Thinking Twice About AMI?

cost and benefit graph

Alternatives and Complementary Systems to Consider

| By Peter Mayer

Customer metering is fundamental to the successful function of a modern water utility. The introduction of expensive Advanced Metering Infrastructure (AMI) systems with fixed data transmission networks and battery powered “smart” water meters has confronted many utilities with the challenging and consequential decision: To buy AMI or not to buy? Today, the alternatives to AMI are making this decision more difficult than ever, and they have utilities considering options beyond fixed communication networks.

On the Fence About AMI?

Purchasing an AMI system is a significant commitment for a utility to make. For starters, it commits the utility to a long-term relationship with a single meter company, when previously utilities could use different brands of water meters across their system.

As part of the long-term commitment, AMI requires installation and maintenance of a fixed wireless communication network across the utility system for communicating meter read data back to the water provider. Operating and maintaining a wireless network presents an unfamiliar infrastructure challenge for many water providers.

Then, there is the financial commitment. Cost-benefit analysis conducted for WSSC Water in suburban Maryland by a consultant estimated the cost of their AMI system to be $200 million. It is worth noting that these costs do not include the ongoing maintenance and operational expenses of the network, which can also be significant.

The cost of AMI systems is ultimately borne by utility customers, and increased water bills for all customer classes will accompany AMI. AMI systems require such significant investment that many water utilities opt to start work with a consultant to develop the “business case” for AMI, which is then used to promote the concept with decision makers.

What can be forgotten in the AMI cost-benefit analysis is the financial commitment for the customer-facing portal. If customer-side water savings are a goal of the smart metering program, a portal and a way to communicate quickly and directly with customers is required and should be prioritized by utilities undertaking AMI projects.

According to research from the American Water Works Association (AWWA) on customer portals, a reasonable range of water savings associated with AMI-based programs with a customer portal falls within a range of 2 to 10 percent. Without a portal, there are no customer-side water savings from AMI.

The level of savings is determined by several factors, most significantly the level of customer enrollment in an AMI portal and the design and efficacy of the portal itself. AWWA researchers conducted 10 interviews with U.S. utility managers and found AMI portal registration rates ranged from 4 to 71 percent, with the majority of utilities at the lower end of this range.

Once Bitten, Twice Shy

Missteps with AMI implementation can delay metering projects for years. In 2023, San Diego is considering restarting an AMI rollout that began in 2012 and came to a screeching halt after “billing irregularities” resulted in more than 20,000 San Diegans being collectively overcharged millions of dollars for water usage. Initially, the city publicly denied the existence of widespread problems with the new smart meters, but eventually had to admit and correct the errors. In 2018, the city shuttered the program after installing smart meters on only 6 percent of water customers, but this year San Diego is finally restarting the program.

In news reports from NBC San Diego, a city spokesperson acknowledged that five years ago, the city didn’t know how to handle smart meter and grid infrastructure installation glitches, which piled up and became overwhelming. This time around, the city expects to spend up to $33 million over the next five years on implementation of the AMI system and consulting fees.

Alternatives & Complements to AMI

Two key functions of AMI are (1) meter reading for billing purposes; and (2) improved water management and reduced water use through customer communication and data.

Water utilities are very familiar with meter reading for billing purposes. It is a core utility function that has been implemented by every retail water provider in America in some capacity. AMI represents a new generation of water metering technology, which utilities may choose to adopt or not or may adopt in a hybrid form.

Many utilities have chosen to extend the life of existing metering systems without AMI or with partial AMI, implementing a hybrid system using a combination of meter reading methods. Extending the life of existing meter systems while strategically deploying remote meter reading capabilities at certain locations can be a least-cost, no-regrets approach for providers that for any reason are unable to move forward with an AMI system.

If improved customer-side management and water savings are a significant desired outcome, customer information portals can be an effective tool. Importantly, customer portals can be implemented even if smart meters are not installed. Working to provide customers with access to their own monthly or bi-monthly billing data is still useful, and it begins the process of enrolling customers in the portal. Companies like WaterSmart Software offer customer water use reports that can be based on monthly billing data or on hourly AMI data.

Customer-side smart metering technology like Flume provides a solution for providing customers with that real-time water use data that AMI has promised but seldom delivered. Flume straps onto existing metering infrastructure, including AMI and non-AMI systems. Once installed, Flume reads water use every 5 seconds and transmits this online through a hub the customer installs and an app, all connected to the Internet.

The rate at which Flume reads water use allows its machine learning techniques to analyze where water is going in real time, including leaks and identification of indoor and outdoor applications. Flume and other smart home technologies are not used for billing purposes. Customers with Flume-equipped homes have access to their water use information in real time through a smartphone and desktop application. Flume also provides this analysis to utilities with detailed water data dashboards.

Access to real-time water use data helps customers reduce water use, particularly leaks. Flume has found that within four weeks of installation, its customers reduce indoor water use by 14 percent (more than 17 gallons per household per day). The indoor reductions are then maintained over time, saving these Flume users an average of 6,280 gallons per year.

Is AMI Inevitable?

AMI has been presented to the water industry as a future certainty, but as Yogi Berra said, “Predictions are tough, especially about the future.” Rapid changes in public wireless communications networks and new technologies are producing less expensive options that could eventually render the “I” in AMI (the wireless infrastructure) as obsolete. For anyone who has ever pondered the hefty investment required by AMI, there are sound reasons to think twice about it and some viable alternatives to consider.

The fundamental advance represented by AMI is the ability to read meters remotely and more frequently, and to provide that information promptly back to customers. Along with expense, concern about installing and maintaining a fixed network to communicate with water meters across a service area with accuracy have been barriers to adoption, as seen in San Diego.

What if an alternative, existing wireless network could be used to communicate meter data? Eliminating the need for a separate, fixed communication network could reduce upfront and long-term operating costs and rapidly increase adoption of smart meters. The Internet of Things (IoT) could be a game-changer for water metering. Amazon leverages Subeca technology to create a smart meter system that uses long range wide area networks (LoRaWAN) reserved for IoT devices to communicate meter data. In the coming years, a new wave of smart meters that don’t require a fixed network and associated ongoing maintenance, could make the decision to install smart meters easier for water providers.

Water meters that read more frequently and provide real-time data to customers do seem inevitable because they offer so many advantages. But smart metering in the future could look different than it does today. In the coming years, the method used to communicate meter data back to the utility will evolve and could alter the financial equation for cost-conscious water providers and increase adoption of smart meter technology.

Meters Matter

Metering is fundamental, and each water utility must choose the metering system that best fits their unique situation. The fact that water is accurately measured in a timely fashion by the water utility engenders consumer confidence and enables reliable revenue collection, a win-win situation. Utilities cannot afford missteps when it comes to meters, revenue, and the interconnection between customers and the water system.

AMI and real-time metering solutions can provide valuable information to water providers and customers alike, especially for conservation efforts.

For many water providers, the path to AMI may look very different than what was presented 10 years ago. Fixed network AMI may not be the best path forward when seeking better data. Today, utilities are finding innovative approaches to implementing AMI and hybrid systems that have them thinking beyond expensive fixed communication networks..


Peter Mayer, P.E., is principal of Water Demand Management, LLC, based in Boulder, Colorado. He sits on the American Water Works Association’s Customer Metering Practices Committee and is the lead author of Manual of Practice M22 Sizing Water Service Lines and Meters.

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