Clare Pierson: Please summarize how water utilities begin justifying and selecting the right AMR/AMI solution.
Don Schlenger: The choice of metering technology is tied to deployment strategy, and these both affect the business case. For example, deploying a metering system on large customers scattered throughout the service area first affects which technologies are most economical. Ultimately, these decisions should be based on the data required to provide certain services for various customers, both external and internal. The services should be tied to the utility’s goals and objectives, such as conservation or enhanced customer service.
Pierson: What is your definition of a “smart grid?” Why is it optimal, and will it be necessary in the near future?
Schlenger: In the electric utility industry, smart grid is an aggregate term applied to a collection of technologies and operational practices, including advanced metering systems; wide-area monitoring and analytical systems; time-of-use and real-time pricing tools; advanced switches and cables; smart appliances; communications technologies; and databases to store and analyze huge volumes of consumption information. Smart grid will provide the technology to enable the utility and its customers to become partners in managing the supply-demand relationship. This should increase energy efficiency and reliability, lowering costs and improving service.
Smart grid investments have implications for water utilities because they are major users of energy. Many of the electric smart grid concepts can be applied to water systems, including smart metering and demand response; distribution system sensors for pressure, leaks and even water quality; remote controlled service line shut-offs; and energy management. Some water utilities are beginning to speak in terms of “smart pipes.”
Pierson: What is the biggest challenge water plants or utilities face in implementing a smart grid system?
Schlenger: Although AMI for water utilities is well established, it is evolving rapidly. Business case models for advanced applications need more development. Smart pipes applications for leak detection and distribution system monitoring are expensive or still unproven, and in lean economic conditions, it may be difficult to cost-justify these technologies.
Pierson: Has the stimulus package spurred any more or less interest from utilities in implementing AMR/AMI?
Schlenger: While a number of water utilities sought ARRA stimulus money for AMI projects, little of the stimulus money went to such projects in the first round of funding. Metering unmetered customers and increasing conservation in drought-plagued areas were given priority. Many utilities hope to do better in subsequent rounds of funding.
Pierson: It seems like one of the few options utilities are left with when planning to implement AMR/AMI, smart grid or other vital upgrades is raising water rates for customers. Do you see any alternatives to this, or are increased rates inevitable?
Schlenger: Most water AMI projects can generate significant operating-cost savings and have been justified with rigorous benefit/costs analyses, so they haven’t put much pressure on rates. AMI and other systems that enable the water utility to improve its load factors (that is, reducing peak to average ratios) or recover nonrevenue water may be able to defer some capital construction. This will also help avoid pressure for rate increases.
AMI/AMR can benefit the consumers by providing them their own consumption data, often on an individual Web page for each customer. Some utilities monitor consumption data, notifying customers about high consumption before they get a bill. Soon, AMI will help customers create and manage household water budgets.