A FATHOM Drought Watch Special Edition
World Water-Tech Investment Summit: Toronto, Ontario
While the electric industry has been advocating and installing “smart grid” technology for more than two decades, the water sector has lagged behind. Today, however, there is increasing awareness of the opportunity created by technology for the water industry, and many water utilities are evaluating the potential for deploying smart grid technologies. And for good reason.
The Smart Grid for Water offers revenue protection for our cash-strapped water utilities; it offers the means to operate our infrastructure in ways that both extend the life of existing assets and defers the requirement for new investment in distribution and treatment facilities; it allows the engagement of customers in the business of the water utility; and it provides customers the tools to manage their behavior to control their own costs, even as the price of water increases.1
While there is a propensity to consider the Smart Grid for Water a clone of the electric smart grid, they are in fact similar in name only. They differ in design, objectives and use.
The electric smart grid and the Smart Grid for Water are being developed to achieve significantly different goals. In the electric world, the smart grid is about maximizing the use and stability of generative assets and deferring the construction of generation capacity through load shifting and shaping. With no method of long-term storage, the very high costs of construction and operation of large base-load power generation facilities, and the higher operational costs of peak-load generators such as gas turbines, maximizing the distribution of produced energy is paramount. From the customer’s perspective, the electric smart grid is not about using less, but moving use to more efficient periods in the generation day.
The Smart Grid for Water on the other hand, is about optimization of resources: the water itself; the labor associated with producing and delivering that water; and the power, chemicals and other consumables required to deliver it.
Whereas the power industry can convert fuel into electrons, the water sector lacks that alchemy; water utilities must maximize the efficiency of use, not the efficiency of production.
SECTOR DEMOGRAPHICS AND POLICY
In addition to the differing goals, the demographics of the water industry differ markedly from those of the power industry. There are approximately 3,300 electricity providers in the United States, with the 68 percent of the population served by investor-owned utilities (IOU) operated as public service corporations. Further, only 10 percent of generative assets are owned and operated by public entities.2 This consolidation of the power sector has resulted in significant scale, financial resources and sophistication in the industry. Those characteristics have in turn driven national policy, oversight and regulation.
The water utility industry on the other hand, is decidedly fragmented, and skewed to municipal ownership. According to the EPA, there are more than 52,000 community water systems in operation in the United States3, with 92 percent of those systems serving less than 10,000 people.4 Eight-five percent of those systems are public entities.5
The reason for this fragmentation is obvious: water, unlike electrons, is extremely heavy, bulky to transport and is incompressible in its liquid state. These physical properties of water preclude many of the consolidation benefits that electric, gas and other utilities have when dealing with resource supply and delivery efficiency. In the water industry, it has always been easier to build new utilities, close to the demand, than consolidate production and distribution infrastructure.
In addition, the fragmentation and local nature of water has prevented – except for the case of water quality – the development of effective policies and regulation as it relates to their operation. As a result, there is little or no national policy direction for water in the United States.
From a technological perspective, the electric smart grid collects data at a higher frequency and higher density than the water smart grid. Because the electric smart grid is a generation and transmission management tool, and there is no way to store electrons for future use (setting aside developments in battery storage), the electric utility industry needs to know immediately when demand changes so that generative and transmission assets can adapt quickly and efficiently. As a result, the electric industry needs instantaneous demand information. This has typically resulted in a requirement for two-way communication between the utility and the consumer’s meter.
Further, as power is charged on the basis of overall consumption (kWh), peak instantaneous power (kW) in a rolling 15-minute interval, and power factor, the need for high frequency information is critical for electrical billing purposes.
Smart water meters, however, typically collect data at one hour intervals and transmit this data at 4, 6 or 24 hour intervals to the utility. This is due to the extreme environment in which these meters exist: outside in pits or in basements and most often without a direct power supply. This places functional limits on the number and frequency of transmissions as a means to maximize battery life. Further, there are currently few real drivers for more granular detail. In the water world, rate designs have yet to move into the timeof-use realm. They may in the future as utilities align their own expenses with their demand curves, but until they do so there is less of a direct driver for two-way communications.
From a customer perspective, the price of water is increasing – simply by virtue of the general increase in labor and consumables costs. Add in the requirement to replace aging infrastructure, physical water scarcity, declining quality, increasing regulatory requirements, and we can see that prices will continue to escalate.6
“Together, increased demand and lower supply will place a premium on the industry to find new and more efficient ways of allocating, treating and using water.”7
As costs increase, customers will demand information on their water use and how to control their costs. They will also demand that regulators and city councils impose performance metrics on utilities to reduce the scale of rate increases. Utilities will be driven to be more efficient, and customers will be driven to use less water. These are good outcomes, and the Smart Grid for Water facilitates them both.
This inherent customer connection is one of the defining elements of the Smart Grid for Water. No water smart grid installation can be successful without this engagement. While the technology can provide the conduit, it is only through engaging customers that the true benefits of the Smart Grid for Water can be realized. The electric smart grid in contrast, is a utility-focused management tool.
Because a water-conscious customer base means sustainability, and the Smart Grid for Water is about resource and financial stability, the consideration of the customer is paramount. With the help of our customers, we will get more from our existing systems, and do more with less.
“Understanding the role of information and the household consumer is integral for transforming a ‘Water supply City’ where the focus is on infrastructure alone to a ‘water sensitive city’ where infrastructure users and the environment are integrated.”8
SECURITY AND MOTIVATION
The collection of high frequency, high granularity customer information in the electric smart grid has
highlighted the potential privacy and security pitfalls associated with smart metering. There is also
the specter that the electric smart grid is a means of increasing revenue with little or no benefit to the
Water, however, remains for the most part a “local” issue, and there is a much higher likelihood for customers to see the direct benefits of smart grid technologies locally – conservation of water resources, longer asset life, and revenue stability for their utility, etc. In addition, given that data is collected at a lower rate than that of the electric smart grid, the ability to discern, in real time, the water patterns within a house does not exist. The result is that the Smart Grid for Water is less likely to be perceived as an invasion of privacy.
THE SMART GRID FOR WATER: THE GATEWAY TO SMART CITIES
The properties of the Smart Grid for Water often make it the ideal springboard to Smart Cities. Because the water industry is decidedly municipal in nature, and water utilities touch virtually every citizen, municipalities have the ability, with the Smart Grid for Water’s distributed communication network and customer base, to demonstrate the value of an interconnected enterprise. Starting from the Smart Grid for Water, cities can overlay management for storm water, street lights, trees and greenspace, traffic and amenities. With the communication and data layers complete as a function of the Smart Grid for Water, the opportunity for additional services becomes expansive.
And by properly exploiting the revenue mining capabilities inherent in the Smart Grid for Water, utilities can find and maintain the funds necessary to advance those Smart City initiatives.
FATHOM: THE SMART GRID FOR WATER
FATHOM is a geo-spatial, cloud-based water meter data management and analysis platform that creates the Smart Grid for Water for utilities. FATHOM is designed to acquire, normalize, secure, host and serve the data, processes and information necessary to maximize the efficiency of water utility operations. In doing so, FATHOM finds revenue hidden in data and engages customers in meaningful conservation while providing the tools necessary for them to manage their costs. Together with our partner utilities we have been able to demonstrate demand reductions of 5 to 15 percent while finding an equal percentage of revenue lost in the data.
1 T.T. Hill, G.S. Symmonds, The Smart Grid for Water, Advantage Media Group, Charleston, South Carolina, 2013
2 American Public Power Association, 2015-2016 Annual Directory & Statistical Report, http://www.publicpower.org/files/PDFs/USElectricUtilityIndustryStatistics.pdf
3 US Environmental Protection Agency, http://water.epa.gov/infrastructure/drinkingwater/pws/factoids.cfm
4 USEPA, “National Characteristics of Drinking Water Systems Serving Populations Under 10,000”, July 2011
5 USEPA, “National Characteristics of Drinking Water Systems Serving Populations Under 10,000”, July 2011
6 J. Beecher, “Trends in Consumer Prices (CPI) for Utilities through 2011”, Institute of Public Utilities, Michigan State University, 2012.
7 M. Cave, “Independent Review of Competition and Innovation in Water Markets: Final Report”, DEFRA, April 2009
8 Damien P. Giurco , Stuart B. White and Rodney A. Stewart, “Smart Metering and Water End-Use Data: Conservation Benefits and
Privacy Risks” Water 2010, 2, 461-467