The city of Enid, OK, used to rely on three meter readers who traveled 5 or 6 miles every day to read between 300 and 350 water meters. This meant that the city utility would get just one reading a month for each of the water meters in this community of more than 50,000 residents.
That has now changed. Today, Enid’s water distribution department relies on Neptune Technology Group’s R450 fixed-network Advanced Metering Infrastructure (AMI) system to automatically read its meters remotely.
This means that the city no longer has to send its meter readers out into the field. Instead, Enid receives readings from its water meters once every hour. That’s a positive change, one that has led to a more accurate measure of water use, and one that allows Enid’s water distribution department to provide detailed water use histories to its customers.
“We don’t have to send people out,” says Scott Morris, utility services manager with the City of Enid. “We don’t have to worry about them getting through snow or heat. We don’t have to worry about dogs. We don’t have to worry about anything that could have happened to them when they were out in the city reading meters manually.”
The city’s upgrade to an AMI system has also saved it money. Morris says that revenues collected for the distribution of water have jumped 18% ever since the city installed its smart meters and remote monitoring equipment in June 2011.
And even the former meter readers are happy. The city has been able to employ these employees on more important jobs. Two transferred to other jobs within the city, while the third is now a technician tasked with repairing and maintaining Enid’s smart meters.
Enid is far from the only municipality across the country that has upgraded from a rudimentary meter-reading system to the more advanced technology of either automated meter reading (AMR) or its more technologically advanced cousin, AMI.
The manufacturers in this business say that water districts and utilities are more frequently turning to this technology, and especially the kind of fixed-network AMI that Enid has chosen, as a way to reduce labor costs, detect leaks, provide better customer service, and increase the accuracy of its water billing. This last point is especially important: Budgets remain tight in towns and cities across the United States. Every dollar is important. AMR and AMI technology then, that allows municipalities to more accurately track, and bill, the amount of water that their customers use, is welcome.
“The bottom line is that the meters are obviously the utilities’ cash register,” says John Parks, marketing director with Neptune Technology Group. “If the meters are getting too old, or if they are dropping off in accuracy, the utilities have to do what they need to do to make sure that they are maximizing their revenues. If the current method of reading meters is not cost-effective, utilities can install a system that will help them maximize the revenues of their operations. They will look at doing that whether the economy is bad or not.”
But how do utilities know when it is time to upgrade their existing AMR or AMI systems to new systems that are more technologically advanced? And if utilities decide that it’s time to move to a newer, more modern system, what hurdles do they have to overcome?
Preventing Revenue Loss
Revenue loss is the most important factor for most utilities that are determining whether they should upgrade to more advanced AMI or AMR systems, says Scott Williamson, chief executive officer of Capstone Metering.
“The amount of water that they are losing during the month that goes unaccounted for gets too high for the utilities,” says Williamson. “Those numbers creep up on them as systems age. Their existing units no longer register all the water that is being consumed. That is the first thing that usually inspires utilities to consider upgrading to a new system.”
And revenue loss doesn’t occur only through inaccurate meters. There are labor costs, too.
Too many districts still send personnel out in trucks to manually read water meter data. That’s an inefficient use of staff members who could use their talents and experience elsewhere in a district, says Doug McCall, director of marketing with Sensus, a technology company that offers its own water management systems.
And such drive-by tech doesn’t provide water districts with the in-depth water usage data that they need to better serve their customers. The problem? When districts send personnel out in trucks to automatically read meters, these districts are still receiving a tiny number of water meter reads each month, McCall says.
With a fixed-network AMI system, though, utilities can rack up meter-read data every hour.
“All that AMR technology is doing is replacing feet with wheels,” says McCall. “The wheels are driving around once a month just like the feet were walking around once a month. Utilities that rely on this technology are reading meters the same way–they’re just doing it faster. They are still only getting one read a month. And that doesn’t provide enough information to the customers.”
Water districts may have AMR systems that still require them to send personnel throughout the community in trucks to automatically read water meter data. That’s more efficient than sending out personnel on foot to manually read meters. But it’s as costly, or maybe even more expensive, thanks to the rising cost of fuel.
“Even if you have an AMR system, you might still be rolling trucks so much that, with the cost of fuel, you’re spending a lot of money to get those readings,” says Williamson.
And for those municipalities that are trying to go environmentally friendly, the amount of emissions that all those trucks spit out can seem unattractive, too, Williamson says.
Constant repairs are another warning sign that a system is outliving its effectiveness, says Norm Daigle, executive vice president of GridSmart Solutions with Harris Utilities, a company that helps utilities manage, process, and store the meter data provided to them from AMI and AMR systems.
Then there’s the fact that older systems sometimes don’t provide the information that utilities need to better serve their customers. Customers today want instant information. If their water bills were too high last month, they want to know exactly when their water usage spiked and what might have caused the increase.
Older systems might not allow utilities to provide this information. A newer, fixed-network AMI system, though, will. And this can make the difference between cranky customers and those who accept a utility’s explanation of why their water bill rose so suddenly from one month to the next, Daigle says.
“If utilities have a system that is not efficient in the way it is reporting consumption data to them, or if they have a system that doesn’t give them the information that they need to better manage their resources, than it might be time to consider upgrading to a newer system,” says Daigle. “They might need to upgrade so that they can provide their users with better customer service.”
The Hurdles Utilities Face
Of course, upgrading to more powerful AMI or AMR technology isn’t always an easy task. Utilities often face hurdles when making such a move.
Upgrading old meters can improve customer service.
At the top of this list is an unsurprising challenge: cost.
It’s true that AMI and AMR will provide utilities with annual savings, thanks to greater accuracy and less labor costs. But many municipalities still aren’t sold on spending the high upfront costs that come with replacing an existing meter-reading system.
City councils and village boards are taking a closer look at every dollar that their municipalities spend today. It can be difficult for utilities to sell board or council members even on a high-tech, fixed-network AMI system that comes with guaranteed yearly savings. Budgets are simply that tight.
At the same time, manufacturers might struggle to convince utilities to even take up this struggle. Utility officials understand how difficult it is to sell any spending measures today, and many may not even want to attempt such a sales job to their increasingly cost-conscious boards.
“The most obvious challenge that utilities face is that these systems are not inexpensive,” says Daigle. “The investment required can be large. At the same time, the work needed to install these systems can be intrusive. For many utilities, this combination is enough to turn them away from upgrading even those systems that are growing increasingly outdated.”
Williamson, from Capstone, says that this makes it even more important for companies like his to pound home the point that AMI and AMR systems will eventually pay for themselves in the form of annual water-revenue increases and cost savings.
To do this, manufacturers need to increasingly focus on the return on investment (ROI) that clients will
receive when they spend the upfront money to upgrade to a more accurate and efficient automated system, Williamson says. “The real value of a system becomes the cost reduction that utilities can have in their operating costs on a monthly basis,” he says.
Fixed-network AMI, for instance, can help utilities spend not just less on truck fuel each month, but on maintenance costs, too, Williamson says. Utility trucks won’t suffer as much wear-and-tear if they’re not being sent across a utility’s service area each day to manually or automatically read meters.
Utilities might also take the information they receive through their AMI systems to discover times of the day during which they might be able to lower their water pressure, saving them important dollars in the form of lower energy bills.
“The electricity costs are the biggest costs for most municipal districts,” says Williamson. “Districts that over-pump and over-pressurize are wasting money. If they can better manage their systems, it gives them a whole lot more flexibility in their yearly budgets.”
Manufacturers who don’t focus on ROI will struggle to move automation product today, Williamson says. That’s because not only are utilities focusing more on ROI, they are also looking for a shorter payback period for the technology in which they invest.
Williamson says he remembers when municipalities would consider a payback period of from eight to 12 years to be acceptable when it came to the purchase of new technology. Today, a growing number of municipalities want to see their technology investments recoup their initial costs in just four to six years. “That is a significant difference on ROI,” he says. “That’s why we have to continue to make a compelling argument regarding the annual revenue and savings that these systems can generate.”
The good news, Williamson says, is that municipal districts and utility officials today completely understand the payback argument. They are more often willing to invest in technology if they can be assured of a solid ROI each year.
“A lot of municipal officials don’t mind investing in something that is truly worth investing in,” says Williamson. “If they can see the value of their investment, they will consider making an investment. You just have to be able to show them that value.”
Making the Upgrade in Wisconsin
The city of Madison, WI, is not a small metropolis. Its population stood at more than 235,000 as of the summer of 2011.
But the city has been relying on just three meter readers to manually read its water meters, according to Robin Piper, customer service manager at the utility.
That is changing, though. The City of Madison Water Utility is upgrading to an AMI system offered by Itron as part of its Project H20, the city program designed to automate the collection and analysis of water meter data throughout Madison.
As part of the project, the city will install more than 66,000 Itron datalogging communication modules and a fixed-network collection system.
This will allow the city to more accurately measure the amount of water its customers are consuming–and increase the amount the city bills for water use each month.
The new system will also allow the city to better uncover water leaks in the system as the fixed-network discovers unexpected water use spikes. Madison officials can also rely on the fixed-network system to measure the impact of their water conservation measures; the network can determine if consumers are actually using less water after the city targets their communities with conservation messages and programs.
Piper says that the city had the choice to upgrade to an AMR system. But officials decided that if the city was going to move to a new technology, it should invest in the more advanced AMI fixed-network solution. With this technology, the City of Madison will move from a six-month water-meter billing cycle to a more cost-effective one-month cycle.
“We decided to skip over the end of last century’s technology and go with a fixed-network system,” says Piper.
The city began rolling out the system on a limited basis in late July. But even though there isn’t any official data yet on its impact, Piper is looking forward to an increase in water revenues and a reduction in water loss throughout the system.
“We think this system will have a positive impact on our water budget,” says Piper. “That’s why we went with the fixed-network AMI system. We wanted to see that high return on investment.”
Officials with Itron also say that they expect Madison to realize financial savings from its investment. “Itron’s AMI solution for water will help the City of Madison Water Utility bring its metering system to the next level by enabling the automation of reads and other advanced metering capabilities,” said Paula Billingham, Itron regional vice president and managing director for North America, Water, in a written statement.
“At Itron, it is our priority to deliver solutions that help our customers achieve their business goals. We are excited to do just that for Madison Water Utility,” adds Billingham.
Making the Decision
Parks, from Neptune, says that his company can help utilities make a detailed ROI analysis of the savings and payback period that an upgraded AMR or AMI system would provide them.
Neptune offers its AMR/AMI Advisor software that allows utilities to plug in the variables of their operation and their costs. The software then determines an estimate of the utilities’ annual cost savings and revenue increases. “This gives them a good look at the impact of AMR/AMI technology,” says Parks. “We’ve seen a lot of our customers use this to determine that, yes, they will see significant savings and revenue increases by installing the right AMR/AMI system.”
Parks, though, says that each utility needs to look at its own needs before making the decision to upgrade to new automated metering technology.
Some systems may work better for larger utilities in urban areas, for instance, but might not be as effective for utilities serving a smaller, rural area. “In this industry, there is always some technology that generates a lot of buzz,” says Parks. “Right now, there is a ton of buzz over fixed-network infrastructures. They are right for some utilities–for some utilities they make a lot of sense. But for others, a mobile or a combination of a mobile and fixed-network deployment makes more sense.”
What does a utility have to consider when deciding what upgrades its needs? Parks recommends that utilities look at their demographics and service areas, and at the terrain that they have to cover.
“Utilities are all unique,” says Parks. “One system can’t meet all the needs of all the utilities out there. Utilities don’t have to get caught up in the latest technology phase if that particular technology doesn’t make sense for them. Utilities should base their decisions on what technology best addresses their needs and meets their budgets and financial objectives.”
In Enid, that technology did happen to be a fixed-network AMI system.
Morris says that city officials are happy with the system. Enid’s water utility receives daily reads from 96% to 99% of its water meters thanks to the fixed-network system. Human activity is preventing this from being an even higher percentage.
People might park their cars over a meter. Others might break the meters while mowing their lawns. Plumbers sometimes even accidentally cut the wires leading to the smart meters.
Still, even with typical human error, Enid’s AMI system is providing utility officials with more consumption data then the city has ever received. “It’s an outstanding tool,” says Morris. “Before this, we’d get one read a month. Now we are getting one read every hour of every day. We are getting 720 times the amount of information we used to receive.”
This has helped the city boost its level of customer service, something that has resulted in happier water consumers in the city, Morris says. “We have a lot more information that we can now pass on to the customer,” he says. “We can show the customers exactly when they have had a leak that might have caused their water bills to rise. Customers are much happier when we can tell them what might be behind a higher water bill.”
Water district officials do have to adjust after their utilities install a fixed-network AMI system. But once district staffers learn how to read and analyze the data that these systems provide, they inevitably become fans, McCall says. “It’s a paradigm shift in the entire way the utility does business from a customer service standpoint,” he says. “Training does have to be done to teach staff members how to best serve the customers with this data. But once that’s done, I often hear people say that if we took their system away from them, they wouldn’t know what to do.”
Daigle, from Harris Utilities, says that he expects to see a growing number of water utilities invest in AMI technology.
Electrical utilities are already using the technology in force, Daigle says. It’s only a matter of time before more water providers realize the benefits of being better able to monitor water consumption, he states.
“It’s easier for electrical utilities to make the move to AMI,” adds Daigle. “But I am seeing a bigger push today on the part of water utilities to upgrade to AMI, too. More utilities are interested in conservation, and AMI can certainly help them reach their conservation goals. More utilities are trying to cut down on water loss in their system. They want to cut down on water that is consumed by not billed, too. For all these reasons, I think we’ll see an even greater emphasis on AMI in the near future.”
McCall from Sensus points to the higher level of customer service that utilities can provide when they rely on AMI technology. Being able to show customers exactly when their water usage spiked is a powerful tool, one that more utilities will want in the coming years, he says.
“When customers call in, they love to be able to find out exactly what their water usage is at the exact moment,” says McCall. “Many water utilities can only tell customers what their water use data was three-and-a-half weeks ago. That’s not good enough. Customers want instant information today. They want real-time information. And they’d love to be able to talk to a customer-service representative to find out that their water use spiked two weeks ago. They might say, “˜Oh, yeah. That’s when my in-laws were in town.'”
Concludes Master Meter’s Ian MacLeod (Vice President of Marketing), “Today’s metering systems and meter reading communications are engineered with a lengthy lifespan in mind that includes a migration strategy and a flexible product design that supports incorporating new technologies as they develop. This is key when considering an investment in AMR/AMI.”
