequently. With granular meter data, we have greater insights into our system, including a more comprehensive understanding of how and when usage takes place. This leads to more proactive management of customers and resources, saving the city and our customers money.

For example, access to more granular data about a customer?s usage can flag continuous flow, which could mean there is a leak on the customer premise. This can help the end-user save money while improving customer service. Additionally, by reading meters remotely, we don?t have to send as many trucks into the field, which has financial and environmental benefits.

Hanes: The answer varies depending on the circumstances of the utility. In areas with aging infrastructure, AMI does support non-revenue water initiatives. In areas where demand is outstripping supply, AMI can support conservation initiatives that reduce or postpone the need for increased capacity ? which may require huge capital investments.

Some utilities spend an inordinate amount of time addressing customer high bill complaints. By ensuring that the meter readings are accurate and making usage data accessible to the homeowner, the utility can encourage customer self-service. This reduction in customer calls ripples into improved collections (less write-offs) and cash flow.

Schwartz: The net positive impact of incorporating a smart water network into a utility?s operation can be significant. From a capital expenditure standpoint, there will be a reduction in fleet vehicles for the meter reading and operationally, there will be reduced truck rolls. In addition, custom service will benefit by having customer touches reduced drastically through a self-service model and credit and collections will improve due to advance theft detection and identification of unregistered usage.

Do utility workers/managers in the office need training to use these systems?

Anderson: Additional training is required to use these systems. Happily though, there are many new tools available to make training more intuitive and easier to access. Some of those are online and video training tools and help videos embedded into online software. Onsite training is, of course, still one of the main training vehicles.

Fink: AMI solutions are much more information technology-intensive than standard metering systems, so our employees required training to learn how to use the new system. Fortunately, Itron is an industry expert and its professional services team has supported us every step of the way with training and consulting services.

Hanes: AMR/AMI systems are more complex than handheld meter reading systems, but not necessarily more complicated. To illustrate the difference between complex and complicated, we can look at the smart phone. The smart phone is much more complex in that it does many more functions than previous cell phones. However, the Smart Phone is designed so that it can handle these many tasks without a complicated user experience.

Similarly, good AMR/AMI system designs use the ?don?t make me think? approach to the user experience. By making the functionality of the system intuitive for the user, the system handles the complexity. For example, programming an endpoint may be an unnecessary complication for the installer. The endpoint should be designed so that it requires minimal or better yet no programming. Likewise, software should be designed so that functions can be completed with little or no human intervention. The user interface should be easily navigated, graphs of consumption intuitive and reports customizable.

Are there still municipalities/water utilities in the United States that do NOT use AMR/AMI or some form of smart metering to track water use and activity across the system?

Anderson: Although it is becoming rare, we do see customers who have not moved to AMR/AMI or some form of smart metering. Typically these are utilities in very rural areas. We expect that as the concepts of the cellular endpoint and the managed solution become more widespread, many of these utilities will be able to take advantage of the lower capital requirements and make a solid business case for a move to AMA.

Hanes: Sure. About 25 percent of the water meters sold last year in the United States are direct reading meters that can only be read visually. However, it wasn?t that long ago that 40 percent of all water meters required visual reading, so the trend is definitely in favor of increased automation.

What challenges, if any, are there with using AMR/AMI?

Anderson: From utilities using AMR technologies, we sometimes hear about the cost and expense associated with truck rolls due to customer billing complaints. We also hear that leaks can go undetected until a customer receives a high bill. Some utilities using AMI technology have expressed discomfort with the idea of having to install and maintain data collection devices and IT infrastructure on an ongoing basis. For these customers, a managed solution may be a better fit.??

Fink: As with anything new, there are growing pains in understanding a new system and creating new business processes. In the case of AMI, the benefits greatly outweigh any challenges ? challenges that can easily be overcome with training.

Hanes: Often, the biggest challenge with a new AMR or AMI system is not the system itself; it?s the business processes that surround the systems. In order to get the most value from an investment in AMR or AMI, the utility needs to take a close look at the processes that were used to support the old system and change or eliminate them based on the capabilities of the new system. For example, when a homeowner moves, many utilities have a system that requires a special meter reading be taken at or near the time the house is vacated. This generally made sense when the meters were only read once a quarter. However, with an AMI system that provides hourly readings, an accurate final meter reading can be captured without the need to dispatch a meter reader in a vehicle.?

Schwartz: With AMI, you?re looking at a 15-plus year investment, and because this is such a significant investment, one of the biggest frustrations being echoed today is the lack of interoperability between water meter manufacturers. Several years ago, we decided to blaze a path toward interoperability with our Universal Interpreter registers. This revolutionary technology allows a utility to choose most any third-party meter body and simply retrofit it with our Allegro Endpoint which detects the magnetic signature of the?meter?s measuring element?s coupling magnet,?and synthetically replicates the original manufacturer?s register technology.

What do you see as the next step for AMR/AMI technology? In terms of functionality, what aspects would you like to see improve in terms of data provided?

Anderson: We expect that consumers will increasingly drive advancements in AMR/AMI/AMA technology. Consumers are becoming more aware of water as a critical resource. They want to understand their bills and manage their expenses. Consumers want access to their consumption data and those who are working to conserve water want to know whether their efforts are fruitful. We anticipate these trends will result in pressure to make water consumption data more accessible and its presentation more intuitive.?

Fink: Now that the City of Greenfield is collecting usage data regularly and reliably, we have begun offering customers the opportunity to sign up for a web-based application where they can take a more hands-on approach to resource management. This web portal combined with proactive leak identification and information sharing with customers will continue to pay dividends for the City of Greenfield for years to come.

Hanes: It?s interesting to look backward and then project forward. In the early 1900s the focus was improved meter accuracy, durability and reparability. In the 1960s, the focus became accessibility ? reading meters behind locked doors or in meter pits or vaults. In the 1980s, the focus shifted to meter reading accuracy and efficiency.?

Now and into the foreseeable future, the meter is more and more like a sensor. It doesn?t just measure consumption, it identifies leaks and reverse flows. Instead of reading how many thousands of gallons were used on a quarterly basis, we now have access to hourly or even more discrete data that shows tenths of gallons. This data opens up a new opportunity for the utility to extract value from the system through data mining, process improvements, business analytics, consumer engagement and enhanced services.

Schwartz: I think that the next immediate changes will be in balancing power consumption at the endpoint with the needs of near real-time analytics and the insatiable appetite for information from the ratepayer. The longer term evolution in smart water networks will be in both the data profile and also how that data is incorporated into more advanced uses of system-wide analytics.

Leave a Reply

Your email address will not be published.

*