Article | April 14, 2020

'Smart' Distribution Strategies Save More Than Just Water

Source: Itron

Water distribution system managers and administrators — whether they are dealing with water scarcity, mandated regulatory compliance, or non-revenue water (NRW) losses — have to be concerned about financial as well as physical solutions. Fortunately, more comprehensive solutions are being developed to afford greater success in both of those areas. Here are several examples of what is being achieved to reduce pressures on utilities and their infrastructure and to assure more equitable water rates for customers.

Whatever the primary drivers — climate-induced water scarcity, aging infrastructure, or increasing population in urban areas — utilities with as little as 20,000 or fewer endpoints are finding new hope for cost-effective solutions. Analytical approaches that can pinpoint the most pressing issues and prioritize better options for both physical remediation and financial backing are delivering better, more palatable alternatives with minimal upfront capital investment.

What’s The Problem?

In terms of NRW, it is estimated that approximately one-third of all water produced by drinking water treatment utilities globally either does not make it to customers or is not properly billed. Even within a given utility, that number can vary significantly in different areas of the system based on the age of the infrastructure.

The problem with that situation is that the reduced revenue is quickly consumed by operating costs and reactive maintenance, leaving little available for proactive approaches to solving NRW and other water distribution problems. That leaves ratepayers stuck with funding NRW costs and leaves the utility stuck in a self-perpetuating cycle of underfunding. As bad as the scenario is in areas with sufficient raw water reserves, the impacts are compounded in regions facing water supply shortages.

What’s The Solution?

There are actually two steps to a solution to such perpetual NRW problems: 1.) data to quantify and pinpoint the sources of NRW losses, and 2.) capital funding to break the costly vicious cycle. Fortunately, market need has sparked new options that address both sides of the historical problem.

  • Data Analytics. Analytical software can capitalize on both historical and real-time data to forecast certain parameters in the distribution system and help operational managers conduct ‘what if’ modeling. This includes comparative analyses to spot trends and anomalies, complete with custom reports that provide greater insight for areas of particular interest. Such capabilities help operational managers unlock collected data and transform it into actionable data by enabling insights for managing systems holistically instead of just operating individual pumps or valves as isolated aspects of system performance (Figure 1).

Photos courtesy of Itron

Figure 1. Seeing infrastructure performance and problem areas in geographic and graphic displays helps water system operators gain a quick appreciation of system performance and empowers them to make better informed decisions to stop NRW losses. 

  • Subscription Payments. Under this scenario, a water distribution services provider will arrange for all hardware, software, and services to identify, quantify, and pinpoint the issues causing NRW losses. This enables a municipality or private utility to start plugging revenue-draining loopholes on a pay-as-they-go basis through a monthly subscription fee. The provider supplies the expertise and the means to leverage solutions without forcing the utility to come up with a large capital investment.
  • Performance-Based Contracting. Another funding alternative is to enter into a performance-based contract with a single-source solution where the vendor assumes responsibility for delivering key service-level agreements and earns a share of the revenue generated from identifying and fixing the leaks and improving meter accuracy.
  • Financial Assistance. If a utility needs help lining up funding, working with water distribution specialists having insight into available grants and funding resources can help pave the way to more sustainable financial operations.

Focus On Proactive Analytical Insight, Not Just Routine Reporting

For utilities that have long suffered under financial pressures that make attacking real and apparent NRW losses so difficult, working with an organization that has already solved many variations of the same problem can be invaluable. Whichever financial approach is taken, having experienced partners to execute a turnkey solution can make the difference needed to move the process forward. That includes monitoring and addressing key infrastructure factors, such as:

  • Individual Meters. In the case where aging meters have simply become inaccurate, or where the meter was improperly sized in the first place, identifying such locations provides an instant boost to the revenue side of the ledger.
  • District Metered Areas (DMAs). Many North American utilities do not currently utilize DMAs, but the potential revenue to be gained from reining in NRW might be enough to justify DMA adoption. By effectively isolating areas of the network to allow for continuous monitoring of these areas, it is easier to identify leaks or underbilling and correct those revenue-draining inefficiencies. It can even help to identify opportunities for more efficient pressure management that can reduce pump energy requirements and relieve stress on aging infrastructure to extend useful life.
  • Operations And Maintenance (O&M). Better monitoring and analysis can also help utilities optimize O&M practices:
  • Identifying areas with excessive pressure that can waste energy and stress aging infrastructure helps utilities reduce both costs and risks through pressure optimization.
  • Implementing a general infrastructure and maintenance program that prioritizes maintenance needs of aging piping, valves, and other infrastructure can target the best use of limited O&M funding.
  • Better needs identification can also help to reduce the rate of occurrence for costly service disruptions, emergency repairs, and boil-water notices, thereby freeing up more budget to protect overall system health.

Finding The Right Motivation Is Key

Utilities have historically struggled with issues such as NRW because of the perceived costs of addressing them. With new mandates changing, and less-capital-intensive financial options for doing so, motivated operational managers and decision-makers should focus on:

  • Regulatory Implications. In some cases, utilities cannot address rate increases until they meet specific key performance indicators (KPIs) in their distribution operations.
  • Financial Flexibility. Once the onerous burden of upfront capital investment is lifted, more flexible financial approaches that pay for themselves can be evaluated and implemented.
  • Performance Efficiency. Analytics that can model future performance levels and revenues based on statistical modeling of historical data can guide the way to the most cost-effective performance changes — whether they are adopted due to regulatory KPIs, drought-related water allocations, or chronically underfunded budgets due to NRW losses.

Here are just a few examples of how utilities around the world have benefitted from a change in their approaches to NRW and operational practices.

  • United States. A utility with 31 miles of service lines and 518 miles of 2.5” water mains was able to reduce NRW by 15 percent in less than nine months.
  • United States. By employing AMI and acoustic leak detection with analytics software, a 100,000-customer utility was able to save more than 100 million gallons of NRW water per year.
  • Italy. A utility with 254,000 water connections in three monitored sectors was able to decrease total water losses — real and apparent — by 50 percent and cut NRW by 20 percent.
  • Brazil. A water supplier was able to save 264 million gallons annually while reducing customer complaints by 50 percent, thanks to better operational visibility.

Jeff McCracken, P.E.

Director of Operations Management Outcomes, Itron

In his role, he is responsible for productizing and delivering value-based outcomes to utilities such as revenue assurance, AMI operations, gas distribution & safety, water operations management, and IoT sensing solutions. Jeff attended Clemson University where he received his B.S. in Civil Engineering. He is also a registered Professional Engineer.

Peter Cheung, Eng. PhD.

Senior Product Manager, Operations Management Outcomes, Itron

Peter Cheung supports global water business development and is responsible for creating and validating methods based on optimization techniques, data mining and data analytics applied to water operations management. He has more than fifteen years of experience coordinating Non-Revenue Water utility projects in Latin America. Prior to his current role, Cheung created cloud-based analytics engines to improve operational efficiency in water distribution systems, which are currently embedded Itron’s Water Operation Management (WOM) offering. Cheung holds a Bachelor of Science in Civil Engineering and Master of Science in Hydraulic Engineering from Federal University of Mato Grosso do Sul, as well as a PhD in Hydraulic and Environmental Engineering from the University of São Paulo, Brazil. 

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