By Kali Gerhardt
Ratepayers are the primary source of revenue for water systems. Revenue from water goes toward covering operating expenses and preparing for future capital investments. However, there is a wide gap between how much revenue utilities earn versus the amount of funds utilities will need to repair our aging infrastructure. One way water systems can earn more revenue is with rate increases; however, these increases often come with public objection or at the reluctance of elected officials.
A fairer and more favorable way to mitigate this funding gap is by utilizing the latest in metering technology – static, non-moving parts meters. Static water meters are more commonly known as electromagnetic or ultrasonic meters. The principle behind static meters is that no moving parts inside a meter benefits a water system’s operations in numerous ways. Benefits for water systems using static meters include the capability to measure lower flows to earn more revenue from water distributed, sustained meter accuracy because there are no moving parts susceptible to wear and tear, notification alarms for leaks and bursts to reduce non-revenue water, and improved customer service with data loggers inside the meter to investigate specific events that occurred on the customer-side of the meter.
Simply put, static water meter technology matters because it makes it possible for a water system to earn more revenue on a consistent basis. When a water system’s earnings are rooted in customers paying for every drop of water they use, the water system stands on solid ground to earn enough revenue to support operational costs and future capital needs. At the same time, this allows the municipality to maintain favorability with the community by limiting rate increases. With static water meters, cities can increase their water systems’ accounts receivable to help overcome the future infrastructure challenges on the horizon.
Infrastructure Challenges & Revenue Gap
The American Water Works Association’s ‘Buried No Longer’ report indicates that the United States will face roughly double the necessary investment costs for water infrastructure replacement, from about $13 billion a year in 2010 to the tune of almost $30 billion annually by the 2040s (a figure that does not take into account inflation). An estimated 29 percent of investment costs will need to be allocated for water loss control. The average water loss within a public water system is 16 percent, of which up to 75 percent is recoverable, according to AWWA’s Water Loss Control Manual.
These figures are not news to water professionals. Between organizations such as AWWA, the U.S. Environmental Protection Agency (EPA), Water Environment Federation (WEF) and American Society of Civil Engineers (ASCE), water professionals are constantly reminded of the looming infrastructure crisis. So, what can be done to subsidize this inevitable need to invest in our future water infrastructure needs? A solution as simple as replacing your city’s water meters can help.
Ratepayers are the central source of revenue for water systems. Water bills are typically based on consumption volume. Consumption is determined by the amount of water registered by the water meter. Therefore, it is necessary that the water meter capture the same volume of water that is delivered to the customer. This also includes leaks, such as a leaking faucet or running toilet, in which the customer may not be consuming the water, but the water utility is still incurring the operating costs to distribute this water.
The start flow rate of a water meter is the flow rate at which water meters begin to measure consumption. A water meter with a low start flow provides a water system with a method to recoup revenue that is legitimately earned. After all, your water system does deliver the water, and your ability to manage the tightness of water fixtures past the water meter is out of the water system’s jurisdiction. This brings about a challenge for water systems to be able to run a healthy operation if they do not receive equal value for water distributed.
Not all water meters are built to measure lower volumes of water, such as leaks in a customer’s home. The standard start flow rate a water meter must register to meet AWWA standards is 0.25 gallons per minute (GPM), according to AWWA. However, the EPA’s ‘Fix a Leak Week’ fact sheet reports that average household leaks can account for more than 10,000 gallons of water wasted every year. In calculating the rate of flow of these household leaks, it equals an average flow rate of 0.019 GPM (see Figure 1). Water that reaches the end-customer but is not billed for can be costly to a utility, since this is the point where water reaches its highest cost to produce and distribute. And if your water system’s meters are only meeting the minimum standard of 0.25 GPM, your water system is missing the leaks the EPA reports are assuredly happening.
Additionally, if your current water meters are not registering water usage at this low level, it is more difficult to identify leaks and notify customers so they can repair the issue. With static water meters, water systems can set continuous flow thresholds for their water meters. If water runs continuously through the meter for 24 hours at a particular flow rate, an alert inside the meter will indicate a leak on the customer’s side of the meter. Therefore, customers also benefit from static water meters with this proactive approach to identifying and stopping leaks.
Converting Unmetered Water to Dollars
The value of switching to static water meters can be demonstrated with a simple example of how unmetered water can be converted into dollars. By using an example of a water system with 5,000 meter connections, the non-revenue water amounts can be calculated. If the city’s average water and sewer rate is $10 per thousand gallons, and the average household leaks 10,000 gallons per year as the EPA states, then this example city would experience $100 of non-revenue water per household per year, simply due to leaks. That totals $500,000 per year in lost revenue.
Depending on the low flow measuring capabilities of the city’s water meters, either the utility is capturing these leaks as revenue or the water is lost and never billed. With an accurate water meter that measures the 0.019 flow rate of leaks, combined with a meter lifecycle of 20 years, the water system can recover $2,000 per meter. Over the course of 20 years, this city can recover $500,000 per year and $10 million for the meter’s lifetime.
Figure 1: Calculation of flow rate for household leaks
Static Water Meter Technology
The above-referenced increase in revenue is dependent upon two criteria: the sustained sensitivity and accuracy of the meter and its ability to measure lower start flows. As referenced in an AWWA Journal article from 2010, reducing water loss “caused by meter inaccuracies at low flows can result in substantial increases in revenue for a utility.” Therefore, it is imperative for a water system to select a water meter that utilizes an accurate and stable measuring principle. With this reasoning, it is no wonder that the growth of static water meters is exponential. Each year, water systems are replacing their mechanical moving parts meters for the static non-moving parts technology at a compound annual growth rate of 13.3 percent from 2014-2021 (IHS Markit Smart Utility Meters Intelligence Service, 2015). This means that the adoption of domestic static meters will grow on average by 13 percent every year during this timeframe.
The next step toward bringing your water system closer to this additional revenue is knowing your available options for water meters capable of this return on investment—meaning, the water meter must be capable of measuring at or below the 0.019 GPM flow rate of leaks.
Static water meter technology matters because it makes it possible for a water system to earn more revenue with measuring technology that is sensitive enough to capture low flows. When your water system’s revenue is rooted in customers paying for every drop of water they use, it makes covering operational costs and future capital needs feasible. In addition, the benefit of limiting rate increases is beneficial to your community. It is true that the average household leaks an average of 10,000 gallons per year. Depending on the water meters your water systems has, your city is either capturing the leaks as revenue or never billing for it; the metering technology exists today to ensure every drop of water is captured as revenue for your water system and community.
Kali Gerhardt
Marketing Manager | Kamstrup Water Metering
Kali Gerhardt is the marketing manager for Kamstrup Water Metering, based in Atlanta, Ga. For the past four years, she has focused her efforts on developing marketing strategies to increase awareness of the value of our precious water resources to municipalities and consumers.
