ADVANCED ANALYTICS DEPLOYED TO IDENTIFY CUSTOMER METERING INACCURACIES, REDUCE APPARENT WATER LOSS AND PLUG REVENUE LOSS OF OVER $4.3 MILLION
This mid-sized utility located in Orange County, California has long been proactive in encouraging water conservation through regulations and outreach programs. Well over a decade ago, the utility became concerned with ongoing apparent water loss (water that is consumed but not properly measured, accounted or paid for) and the economic, social and environmental costs associated with this issue.
The utility wanted to identify underperforming meters that were resulting in lost revenue, gain real-time awareness of meter health, and speed up replacement on a targeted basis.
Traditional methods for identifying underperforming meters focused on factors such as random testing, age, and water loss balance reviews, usually conducted annually. This approach is inappropriate because meter degradation is not strongly correlated to any of these factors, and replacement strategies based on sampling leave bad meters in the field while throwing perfectly good ones away, making it hard to tackle apparent loss in a capital — efficient way.
The utility has mainly mechanical water meters, with most of the reading done manually and billed on a bimonthly basis. While exploring the expanded use of Automated Meter Infrastructure
(AMI) technology as part of their comprehensive program, the utility wanted a simple method of collecting information and advanced analytics to justify the value of moving to a full system AMI program, in order to reach their desired water and operational efficiency targets.
The utility set out to develop a comprehensive program to quantify the ongoing state of apparent water loss. On average, about 5 percent of retail water is not registered at the meter, or unbilled for, representing approximately 2 percent of a utility’s top-line revenue. Apparent losses are not evenly distributed through the system: only 6-10 percent of meters actually require replacement, adding up to substantial cost savings for the utility if meter replacement is selective and focused on the largest revenue loss meters. The key is understanding which meters are malfunctioning so these can be selectively replaced.
Starting in 2004, with a trial of 10,000 meters, the utility engaged Xylem to apply its Decision Intelligence approach and deploy its Hidden Revenue Locator, an online cloud-based analytics solution that identifies customer meters losing the utility revenue due to meter and data handling inaccuracies. This information allowed the utility to prioritize meter testing and replacement, maximize revenue recovery, and realize operational inefficiencies — all without raising rates.
By deploying the Hidden Revenue Locator solution, the utility identified meter under-registration as the biggest apparent water loss issue — demonstrating that the mechanical meters were registering significantly less water than was flowing through them, likely a result of meter accuracy degrading over time.
In addition to improved accuracy of billing base water charges, the utility was able to obtain information from customer consumption data to detect leaks and to support meter right-sizing — determining if customers have the appropriate size water meter for their usage levels — useful information for efficient water conservation and correct revenue generation.
While the utility continues to plan its AMI pilot, they now have a more comprehensive understanding of their current water meter state thanks to Xylem’s Hidden Revenue Locator.
To date, the Xylem solution has “flagged” over 1800 issues for investigation and identified over 1 billion gallons of apparent water loss. This translates into a historical revenue loss of over $4 million if no action is taken.
The utility is embracing the knowledge and insights gained from implementing the Hidden Revenue Locator program, reflecting their desire to set a new standard for utility water efficiency. They look forward to tracking apparent water loss issues through their AMI pilot, and continuing to take action to resolve significant water issues in their community.
Based on the data and recommendations provided by Xylem, the utility was able to defer capital replacement dollars, identify and address apparent water loss across their system, and focus on other priorities.
That’s the power of decision intelligence.