By Dan Rafter
The hope is that inaccurate water bills will soon become a thing of the past in Baltimore, MD.
That’s because the city announced in late March that it is seeking bids for the replacement of its entire water-billing system. The goal is to install a new automated meter-reading system, one that will provide Baltimore’s water users with accurate bills.
The current Baltimore meter system is beloved by no one, with residential and business customers alike complaining of frequent, and sometimes large, billing errors.
Baltimore’s city auditor, for example, released a critical report on the water system in February. In response to this report, the city issued $4.2 million in refunds to about 38,000 of its customers.
It’s to prevent mistakes like this that the city has decided to upgrade to an automated meter reading system. It’s a big job: the city of Baltimore’s public works department handles the water billing for 410,000 customers.
“I have watched customer complaints closely, and began working with staff to assess the current system and plan improvements both short- and long-term to increase meter reading efficiency and accuracy,” said Alfred Foxx, director of Baltimore’s Public Works department, in a written statement. “It is a big task, but improving customer service must be our number-one priority.”
Baltimore is far from alone. Water districts across the country are upgrading from manual meter-reading systems to automated systems. Both automatic meter reading and advanced metering infrastructure—better known as AMR and AMI—bring several benefits to utilities.
With AMR/AMI technology, utilities no longer have to send crew members into the field to manually read meters, saving time, labor costs, and fuel costs. AMR/AMI technology also results in more accurate water bills. And the technology gives customer service representatives the information they need to help customers sort through billing questions.
This automated technology even gives utilities the means to encourage customers to change their water-consumption habits. Faced with real-time usage data—and possibly coerced with the threat of paying higher rates—customers can be persuaded to lower their consumption of water.
With benefits like these, the question is an obvious one: why haven’t even more municipalities embrace AMR and AMI?
Brian Fiut, senior product manager for water systems at Liberty Lake, WA-based Itron Inc., says that several barriers prevent municipalities from upgrading to AMR or AMI systems.
The obvious one is cost. It is not cheap for municipalities to upgrade manually read meters. But just as important is the fact that AMR/AMI represents new technology to many water districts. And it’s not always easy for districts to make the move to technology with which they are not comfortable.
“It takes effort; it takes vision to make this move,” says Fiut. “You need someone within the utility who can create the awareness that new isn’t necessarily a bad thing. New can be good.”
Other utilities might struggle with AMR/AMI because of worries that their staffers are not technically competent enough to handle the move to a new automated system.
“At smaller utilities, the IT department might be working on servers in the morning and cutting grass in the afternoon,” says Fiut. “As part of the decision to upgrade to AMR or AMI, utilities have to determine if they have the right level of technical competence among their staffers.”
Of course, money does remain the most important barrier for municipalities. Fiut knows this, just as does everyone working in the AMR/AMI industry.
That’s why it’s so important for manufacturers to emphasize not just the immediate cost savings that water districts receive from upgrading to AMI, but the long-term benefits, too.
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3G Mobile AMR works in concert with data management software.
Unfortunately, it can be difficult for AMR/AMI proponents to put a dollar figure on these, often more valuable, long-term benefits.
“When you are making a business case to utilities, it is important to include these intangible business drivers,” says Fiut. “It’s important, too, for the people at utilities who are making these decisions to consider the longer-term, intangible benefits. The executive decision makers have to ascribe value to these benefits. The benefits are abstract by their nature. What is a happy customer worth? But you have to make the effort to include these value drivers in your analysis.”
What are the intangible benefits? Fiut points to improving customer service, measuring the results of district-wide water conservation efforts and managing system integrity in the form of discovering and repairing leaks and broken water mains more quickly.
Consider customer service. This is one area that AMR/AMI proponents point to when discussing the intangible, but important, benefits of AMI.
Say a customer calls a water utility to complain about his bill. This customer says that there is no way that he used so much water last month.
Without AMI, customer service representatives are unable to provide this angry customer with much information. The representative can look at the numbers from last month and the numbers from the month prior and determine that, yes, the customer used more water. But this will hardly convince the disgruntled customer that he actually did use the water for which he is being billed.
However, armed with AMI technology, a customer service representative can zero in on exactly when the angry customer’s water use spiked. Maybe water consumption soared on June 1. The customer might remember, when told this fact, that this was the day on which he filled his backyard swimming pool. If water use rose from April 3 through April 6, he might remember that this was when his grandson accidentally left the backyard hose on.
“Now you are having a rational conversation with your customer,” says Fiut. “The customer is remembering what might have caused his water bill to be so high. When the customer hangs up the phone, he might not be happy, but he will understand why his bill is what it is.”
This is a far better alternative than having an angry customer slamming down his phone because he doesn’t believe that his water utility is charging him accurately.
“What really happens when customers hang up their phones before they are satisfied? They don’t pay their bills,” says Fiut. “Instead of getting paid, utilities now have to spend money to prove that their billing was accurate and to convince their customers to pay. With the new way—with the help of AMI data—utilities build trust and satisfaction with their customers. They protect their revenue streams. If the customers are convinced, they will most likely pay their bills on time.”
It can be difficult to place a dollar value on a satisfied customer. But few utilities would argue that happy customers are not important to their business.
The same holds true with conservation, another of the intangible benefits that water utilities can receive thanks to AMR/AMI systems.
It’s true that many municipalities are fortunate to have plenty of access to water. But others consider drinking water to be a scarce resource. These utilities need to teach their clients to consume less water.
The data secured by AMI systems can help do that.
Scott Williamson, president and chief executive officer of Carrollton, TX-based Capstone Metering, says the key is to provide customers with instant feedback.
With AMI/AMR, water utilities can provide their customers with a log in so that these consumers can immediately access their water consumption data. They can see if they’ve used significantly more water this week than last. They can then take the steps necessary to consume less water.
Maybe, for instance, they’ll see that by leaving their lawn sprinklers on all night, their water consumption jumped significantly. Consumers might make the effort to shut their sprinklers off when the sun goes down, lightening their water bills and conserving water in the process.
“When you get to the AMR/AMI segment, you get an opportunity to provide real feedback to customers. You can give them a good snapshot of what their water consumption looks like,” says Williamson. “Once utilities do that, the odds are much better that their customers will work with them in a natural conservation mode to improve the overall water efficiency of the system.”
Williamson says that he is seeing more water utilities using AMR/AMI technology in this way. But he admits that the movement is still in its early stages. Many water utilities are still barely tapping the full potential of the technology, he states.
And Trevor Hill agrees.
As president and chief executive officer of Global Water, a Phoenix-based company that owns and operates water and wastewater utilities in Arizona, Hill has long advocated that water utilities use AMR/AMI technology to actually change the consumption behavior of their customers.
Unfortunately, he says, most utilities are a long way from doing this. Not nearly enough are relying on AMI to not just collect data, but to use it to tell customers exactly how they can reduce their own water consumption.
Global Water has taken the next step, thanks to its FATHOM suite of technology products designed to bring real-time water-usage data to customers. Through this technology, water utility consumers can log onto their own secure Web portal to see how much water they are actually consuming at any given time.
Customers can also see if they are consuming a significantly higher amount of water than their neighbors. This, Hill says, is one of the most powerful ways to convince customers to use less water. “For some reason, humans seem to react to being told that they are using 25% more water than are their neighbors,” says Hill.
And peer pressure isn’t the only way to change consumer behavior. Hill says that utilities can use real-time consumption data to set price points that could encourage their customers to cut back on their water usage.
Depending on how much water consumers use, they’ll either pay a lower or higher rate. This, Hill says, is also a strong motivator.
“We know that the only way to change customer behavior is through price signals and peer pressure,” says Hill. “But for these two elements, it’s hard to change consumer behavior in meaningful ways. The trick to convincing people to change their behavior is not just to have AMI. Once you have the data, you have to make it available to your consumers. You have to feed it back to them in real time. That is what you need to make a change of any materiality on conservation.”
Hill says that the customers at the utilities run by Global Water are making changes in their water-consumption habits thanks to this real-time data.
Again, price points and peer pressure are doing the trick, Hill says. Customers pay a lot for their water if they consume significantly more water than does the average utility consumer, he says.
“You can see yourself benchmarked in terms of consumption. That’s pretty powerful,” says Hill. “That along with the higher prices we charge for greater consumption have made a dramatic impact on consumer behavior.”
Hill, though, says that not enough utilities are using the data they generate through AMR or AMI technology to change consumer behavior.
The reason for this is simple: Providing real-time water-usage data to customers is far from a simple task.
But Hill does think that it is inevitable that more utilities will start relying on real-time data to conserve their supply of water.
“We know that all utilities will eventually adopt AMI. That means that all of them will have the means of providing customers with more data,” says Hill. “When we get to an era where water becomes sufficiently expensive to start treating water customers like customers for the first time instead of ratepayers, you’ll see things begin to change. As utilities start charging higher rates, I believe that customers will demand more data so that they can manage their own behavior.”
Fiut from Itron also says that utilities can use AMI technology to determine how effective their existing conservation programs are.
For instance, a water district could divide their customers into two groups, a control group and an experimental group. The utility could then erect billboards promoting water conservation, hang pamphlets on doorknobs and run e-mail campaigns targeting customers in the experimental group while doing nothing with those in the control group.
After six months of this, the utility can then rely on data generated by its AMI system to determine if customers in the control group were influenced by conservation efforts to reduce the amount of water they consume. If the utility determines that customers in the experimental group did use significantly less water in the six months, that’s good news: the conservation program is working.
If consumers in the experimental group used the same amount of water or more than did those in the control group, that’s a sign that a utility’s conservation efforts are having no impact.
“If you can measure it, you can conserve it,” says Fiut. “That’s the general rule. With AMI, you have every meter in your system operating as a data logger. Every meter is consistently and reliably providing you with synchronized integral data. The job of AMI is to provide this data in a usable fashion to the conservation officer. This allows the conservation officer to do his or her job much better.”
Brandon Segrest, product marketing manager for data collection systems with Tallassee, AL-based Neptune Technology Group, says that the key to selling AMR and AMI technology to water utilities is to emphasize the cost savings that these systems will bring.
Yes, it costs money for utilities to install this technology. It takes time, too, for utilities to understand how to properly tap the power of these systems. But once utilities pay these upfront costs in time and money, they will start to reap the long-term financial benefits of upgrading to automated systems.
Segrest points to leak detection. Armed with AMI technology, utilities can quickly determine when a significant leak is occurring in their water-distribution system. They can use the technology to track non-revenue water to make sure that all the water that is being distributed is also being billed.
This technology also provides labor savings. Utilities won’t have to send vehicles out to manually read water meters. This frees them up to use their employees to tackle more important tasks.
“And with gas prices getting so expensive, it’s important to keep your vehicles off the road as much as possible,” says Segrest. “If you implement a fixed network, you can read water consumption data without having to incur those costly transportation expenses. Utilities today have limited resources and personnel. The people working at them are juggling multiple tasks. AMI can give them the tools to do their jobs as quickly as possible.”
Convincing utilities that AMR/AMI technology is a wise investment still takes work on the part of the companies that specialize in this field.
For some utilities, in fact, upgrading to an automated system is not a pressing need. Certain small utilities, for example, don’t mind sending crew members out to manually read meters. These utilities may have a relatively small number of customers, meaning that crewmembers aren’t spending too much time in the field reading meters.
At the same time, labor costs in the areas surrounding the country’s smaller utilities are often lower. And if a small utility is located near a large supply of water, it might not need to worry about conservation issues, either.
Municipalities on the other extreme, though—those that face a scarcity of water, serve a lot of customers and must deal with high labor costs—would obviously benefit from upgrading to AMR/AMI technology.
But even some of these utilities need to be convinced of the wisdom of upgrading. They might not have as much money in their budgets as they’d like. In today’s economy, that is far from unusual.
Then there’s the fact that of those utilities who invest in this automated technology, most also make significant changes to the way they do business.
“Utilities who succeed with this don’t just buy AMI or AMR technology, they embrace it,” says Fiut. “This is not just buying a new car and putting it in the garage. You have to redecorate the whole house. This technology has the potential to touch most departments and individuals across the entire enterprise.”
Segrest, though, says that fewer utilities are resisting the move to AMR and infrastructure technology. The benefits of upgrading are simply too powerful to ignore, he said.
“It’s not all cost that is keeping utilities from adopting this technology; some of it is why you still have people out on the streets not using cell phones,” says Segrest. “I saw someone on the street the other day using an old bag cell phone. Some people are just slow to adopt to new technology. You have your early adopters, those who do it as the technology catches on, and then the late adopters. Just about everyone out there, though, is thinking about adopting at least a drive-by AMR solution. It just takes more time for some.”
Some in this field even point to current economic conditions as encouraging more customers to adopt this technology.
“There is a need for more data because the cost of water itself, the electricity usage required to work the pump and move the water, is going up significantly,” says Williamson from Capstone. “When the truck rolls to the meters, and we are at four or five dollars a gallon for diesel, that causes utilities to think more carefully about what they’re doing. When utilities have to send drivers out to turn of someone’s system manually, it causes utilities to think about their need to have more control over their water distribution systems. They want the opportunity to collect that data and to manage and control the system in an automated fashion.”
Dan Rafter is a technical writer and frequent contributor.