Smart Metering for Water Utilities


For most water utilities, the most important smart metering benefit is the role it can play in conservation.  Utilities can appropriately value some aspects of conservation, such as the effects on chemical use and equipment at water treatment plants.  Oracle’s staff of utility experts can provide extensive advice and guidance on smart metering pilots and projects.

This paper explores the use of consumption metering to provide water utilities and their customers with new information and conservation techniques.

Should water utilities replace current consumption meters with “Smart Metering” systems that provide more information to both utilities and customers?

This question is being hotly debated in today’s electric utility industry. It appears currently of less interest in the water industry. But as drought and population growth sharpen the focus on water issues, experts are increasing looking at Smart Metering as a possible contribution to long-term supply.

In today’s global water industry, Smart Metering generally indicates the presence of one or more of the following

  • Interval meters that measure consumption during specific time periods and communicate it to the utility at least daily. While in the electric industry, those intervals can be as short as every 15 minutes, water intervals are generally an hour or longer.
  • A communications channel that permits the utility, at a minimum, to obtain meter reads on demand, to ascertain whether water has recently been flowing through the meter and onto the premises, and to issue commands to the meter to perform specific tasks such as disconnecting or restricting water flow.
  • The Smart Metering term in the water industry may also include:
    • An on-premises display easily read by customers. These can help customers check for leaks, reduce consumption, and monitor compliance with local restrictions.
    • A stand-alone data collection and processing software, such as a meter data management application. This isolates the existing billing system from the increasing meter data volumes that smart metering introduces.

Smart Metering is more than mere Automatic Meter Reading (AMR). In AMR, meters communicate their monthly or daily consumption totals to a central collector using one of a number of different communications techniques, such as radio signals, power-line communications, or satellite reads. In other words, they do nothing more than replace house-to-house meter readers with some sort of centralized collection. Smart Metering uses more robust communications channels controlled from a central point and readily available on demand. It accommodates interval data collection and facilitates delivery of a wide variety of services, such as remote disconnects and checks to ensure that service is currently available.

Information to the Customer

Display devices that show water use in real time help customers detect leaks. While diligent customers may, a few times a year, turn off all water and check an outside meter to ensure there is no flow, most meters are deliberately located in out-of-theway areas that make it hard to detect new, small leaks. A conveniently located onpremises monitor can help a customer notice a leak because, for instance, the reading is higher in the morning than it was at night even though in theory no water was used in the interim.

Displays serve as a constant reminder about the need for water conservation. They can help parents instill water-conservation habits in children. They also enable jurisdictions to win customer compliance with water-use advisories or restrictions, such as a weekly maximum use per occupant.

Preliminary investigation indicates that customers with displays are more likely to use less water. Displays tailored to the specific needs of the user, such as those comparing current water use with neighborhood averages or with consumption in previous months, may help consumers further focus on conservation. Currently, however, displays are almost entirely voluntary and thus used almost entirely by those interested in conserving water. Information about the long-term effects of mandatory display equipment on consumption is not readily available.

Information to the Utility
Utilities can use time-of-use or interval data to:

  • Detect customer-premises leaks. If a utility using hourly intervals, for instance, finds customers whose usage never drops to zero, there is almost certainly a leaking appliance or pipe on the premises. Many customers know, for instance, about a dripping faucet, but notification from the utility pointing out the cost and long-term community implications can encourage repair. Utility notifications to customers unaware of leaks will likely get swift action from property owners concerned about damage to walls and foundations. Note that in regions with competitive or partially competitive utility markets, utilities can use this leak detection ability to upsell leak insurance to property owners.
  • Detect small leaks in mains. A utility comparing a day’s consumption for a group of customers (such as residences on a block) with readings from a water main serving that block may be able to identify small leaks (or possibly theft) before they become too large to be overlooked.
  • Identify the location and extent of a water main break. This is particularly the case when meters can activate the communication link to the utility and send “last gasp” messages when they detect a significant drop in pressure.
  • Monitor compliance with local water restrictions against, for instance, outdoor watering or non-essential water use during daylight hours. Methods to accomplish this vary regionally. In areas where outdoor water use generally does not occur in the winter, it is a relatively simple matter to compare a week’s worth of winter and summer consumption. Restrictions against water uses that could take place almost any time may require more sophisticated sampling, such as comparisons that use water consumption on days when outdoor temperatures are at or below freezing.

The utility’s ability to detect leaks is, in some regions, becoming a major financial factor for utilities. Regulators concerned about reducing water waste may establish performance-based incentives for utilities to reduce water loss. The faster utilities can detect, size, and prioritize repairs for leaks, the greater their ability will be to earn these incentives.

Utility Cost-Cutting Initiatives
Utilities can use Smart Metering to:

  • Obtain off-cycle, “final” meter reads for customers moving or leaving the area. It is common to couple these real-time final meter reads with web sites for on-line bill payment or with call centers that accept payment over the phone. Utilities frequently find it is easier and less costly to obtain rapid final payments from customers before they leave the area.
  • Remotely disconnect or restrict the flow of meters in regions where this is permitted.1 These reduce the costs to send field crews to the premises of customers who have either requested a disconnect or who are being disconnected (or ratcheted back) for bill nonpayment.
  • Check meter status (“ping the meter”) prior to sending a repair crew in response to a customer call. These checks can sometimes prevent needless field crew dispatch to customer sites where problems are not the utility’s responsibility.
  • Remotely-detect theft.
  • Ensure that almost all bills are based on actual meter reads rather than on estimates; this reduces calls to the contact center and improves customer satisfaction.
  • Help control electricity costs. This applies to utilities that pump water to a high point to take advantage of gravity feeds. Attempts to limit pumping to times of off-peak electricity rates can be thwarted, however, by consumers who use water imprudently during the day. Advanced water meters minimize this problem by enabling pricing structures that discourage excess on-peak water consumption.

New Products and Services
Smart Metering systems can frequently accommodate prepayment meters with multiple options for payment, such as recharging or via Internet or telephone, and with emergency overrides. Some utilities are looking at the possibility that a single prepayment meter for gas, water, and electricity may bring down the total cost of prepayment and permit utilities to respond cost-effectively to an option many consumers request as a tool to help them budget.

Locating System Intelligence

There is a continuing debate in the utility industry as to whether smart metering intelligence should be distributed or centralized.

Initial discussions of advanced metering tended to assume intelligence embedded in meters. Distributed intelligence seemed part of a trend, like “smart cards,” “smart locks,” and scores of other everyday devices with embedded computing that empowers consumers.

Embedding intelligence in the meter also made sense in an era when utilities traditionally handled meter data within the billing system. While some of today’s robust billing applications are capable of handling the increase in data volume, it may be more efficient to handle the data demands of non-billing departments separately from the billing system.

Of course, placing intelligence in the meter may be equally or more costly.

Industry consensus appears to be coming down on the side of centralized intelligence. Why? Because while data processing for purposes of interval billing can take place in either distributed or central locations, other applications, like leak detection or long-term supply analysis, generally cannot.

Handling Data Volume
Smart Metering inevitably increases the amount of meter data utilities must handle. In the residential arena, for instance, hour-long intervals that replace monthly consumption totals replace 12 annual reads per customer with 8,760. That’s a 730-fold increase.

What hardware and software can handle that volume? And what new procedures will ensure that data processing flows smoothly?

The answers to those questions spring in part from current utility organizations. In most utilities today, billing departments “own” metering data because the primary use of monthly consumption is to bill customers. While other departments have sought data access, few legacy billing systems were able to provide it in the time or form needed.

Modern billing systems can more easily provide data to other departments. But the pressure to do so in a timely and complete manner increases when a utility moves to interval metering. Departments using the data to address leaks, conservation, and supply issues cannot wait for days or weeks for the billing system to supply the needed data. At the same time, forcing the billing department to respond quickly to demands of other departments may slow bill production and the associated utility cash flow.

Meter Data Management
An alternative way to handle data volume and multiple data requests is to offload it into a stand-alone meter data management (MDM) application.

MDM gathers and stores meter data. It can also perform the preliminary processing required for different departments and programs. Most important, MDM gives all units equal access to commonly held meter data resources.

Meter data management provides an easy pathway between data and the multiple applications and departments that need it. It can more easily consolidate and integrate data from multiple meter types. It can reduce the cost of building and maintaining application interfaces.

MDM’s independent service function may be further refined through the addition of a meter data warehouse. In situations where both exist, the MDM typically manages real-time, transactional processing while the warehouse handles data extraction, reporting, and analytical processing.

Separating the MDM from the billing solution has clear advantages. It maintains bill production efficiency while providing even-handed data access to all departments. It permits a utility to add security to meter communications and data without complicating customer access to bill payment and analysis websites. And it lets utilities change the source of the meter data with no negative effect on other IT systems and architecture.

UtiliPoint analyst Patti Harper- Slaboszewicz maintains four key elements of MDM must be present for the product to be called MDM:

  • The functionality must be offered as a stand-alone product and not only as part of the vendor-specific CIS/ABS and/or AMI head-end system.
  • The stand-alone product must be able to accept meter readings from any meter data collection method (or the vendor must be able to develop an interface within a reasonable amount of time).
  • The stand-alone product must be able to interface, with two-way data sharing, with any utility legacy or vendor supplied CIS, outage management, work force management, GIS, or other key utility IT system (or the vendor must be able to develop an interface within a reasonable amount of time.)
  • The data must be persistent, and versioned.

The IT Implications of Meter Data Management
MDM is, for most utilities, a new type of application. It shatters the typical utility IT model in which each department “owns” its own set of applications. MDM treats every department as its “owner.” It thus forces departments to work together. If MDM is to serve all equally efficiently, then the various stakeholders must share information. They must agree to application configurations that serve all needs optimally.

This process of information sharing is proving eye opening to departmental heads. Suddenly, sharp minds have the knowledge and tools to propose better, more efficient program administration.

In other words, MDM is becoming an avenue for rethinking utility business processes independent of existing departmental boundaries. It is the first major utility silo-breaking application.

Expanding the Concept
MDM, by providing both unique and common resources to multiple applications, has the potential to advance the quest for multi-departmental business process orchestration. If it succeeds in this role—as it very likely will—other functions may quickly follow suit. Scheduling, for instance, might be pulled out of asset management, field management, and appointment setting and consolidated into a single instance that serves multiple departments.

Multi-departmental applications like MDM, owned cooperatively among departments rather than individually, could thus be the “missing link” to facilitate the smooth flow of business processes across the organization. They could prove a process orchestration concept that increases the efficiency with which utilities serve all stakeholders.

While discussion of smart metering abounds, many utilities hesitate when they see the large financial commitments involved and the uncertainties of customer response. Will they be able to recover the costs? Will they find themselves on the bleeding rather than leading edge of technology?

There are ways, however, to mitigate the risks involved.

Including All Potential Benefits
Smart metering may be hard to cost justify if it rests solely on customer acceptance of demand response. It is easier to cost-justify when it includes, for instance, the value of:

  • Ensuring that all meters are recording water flow following repair of a break in a main.
  • Remote programming that enables customers to use new products that might be offered by the utility or by a third party. Fewer meter readers, which means lower total costs for salary, benefits, and workers’ compensation.
  • Remote rather than expensive and occasionally risky on-site disconnects or flow restrictions.
  • Less wasted time in attempts to pinpoint the size and source of leaks and breaks.
  • Lower risk to public safety from flooded intersections or lack of service to hydrants.
  • Better accuracy in the actual meter readings, resulting in fewer calls to the contact center.
  • Faster theft detection.
  • Lower electricity costs (for those utilities attempting to limit pumping to off-peak use).
  • Reduced use of chemicals currently used to treat water that is then wasted through leakage from water mains or via customer-premises leaks from pipes or fixtures.
  • Longer lifespans for water treatment equipment.

Valuing Conservation
For most water utilities, the most important Smart Metering benefit is the role it can play in conservation. Utilities can appropriately value some aspects of conservation, such as the effects on chemical use and equipment at water treatment plants.

As governments and citizens become increasingly conscious of the potential for water shortages, however, many want to place a prominent and clearer value on conservation. The past provides few answers. Few jurisdictions have monetized the value of not depleting aquifers faster than their natural refresh rate; yet the impact of such depletion is potentially devastating. What would any jurisdiction pay to avoid the 2007 situation of Atlanta in the U.S., which found that drought, population growth, and overuse had depleted its water reserve to three months?

Electric and gas utilities frequently have a difficult time persuading regulators (and, in competitive markets, retailers and customers) of the value of conservation in terms of its effects on air and water pollution. The average consumer probably finds it difficult to equate turning on the television with polluting the air. That is less likely to be the case with water, however, where the connection between wasting water and water supply depletion is increasingly difficult to ignore.

That does not mean, of course, that water utilities can gain approval for Smart Metering merely by invoking conservation. It does mean, however, that regulators are more likely to accept arguments that Smart Metering can reduce regional consumption by a certain volume or slow depletion by a specific percentage without necessarily requiring utilities to make the argument in strictly financial terms.

Oracle’s staff of utility experts can provide extensive advice and guidance on Smart Metering pilots and projects, based on the experience of working on such projects with customers around the globe.

Oracle also provides software applications that can form the heart of a Smart Metering system:

  • Oracle Utilities Customer Care and Billing is a complete billing and customer care application for utilities serving residential, commercial, and industrial customers. It can handle all Smart Metering programs for some or all customer classes on a stand-alone basis or in conjunction with a Meter Data Management application.
  • Oracle Utilities Meter Data Management decouples the handling of meter data from other mission-critical utility operations. This permits all other applications to receive the information they need in the format needed while speeding such time-critical operations as network repair.
  • Oracle Siebel Customer Relationship Management can help those utilities moving to Smart Metering but unable to replace the current billing system. It can track customer participation in various Smart Metering programs, gauge market response to various incentives for program membership, identify prospective customers for various programs, and analyze program results. Utilities using Oracle’s E-Business Suite, PeopleSoft, or J.D. Edwards enterprise applications have additional suite-specific customer relationship management options for handling these tasks.
  • Oracle Utilities Customer Self-Service helps customers maximize the benefits of Smart Metering by providing ways to display and analyze consumption in near-real-time via a personalized website. These websites can also provide advice tailored to a customer’s circumstances and objectives.
  • Oracle Utilities Mobile Workforce Management ensures that field crews and dispatchers use all of the data provided by Smart Metering to reduce the number of unnecessary service calls.
  • Oracle’s Asset Management applications help utilities track and compare the performance of various brands and types of Smart Metering equipment. They also ensure that warranties remain in effect and that field crews arrive for Smart Metering repairs with the right equipment and the right people to complete the task.
  • Oracle Projects can help manage the deployment of meters and other equipment essential to Smart Metering programs.
  • Oracle’s Business Intelligence applications ease the process of tracking project and program performance objectives and help utilities readily answer questions from customers, program managers, utility executives, and other stakeholders, such as investors, regulators, and regional governments.
  • Oracle Spatial maximizes the use of geographic information within the Smart Metering context. It fosters map-based tracking of meter location. It aids in understanding the geographic market penetration of new programs like Demand-Response. By facilitating map-based presentations of Smart Metering data analyses, Oracle Spatial significantly speeds analysts’ comprehension of their data and their ability to present complex concepts to audiences of varying interests and analytic backgrounds.
  • The Oracle 11g Database, Fusion Middleware and associated Enterprise Manager products address such compelling IS infrastructure needs as:
    • Security of both data and user access throughout the data collection and processing processes, to ensure confidentiality of both customer data and utility operations.
    • Comprehensive business system management to ensure high operational service levels, pro-actively identify issues, and resolve them.
    • Data management scalability and the ability to deliver a consistent performance, even at very large data volumes of tens or hundreds of terabytes.
    • High availability to guarantee data collection / validation / aggregation and thereby support time-critical Smart Metering applications.
    • Use of an Enterprise Service Bus for rapid and cost effective service orientated architecture integration of meter data with other systems.
    • Flexibility to rapidly configure and deliver when circumstances change—in essence, “future proofing” your long-term investment in Smart Metering and in Oracle.

Oracle works closely with communications and metering partners to ensure seamless project planning and pre-integration of solution components.

There is every reason to believe that Smart Metering will replace most of today’s electromechanical metering approaches within the foreseeable future. At today’s prices, many utilities are constructing conservative business cases that foresee a relatively short five- to six-year payback period for Smart Metering investments. Rapidly falling prices and the multiple advantages to both customers and utilities should make the systems even more compelling.

As a result, prudent utilities worldwide are increasingly factoring Smart Metering into long-term IT and customer-program strategies.