Revenue is the lifeblood of a water utility. Most municipal water utilities and all investor-owned water utilities operate as an enterprise: they must generate enough revenue to cover their expenses. Those expenses include not only the day-to-day costs of labor, chemicals, power and other services, but also the debt-service requirements for existing and new infrastructure. With new water pipelines costing in excess of $1 million per installed mile, plus the increasingly stringent regulatory standards driving up treatment costs and the requirement to re-invest in our aging infrastructure, the planning, execution and operation of a water utility—even in small municipal entities—is a multi-million dollar business that requires careful management.
Considering the importance of revenue for our utilities, we pay surprisingly little attention to the cash registers in our business—our meters. Once installed, a typical utility will read meters monthly, quarterly or even annually, and the meters themselves are physically untouched for 10 to 20 years. Our blind faith in the ability of these devices to operate continuously, accurately and reliably without intervention for 20 years is staggering—and unfortunately unfounded.
Studies on meter accuracy as a function of time and volume indicate that accuracy degradation can occur immediately, and without warning. Waiting 10 years to replace meters “on schedule” simply removes revenue from the utility’s pocket resulting in increased rates and an increase in non-revenue water, a condition that in turn can result in substantially increased operating costs as staff and contractors search for phantom “leaks” in the distribution system.
The issue is particularly acute for larger commercial and wholesale meters as they can represent a substantial portion of a utility’s revenue. For one FATHOM utility partner, 23 percent of its water deliveries were to only 0.06 percent of the customers.
In another, we found significant revenue by replacing even “young” meters. In fact, the age of the original meter was almost a neutral factor—the degradation occurred in meters that were new (0 to 5 years old) almost as frequently as those that were more than 15 years old.
THERE’S MONEY IN THEM THAR’ METERS
While the prevalence of meters and their importance in the utility is well known, we actually do not know how well they are performing. That is, we do not have a real measure of understanding the health of our metering population. At best, the most advanced utilities remove a sample population of meters for condition assessment and develop statistical models that correlate age, volume, accuracy, and physical condition to develop replacement schedules. At worst, meters are operated for 20 or 30 years without attention. In the vast majority of utilities, meters are replaced on the basis of installed age, with no consideration of volume, accuracy or condition. In fact, absent a complaint from a customer, meters are rarely removed for calibration or accuracy checks.
The problem stems from a void of data available to make assessments on meter conditions. This is further compounded with the fact that there are very few direct trending techniques that yield useful and actionable results. Most analyses of accuracy and failure rates for residential meters resemble a cloud of dots through which a linear trend is drawn, from which utilities then develop rules of thumb for meter replacement.1 The reality is that meters can fail at very little throughput, or can last many times the “predicted” life. Meter performance is an individual characteristic.
From an asset management perspective—and more importantly, a revenue protection perspective—the best option is to monitor all meters continuously, compare its performance to itself, and identify potential failures before they occur.
PROTECTING REVENUE WITH AMI AND ANALYTICS
The introduction of Advanced Metering Infrastructure (AMI) has opened significant opportunities for the identification and management of meter failure. The much improved granularity and near-real time nature of the data collected by AMI-fitted meters allows utilities to understand what is happening to their meters from an operational perspective and to eliminate issues before they become significant enough to impact billing and revenue. As the data environment becomes richer, we now have the opportunity to use statistical methods to evaluate the integrity of metering systems. For the first time, utilities have a means of understanding the performance of individual meters within a distribution system in real time.
Using the data from AMI systems, we can now identify when meters may be exhibiting signs of failure, such as failing to transmit, or registering no flow for extended periods. These conditions, however, are not unique to the condition of the meter. Some of these issues may unfortunately be the result of external conditions or events such as having a vehicle parked over a meter pit, customer vacations or workplace shutdowns.
To avoid “false positives” that can drain resources, meter health analytics must take into account the actual conditions associated with that particular meter, including elements like:
- Changes in the number of occupants at an account
- Changes in the type of account, such as transitioning from a hair salon to an office
- Weather and evapotranspiration rates, such as temperature, relative humidity, and precipitation
- Seasonal or event-driven operations, such as sports complexes
To account for these variables, the FATHOM Meter Warranty & Accuracy module compares data from the Customer Information System (CIS), self-reported data from the FATHOM U2You customer presentment portal, and external datasets like weather and climate systems in addition to historical consumption patterns. By tracking changes in consumption over standard intervals (month-over-month, season-over-season, year-over-year), a pattern is developed for each meter. In addition, by comparing an individual meters’ changes in consumption to that of the entire population of similarly sized and classified meters, with the same meter model, we can get a more detailed understanding of the health of the meter.
Armed with this information, a utility can identify meters which may be showing signs of degradation of accuracy and intervene well before the issue has the potential to create a loss of revenue for the utility.
Understanding the condition of your meter population is a critical performance indicator for water utilities, particularly in these days of intense scrutiny on water management, mandated conservation2 and general declines in water consumption.3 Through FATHOM and our revenue assurance products and processes, utilities can realize immediate revenue increase and most importantly the preservation of that revenue increase year over year.
Highly granular AMI data, with analytics combining data from other platforms, provides an unambiguous assessment of our utilities’ most important piece of equipment, our meters, and ensures the health of our utility enterprises.
1FATHOM Drought Watch, Rescuing Revenue, Volume 1, Issue 27, October 9, 2015 (http://www.gwfathom.com/download/1542/)
2FATHOM Drought Watch, The Regulatory Hammer, Volume 1, Issue 28, October 23, 2015 (http://www.gwfathom.com/download/1539/)
3FATHOM Drought Watch, The Other Drought: Dollars, Volume 1, Issue 25, September 25, 2015 (http://www.gwfathom.com/download/1704/)