What’s it going to be…?

Over the course of the past few weeks, I’ve been involved with several customers moving to automated meter reading systems. One customer is migrating to an AMI system and currently reads in thousands of gallons and applies a multiplier to their readings to bill in gallons. Another is implementing an AMR system and reads and bills in hundreds of gallons.

Both are using a contractor to replace their meters, so I asked if either would be changing to reading and billing in gallons and explained this is the ideal time to make the switch.

Why read and bill in gallons?

I’ve written before about a compelling reason for changing to reading and billing in gallons, but with an AMI system, there is an even better reason. If you plan to offer an online portal so your customers can access their daily usage, as the customer moving to AMI does, do you want them to be able to reconcile their daily usage to their billed usage? If you do, then you will have to read and bill in gallons.

What does it take to make the change?

If, like the AMI customer, you are already billing in gallons, just reading in larger units, all you need to do is drop the multiplier on your readings and start reading meters to the gallon.

On the other hand, if you are like the AMR customer and reading and billing in the larger units, you will have to make some changes to your data. These data fields would need to be changed for each account in the system:

  • Previous reading
  • Current reading (if readings have been updated)
  • Usage (if readings have been updated)
  • Any usage history used to calculate the moving average
  • Moving average
  • Number of dials

What’s it going to be…?

If you’re making the change to an automated meter reading system and you’re not already reading and billing in gallons, you have two options – make the change or fall victim to the TTWWADI syndrome. What’s it going to be…?

Holiday spending money

If you missed it in a previous issue, I’m offering two $50.00 Visa gift cards, one to a new subscriber and one to a current subscriber who refers a new subscriber.If you refer a new subscriber between now and 11:59 pm on Thursday, November 15, you will be entered once for each referral. For referrals from outside your organization, you will be entered twice for each new subscriber. Be sure to remind the people you refer to enter your name on the Referred By line when they complete the subscription form.

Are you moving to automated meter reading?

Are you considering moving to an automated meter reading system and wondering how to get started? To find out, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how you could benefit from a business review.

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© 2018 Gary Sanders

What are the potential downsides to an automated meter reading system?

The last Utility Information Pipeline dealt with factors to consider when conducting a Return on Investment (ROI) analysis for implementing an automated meter reading system. In that article, I asked readers who have implemented AMR or AMI systems to share their experiences.

The general manager of a rural water utility, a long-time newsletter subscriber, emailed me and relayed some of the issues his utility has faced in implementing a drive-by automated meter reading system. This issue highlights some of the points he raised, along with issues I’ve heard from other utilities that could be considered potential weaknesses of an automated meter reading system.

Here are some of the potential downsides to implementing an automated meter reading system…

Damage to meters

The utility manager I mentioned above reports that, on average, between .7% and 1.0% of their meters are damaged each month. Damaged meters means incurring repair or replacement costs (which, for some utilities, may be charged to the customer if the customer’s negligence caused the damage). Damaged or malfunctioning meters won’t communicate with the radio receiver, requiring them to be read manually. Of course, this negates any labor savings achieved by automating the process for reading these meters.

Vegetative overgrowth

A frequent complaint of utilities using radio read meters is these meters can become overgrown by grass, weeds, or nearby bushes and shrubs. This poses a problem when the meter must be visited, either for a routine turn-on or turn-off or for disconnection for non-payment.

Faulty meters

Many utilities report receiving defective meters from the meter manufacturer. If this is a manufacturing defect, it can affect many meters received in a single shipment. Defective meters require troubleshooting and, once it has been determined the meter is at fault, replacement. This requires additional time from the utility’s field service personnel, mitigating some of the labor cost savings of not reading manually.

Not “lifting the lid” each month

One of the misgivings I hear most often from utilities about moving to either an AMR or AMI system is each meter is no longer visited each billing period. When reading meters manually or with handhelds, the meter reader must visit every meter (and lift the lid for water meters) each month. This allows the meter reader to visually inspect each meter on the route and note any issues or possible damage to the meter. To mitigate this impact, I know of utilities with a policy of reading a portion of their meters manually each billing period to insure each meter is visited once a year.

Resistance from customers

Some utilities have experienced pushback from customers who consider a meter that measures their usage at frequent intervals to be an invasion of privacy. Others have concerns about the potential health impact of being subjected to additional radio waves. Even though these concerns may be easily dismissed by those who are knowledgeable about radio read systems, they can be very real to your customers. So real that some states require utilities to allow reluctant customers to opt out of having a radio read meter installed at their home.

I’d love to hear your experience

If you’ve upgraded to an automated meter reading system, whether AMR or AMI, I’d love to hear your version of the pros and cons of implementing the system. Please give me a call at 919-232-2320 or email me at gsanders@logicssolutions.com. I’d like to schedule a time to talk with you about your experience.

Is an AMR or AMI system for you?

Are you trying to determine if moving to an automated meter reading system is the right decision for your utility? If so, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a customized ROI analysis or business review could help.

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© 2018 Gary Sanders

How do you justify an automated meter reading system?

Recently, a new newsletter subscriber emailed me and asked “We are searching for any information that would support (or not) investing in radio read meters. Our Board has already voiced the opinion they won’t pay for themselves. Can you offer any advice on various areas of savings/cost you have seen after purchasing and installing such a system?”


Having completed a business review and Return on Investment (ROI) analysis for a municipal water system, this reader’s question made me realize this is a great topic for a newsletter.

If you’ve already upgraded to an AMI or AMR system, please don’t stop reading. You can do me a favor as you’ll see below.

What is an ROI analysis?

An ROI analysis compares the expenses of implementing something new, in this case an automated meter reading system, to the increased revenue and cost savings achieved and derives a pay-back period for the system. Both one-time and recurring expenses and revenues are included in the analysis.

Costs of implementing an AMR/AMI system

The costs associated with implementing an automated meter reading system include:

Purchasing new radio read meters

The single largest cost associated with implementing a radio read metering system is, of course, the new radio read meters. Be sure to take a census of the meter sizes and types currently installed and insure that you are using the proper cost associated with each size or type of meter.

Purchasing new meter boxes or meter box lids, if required

When dealing with water meters, existing meter boxes may be too small or, in some cases, metal meter boxes or lids may interfere with the radio signal.

Labor cost to install the new meters

The second largest cost incurred with implementing radio read meters is the installation of the meters. Will you use an outside contractor or will your field service staff install them?

Purchasing the meter reading software

Don’t forget to include the cost of the new meter reading software. In addition, be sure to include the ongoing annual maintenance for the software as a recurring cost in your ROI analysis.

Upgrading your billing software upgrade, if necessary

Finally, if your billing software isn’t compatible with radio reading, or if you need to purchase an additional module, be sure to include that cost. As with the meter reading software, be sure to include any increase in annual maintenance as a recurring cost.

Increased revenues and cost savings

Increased revenues and cost savings associated with implementing an automated meter reading system include:

Sale of scrap meters

The only one-time revenue source from implementing a radio read system is the sale of the old meters (and meter boxes, if applicable) as scrap.

Revenue gain from new meters

The area most utilities rely on to cost justify a radio read meter system is the increased revenue from installing new meters. Especially with water meters, meters are known to register less usage as they get older. Remember, meters are like people – they slow down with age.

The revenue gain from new meters is also the area where your ROI analysis can be the most deceiving, if you assume revenue increases that don’t materialize. Two areas where your analysis can go wrong are:

  • unreasonable assumptions about how much your existing meters have slowed down
  • rate elasticity – as the price increases, usage decreases

One way to try to insure your assumptions about the inefficiency of your current meters is to conduct a pilot meter replacement policy. This would involve replacing a sampling of meters of different ages and sizes and observing the increase in usage over several billing periods.

If you’ve upgraded to an automated meter reading system and tracked the increased usage from new meters, please give me a call at 919-232-2320 or email me at gsanders@logicssolutions.com. I’d like to schedule a time to talk with you about your experience.

Staff time savings from no longer reading meters

The biggest cost savings associated with implementing a radio read meter system is the reduced time involved in reading meters each month. If you are moving to an AMI system, you will save 100% of the current time, vehicle use, and gas. If you are moving to an AMR system, you will still incur some time and expense for meter readers to drive the routes, but it will be much less than walking the same routes.

Reducing time for re-reads

In theory, a radio read system will provide accurate readings, without the element of human error which is present when using handhelds or reading on paper. In reality, there will always be some meters that aren’t transmitting properly, which will require follow-up from your field service staff. Hopefully, the time to check these non-transmitting meters should be less than what is currently being spent re-reading meters with questionable readings.

Savings from not offering of leak adjustments

If you’re implementing an AMI system and plan to do proactive leak detection, I recommend adopting a policy of not offering leak adjustments. In this case, you will save the lost revenue associated with leak adjustments.

Completing the ROI analysis

Once you’ve arrived at all of your one-time and recurring costs, increased revenues and cost savings, you are ready to complete the ROI analysis. This involves calculating the net up-front cost (one-time expense less one-time revenues) and dividing it by the annual increased revenue and cost savings. The final number will be the payback period in years.

Are you contemplating implementing an AMI system?

Are you wrestling with trying to decide if you can justify moving to an automated meter reading system? If so, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a customized ROI analysis or business review could help.

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© 2018 Gary Sanders

What’s a compound meter?

In the last Utility Information Pipeline, I wrote about the pros and cons of metering individual premises. That article went on to briefly mention the possibly needing a compound meter, if a master meter were to be installed. So, what exactly is a compound meter…?

Compound meters

Compound meters (sometimes referred to as high/low meters because they have high and low flow sides) are used in situations where large volumes of water need to be metered, but at other times slower flows must also be recorded.

Such a scenario could be a large, multi-unit apartment building or a hotel that must be able to meter high usage first thing in the morning, when many residents are showering at the same time, but also measure low flows in the middle of night to record the occasional toilet flush. A manufacturing plant that uses large volumes of water while the plant is in operation, and minimal usage at other times, is another example of a prime candidate for a compound meter.

The Alliance for Water Efficiency has a good, easy to understand description of compound meters in this article.

For billing purposes, with compound meters, two sets of meter readings are taken – a larger meter for the high flows (the “high side”) and another, smaller meter, for the low flows (the “low side”). The usages are then added together and the customer is billed for the combined usage.

Don’t be fooled

The “high side” of a compound meter may not always be the higher reading of the two. The high side could have already rolled over, and have a lower reading, or there could be relatively little high demand. In the latter case, most of the water used would be metered by the “low side”.

Does your billing system support compound meters?

Many older billing systems don’t properly support compound meters. Some require creating two accounts – one for the high side meter and another for the low side meter. Others require manipulating the readings before entering them as a single, combined meter.

If your billing system doesn’t easily handle compound meters, it may be time for a change. If you’re in this situation, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could benefit your utility.

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© 2017 Gary Sanders

Do you or don’t you…?

…meter individual premises?

Many of the ideas for Utility Information Pipeline articles come from personal experience working with utilities. My second best source of ideas is from listservs I subscribe to. This topic falls into the latter category.

Policy deviation question

About a year ago, a listserv question was posed asking about the pros and cons of deviating from the utility’s policy of metering all single family residences individually and allowing a townhouse development to install a master meter. The homeowner’s association would be responsible for the bill for the master meter.

Pros of master metering

Obviously, the big advantage to a single master meter over multiple individual meters is that the utility only has one meter to maintain, read, and bill. Depending on the number of residences in the development, it is also likely a single, larger meter would be less expensive to purchase and install than many individual, smaller meters.

Cons of master metering

The list of disadvantages is a much longer list…

First of all, if you have to turn the water off for non-payment, you don’t have just one angry person, you have many. Even though, in this scenario, the customer is the homeowner’s association, the reality is you have a public relations nightmare and, if you are a local government, many irate citizens.

If you ever have to enact water conservation measures in the event of a drought, a single master meter makes it impossible to determine who is and who isn’t abiding by the conservation restrictions.

Likewise, if there is a leak within a residence, there is no way to know which occupant is experiencing the leak. Similarly, if there is a leak in the piping on the customer’s side of the meter, there is no way to determine where the leak is.

Finally, depending on the number of units and the size of the master meter, a compound meter would most likely be required to accurately register low flows such as toilet flushes in the middle of the night.

Recommendation

My recommendation in this situation would be that the utility not deviate from their policy. After all, isn’t that why you have policies in the first place – to determine how to handle situations like this?

Is it time to update your policies?

If it’s been a while since you’ve updated your policies, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could benefit your utility.

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© 2017 Gary Sanders

Estimated meter reading survey results

If you remember, the last Utility Information Pipeline included a short survey asking how your utility handles estimated meter readings. Readers representing 15 utilities responded to the survey and this issue includes an analysis of their responses.

Primary method of reading meters

The first survey question asked what the utility’s primary method of reading meters is. Here is a graph of those responses (clicking on any of the charts will open a larger graphic in a new window):

As you can see, the overwhelming response was drive-by AMR systems. Based on my experience, I don’t feel this is representative of all utilities, but this is what the survey is based on.

Reasons for estimating meter readings

The second question asked for what reasons do utilities estimate meter readings. Here are the results (the total responses exceed 15 because many utilities estimate for multiple reasons):

I was pleased to see that none of the respondents estimate readings as a routine practice rather than reading each billing period.

Limiting consecutive estimates

The third question asked “If you estimate because of inaccessible meters, do you have a limit to the number of consecutive estimates before you require the occupant to provide access to the meter?”. Here are the responses from the seven utilities that estimate due to inaccessible meters:

Of the five utilities that limit the number of estimates, none allow more than two consecutive estimates before requiring the customer provide access to the meter:

Monthly threshold for estimates

The next question asked if the utility has a monthly threshold for which they consider estimated readings to be excessive. Here are the responses to that question:

If you read the last Utility Information Pipeline, you know this all started because a professional colleague contacted me inquiring if I knew of an industry standard for estimated meter readings.

Surprisingly, only two utilities have a monthly threshold. The good news is they both responded with a threshold of two percent, which is the number I had provided to my colleague.

Creative responses

The final question asked the respondents to describe any creative ways they deal with estimated meter readings.

Most of the responses to this question described the utilities’ policies for calculating estimates, but one response was my favorite…

“When customers refuse to provide access to meters after multiple notifications we increase the estimated amount.”

What better way to get your customer to cooperate and provide access to their meter than to estimate their usage on the high side. We all know customers will respond to a higher than normal bill!

Free rates webinar

I’ve written previously about rates dashboards from the Environmental Finance Center at UNC. This Thursday, March 16 at 2:00pm, staff from the EFC and the North Carolina League of Municipalities will present a free webinar presenting the State of Rates in North Carolina and the 2017 update to the North Carolina Water and Wastewater Rates Dashboard.

Click here to register for the free webinar.

Do your meter reading practices need review?

If you want to reduce the number of estimates, or otherwise improve your meter reading process, please give me a call at 919-232-2320, or email me at gsanders@logicssolutions.com for more information about how a business review could help.

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© 2017 Gary Sanders