Replacements for Revenue

Feb. 21, 2008

About the author: Andre Noel is senior marketing manager, meters, for Neptune. Noel can be reached at 334.283.7298.

In 2005, nonrevenue water levels for the West Springfield, Mass., water system rose above 17%. Faced with such significant revenue losses, West Springfield decided to perform a comprehensive analysis of its system, focusing primarily on customers using large industrial, commercial and institutional (ICI) meters.

The city partnered with Ti-Sales, Inc. to complete a statistical evaluation enhancement of revenue (SEER) analysis on its ICI meters. The SEER tool enabled West Springfield to pinpoint problem areas and put together an appropriate plan of action for addressing them. Ti-Sales ran an initial analysis of the system’s 10 largest meters, a process that took only three hours to complete and immediately pointed to the need for new large meters to adequately address the nonrevenue water problem.

Considering Change-Out

The city then selected Northeast Meter Solutions to survey and catalog all of its installed ICI meters. Northeast utilized a rating system where each ICI installation was judged based on criteria such as stopped or “nonworking” meters, meter accessibility and installation condition. The survey, which took six months to complete, indicated that the largest meters should be replaced first, followed by the oldest meters. Rightsizing was also recommended for many meters in West Springfield’s system.

With information in hand from the overall SEER analysis of 220 meters, West Springfield staff was able to put together a list of recommendations for improving efficiency. It was estimated that these improvements could result in an increase in revenue of up to $250,000 per year. This estimate did not take into account the stopped meters, meaning that the actual annual revenue increase could be greater.

The total cost of the proposed change-out project, including new meters and installation, was $750,000. With the projected revenue increase, West Springfield saw the potential to pay for the project through its recouped costs in as little as three years. Accordingly, the system’s officials recommended a three-year, $250,000-per-year project, which was approved.

Project Outcomes

The project began in the spring of 2006 and has culminated in the replacement of 332 large meters to date. Among the immediate results:

  • An overall decrease in water usage.
  • Unbilled accounts are now being correctly billed.
  • Stopped meters have been replaced.
  • A number of billing system corrections have been made, including the number of digits used for large commercial accounts.
  • Proper meter installations for each application (i.e., compound vs. turbine).
  • The rightsizing of meters.
  • Increased revenue (up to 60% in some accounts).

Because of the immediate and impressive results, West Springfield accelerated its original three-year plan to be completed in two years. The resultant increase in revenue allowed the system to upgrade its meter reading technology while changing out the meters. All large meters installed to date are equipped with a Neptune R900 radio frequency meter interface unit.

The ability to accurately track usage from its large meter customers has increased West Springfield’s revenue, allowing it to become completely self-sufficient. The system is now able to move forward with capital projects that, in the past, it was unable to consider. Residential projects such as a radio frequency technology program have been installed, and a new, proactive large-meter maintenance program is in place. All of this has been accomplished while maintaining current water rates.

“When you’re looking for nonrevenue water and revenue enhancement, start with SEER,” said Jeff Auer, West Springfield water superintendent. “Everything else will fall into place.”

Thanks in large part to a staff that is forward-thinking and innovative, the West Springfield water system is now in an ideal position to move ahead with increased revenue and, most importantly, better service to its customers.

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About the Author

Andre Noel

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