The case for proactive leak detection

I know of utilities with AMI (Automated Metering Infrastructure) systems who aren’t doing proactive leak detection. My question is why wouldn’t they?

Certainly, an AMI system is the most convenient way to read meters. Unlike using handhelds, or even an AMR system, AMI systems require no labor to collect meter readings for billing. But to view an AMI system as simply a labor-saving meter reading tool is a huge mistake.

Review of AMI technology

AMI systems are preprogrammed to read each meter at set intervals – sometimes only once each day, other times as frequently as several times per hour. These frequent meter readings calculate incremental usages, which can be compared to historic usage patterns for the account. When a large increase in usage is detected and does not return to normal, this generally indicates a leak or other situation requiring the customer’s attention, such as a hung toilet.

What is proactive leak detection?

Using proactive leak detection, a utility with an AMI system monitors the system outputs each day and immediately contacts the customer to alert them to the prolonged excessive usage. This places the responsibility for finding and fixing a leak on the customer. Logically, it only follows, if the utility has immediately notified the customer of a potential leak, the utility now shoulders no responsibility for providing leak adjustments of any sort.

Advantages of proactive leak detection

When potential leaks are being monitored on a daily basis, and the customer rectifies the problem promptly, water is conserved. This is especially important in times of drought or if your utility purchases water for resale from another utility.

Another advantage of proactive leak detection is not having to deal with leak adjustments. For many utilities, leak adjustments can be a time consuming process, involving contacting the customer to provide documentation the leak has been fixed, researching normal usage patterns, performing the calculation to determine the amount of the leak adjustment, and, finally, applying the leak adjustment to the customer’s account. Imagine never having to do another leak adjustment!

Is your leak adjustment policy up-to-date?

Have you implemented an AMI system but still offer leak adjustments? Or has it been a while since you’ve reviewed your leak adjustment policy? If your utility falls into either of these cases, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help.

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© 2018 Gary Sanders

An interesting rate application…

Recently, during a sales presentation, I was presented with a rate scenario I’ve not encountered in my 35 plus years of working with utilities. Rather than billing new accounts activated in the same billing period starting at zero, this utility bills the new account by resuming where the old account maxed out in the rate table. For lack of a better term, I’ve decided to call this a block continuation rate.

For example, consider a hypothetical rate structure with three blocks – the first 3,000 gallons, next 7,000 gallons, and all over 10,000 gallons. If the customer who moved out used 4,000 gallons, and the new customer used 2,000 gallons, the new customer would be billed for their usage at the second tier, not the first tier, as is the practice for most utilities.

Rationale for the rate structure

In the 35 plus years I’ve been involved with utility billing, this is the first case I’ve experienced like this. Admittedly, this utility is a little unique. To provide some background, they only bill semi-annually (that’s every six months) and their rate structure is an increasing block rate as shown below:

They bill using this block continuation methodology so as not to lose revenue, given the length of time between billings and the number of potential new customers each billing period.

Revenue comparison

Below is a chart of the actual charges for two hypothetical customers at the same address, both with identical usage within the six month billing period, billed using both block continuation rates and traditional rates:

This revenue comparison is also plotted in the graph at the top of this newsletter. Up until 3,000 gallons, the two methodologies generate the same revenue, because the usage is all within the first tier. From 4,000 to 7,000 gallons, the rate structures start to diverge, maxing out with a revenue difference of $38.00 (the first 20,000 gallons for the new customer being billed at $1.90 more per thousand gallons using the block continuation rate). From 7,000 to 33,000 gallons, the difference remains $38.00.

I didn’t include it for illustration purposes, but the same thing occurs again with the second block at 34,000 gallons per month for each account, maxing out at 67,000 gallons for an increase in revenue of $248.00.

Multiply these differences by a few hundred new customers in a semi-annual billing period, and this begins to make a difference in revenue for the utility! This utility experiences a significant increase in revenue from using block continuation rates for two reasons – the length of time between billings and the large increases from one rate tier to the next. Billing more frequently with smaller increases between rate tiers wouldn’t have nearly the impact it does in this case.

Do you have unique or creative rates?

If you have seen similar rates, or other unique rate structures, please leave a comment at the end of this post. If you’re wondering how you effective your rates are, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help.

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© 2018 Gary Sanders

How do you deal with public rumors?

If your utility is like most, you’ve probably had to deal with rumors that surface on social media or in general conversation among your customers. If you are employed by a utility that is part of a municipal or county government, you likely have even greater occasion to deal with rumors because your jurisdiction is responsible for more than just utilities.

Does your utility have a way of dealing proactively with rumors?

LinkedIn post

No organization wants false information about them circulating among the general public. So, when I recently saw a LinkedIn post (if you’re a frequent reader of my blog, are active on LinkedIn, and we’re not connected, please send me a connection request) highlighting how a municipality in Georgia deals with rumor control, I was intrigued.

Roswell’s Rumor Page

The City of Roswell, Georgia has a page on their website, entitled Roswell’s Rumor Page, specifically to “eliminate false information and misconceptions by providing our citizens with the facts about issues and concerns within our community.”

Much like popular fact-checking websites, Roswell’s Rumor Page labels each rumor as true or false with an icon and gives a brief explanation on the page. Clicking on each rumor opens another webpage with a fuller explanation.

Do you have a creative way of dealing with rumors?

If you’ve come up with a creative way of dealing with rumors, please leave a comment at the end of this post, so others can learn from your experience.

If you have questions about how your website could improve customer relations, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help.

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© 2018 Gary Sanders

GDPR – what is it and do we need to be concerned about it?

If you’re anything like me, you’ve been inundated with emails over the last few weeks with privacy policy updates from what seems like every site you’ve ever visited. Of course, this isn’t a random occurrence – it is related to the GDPR becoming effective last week.

I recently received an email from a newsletter subscriber asking if I had any information about the GDPR and compliance by local governments. This newsletter is a more in-depth response to what I replied to her.

DISCLAIMER: I am not an attorney and the information here is not intended to serve as legal advice. If you have legal questions concerning compliance with the GDPR, please consult with your attorney. This also is targeted at utilities outside the European Union, specifically in the United States. If your utility is located within the European Union, this may not apply.

What is the GDPR?

GDPR is an acronym for General Data Protection Regulation. The GDPR was passed by the European Union (EU) on April 14, 2016 with an implementation date of May 25, 2018, after which organizations found to be out of compliance can be fined.

The GDPR deals with safeguarding personally identifiable information (PII) and applies to organizations inside and outside the EU. According to the official GDPR website, it applies to “a company established outside the EU offering goods/services (paid or for free) or monitoring the behaviour of individuals in the EU.”

Do we need to worry about the GDPR?

The above cited website goes on to explain that the GDPR does not apply if “your company doesn’t specifically target its services at individuals in the EU, it is not subject to the rules of the GDPR.” Clearly, utilities target their services at customers who live or own property within their service area, not based on where the customer resides.

This article from Government Technology clarifies the issue even better, explaining that, even if your utility has customers who reside in the EU, information you collect for online bill pay or applying for service, for example. would not be subject to the GDPR.

Still responsible for PII of your customers

Of course, this doesn’t mean you have no responsibility for safeguarding personal information of your customers, only that, if my interpretation is correct, you aren’t subject to fines for violating the GDPR.

If you aren’t sure if you are adequately safeguarding your customer’s personal data, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help you determine this.

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© 2018 Gary Sanders

2018 Utility Staffing Survey Results – Part II

This is the second of two consecutive Utility Information Pipelines reporting the results of the 2016 Utility Staffing Survey. 82 utilities, representing 20 states, ranging in size from 134 to 90,000 active accounts participated in the survey.

Last week’s issue summarized the demographics of the survey respondents as well as staffing levels and factors outside the control of the utilities. Today’s issue deals with practices each utility can control, such as payment processing and bill printing.

In addition to asking the number of office employees, how many active customers, what services each utility bills, and annual customer turnover, the survey also asked how each utility handles various labor intensive processes.

Meter Reading Processing

In terms of office staffing, the real distinction in time savings in only between manually entering readings or importing them from some sort of automated reading process. However, unlike two years ago, this year’s survey did distinguish between whether the imported readings were from handhelds or an AMR or AMI system.

As expected, most utilities in the survey have automated their meter reading process. However, this year’s survey included 16 utilities that still enter meter readings, up from only five two years ago. Surprisingly, three of these utilities were in the upper 50% of most efficiently staffed offices. The others were all within the bottom third of least efficiently staffed offices, as represented by the graph below (clicking on any of the graphs will open a larger image in a new window).


 

Bill Printing

Bill printing and the related tasks required for preparing bills for mailing – separating postcards or folding and inserting full page bills, sorting, and traying the mail – are very labor intensive tasks.

Not surprisingly, the top three and 27 of the top 32 most efficiently staffed offices use an outsource printer to print their bills. On the other hand, only four of the 15 least efficiently staffed offices outsource their billing printing.


 

Mail Payment Processing

Mail payment processing is quite possibly the most labor intensive process in most utility offices. For that reason, many utilities have sought to automate the processing of mail payments, either by scanning barcodes on the bill, or using a remittance processing system or a bank lockbox.

As anticipated, 14 of the 15 most efficient utilities automate the mail payment process in some way, while 16 of the 21 least efficient utilities manually enter mail payments.


 

Phone Credit Card Payments

The final area the survey asked about is phone credit card payments. This can be an extremely laborious process considering the customer service representative must look up the account, tell the customer how much is owed, take the credit card number and process the payment authorization and, finally, enter the payment in the system.

Somewhat surprisingly, 5 of the 19 most efficiently staffed offices have a person in the office take phone credit card payments.


 

Is your office adequately staffed?

If you think your utility is understaffed or could operate more efficiently, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help you determine this.
 

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© 2018 Gary Sanders