The Surprising Money-Saving Solution For Utilities

At first glance, promoting conservation would seem like a poor financial decision for utilities to make. Less water use equals less money right?

Wrong, says Peter Yolles, the creator of WaterSmart, a cloud-based software system that turns meter data into a water conservation campaign for utilities.

In areas with dwindling or unreliable water supplies, utilities often turn to importing surface water, recycling wastewater, or desalinating brackish or seawater — all expensive options. Even in areas without water shortages, rising water consumption means more to treat, pump, and distribute, which increases labor requirements and expenses for a utility and shortens the lifespans of water infrastructure.

To cut costs, a conservation program should be part of the overall water supply solution.

“Think of WaterSmart like a virtual reservoir for utilities that are working to diversify and have many sources of water to improve reliability, reduce the cost of their water, and reduce future capital expenditures,” said Yolles. “We are providing utilities with a new source of water at the lowest cost possible in the most environmentally advantageous way, because you don’t have to buy or build a new water supply.”

WaterSmart combines meter readings, real estate, geographic, and climate data to create a monthly water use profile for each household in a utility’s service area. Each month, WaterSmart ratepayers receive a report showing their total water use in gallons — a more easily understandable format than the hundred cubic foot units many utilities typically utilize  — broken down by how they used it. These numbers appear side-by-side with data from other similarly sized homes in the area that have the same number of occupants in the household and acreage of land.  The report also includes three suggested water savings measures, customized by the household’s data.

“If we know that most of their water is used outdoors, for example, WaterSmart will suggest they do something like install a weather-based irrigation control system or put in native landscaping,” explains Yolles.  “We have 100 different recommendations, and we simplify those down to just three for each water report, based on what we know about the home, what time of year it is, and the utility’s goals.”

The information ratepayers receive about other households is based on averages and is anonymous, so everyone’s privacy is protected. This method of social comparison, known as “behavioral efficiency,” has been successfully used in other industries including electrical power, but WaterSmart is the first to try it in water.

“People are constantly aware of how people are behaving around them and want to fit into that,” says Yolles. “But it has always been hard to understand how people are using water. We are creating a social norm for water.”

So far the program has been successful. . The first utility joined  in 2011, and today 25 utilities serving over 200,000 homes in California, Utah, Colorado, and Texas are utilizing the WaterSmart system. The average WaterSmart ratepayer uses 5 percent less water after six months of receiving the reports. Yolles expects the long-term results to be even more significant for both customers and utilities. All of the utilities that have joined the program since its creation have renewed their contract each year.

In addition to the monetary savings, the WaterSmart program has improved customer relations for utilities that are using it.

“Engaging customers is really important for water utilities, and historically they have not done a terrific job,” says Yolles.  “WaterSmart customers are more likely to have a higher level of trust in their utility.”

Yolles has found that people that receive WaterSmart reports are twice as likely to rate their utility as excellent and three times more likely to participate in utility programs. He feels that when it comes to voting for water board members or even to raising rates, customers that are more engaged with their utility via WaterSmart are more likely to vote in their utility’s favor.

Although the program is currently only utilized in four states, Yolles hopes to expand it in the near future. Water conservation is a pressing need, he says, one that won’t go away anytime soon.

“We are in the midst of a historic drought, and communities across the country are wondering how water will come out of the tap without some drastic action,” he says.  “People want to do what they can to beat the drought, and WaterSmart can help them do that.”