Ms. Dorothy Mabuza

Divisional head: Water Quality and Revenue Management

Ekurhuleni Metropolitan Municipality

South Africa

THE EVOLUTION OF WATER METERING

TECHNOLOGY AND THE SELECTION PROCESS

Contents of presentation

• Introduction

• Water business value chain

• Vaal river system: EMM Status quo

• Principles of a WDM strategy

• Metering value chain

• Catalysts to metering

• Evolution of metering technology

• Selection process mapping

• An approach to adopting new meter technologies

Introduction

• The South African Constitution states that everyone has the right to have access to sufficient water (RSA, 1996).

• South African households with access to potable water increased from 84,5% in 2002 to 89,5% in 2011 (Stats SA, 2011).

• To reach NRW acceptably “good” levels as per the IWA barometer; water losses and unbilled authorised consumption must aggressively be addressed.

• Meters are deemed to be cash registers for Water utilities with the premise that revenue is generated through efficient billing.

Water business value chain extract from TCTA

VAAL RIVER SYSTEM: EMM Status quo

• Current water demand exceeds supply

• RW has exceeded its license quotas and can’t be extended further (at least for now)

• Reduction of demands by Municipalities recommended

• High water losses

• Technical losses

• Non Technical losses

• Ageing and continuously ageing meters

• Revenue projections more than actual

• Interim readings: remains a challenge

• Non-payment of services in low income HH

• NRW @ 36.8% (Feb 2015)

VAAL RIVER SYSTEM: EMM Status quo

• The cost of procuring water from Rand Water (including the water

research levy) is R6.00 / kiloliter, and EMM’s water demand is

357 640 839 kiloliters per annum (2013/2014). Therefore the cost to

EMM of procuring water is R1.981 billion / annum (2013/2014).

• Income from water tariffs is R2.669 billion / annum (2013/2014

financial year).

• By-laws for water meters to be read at least 4 times a year.

• A provision is made to bill on interim consumption calculated at a

fixed tariff rate and later on in the cycle, same is reconciled using

actual readings and billed accordingly.

• In 2013/2014 a total of 470 714 meters were accounted for in the

Municipality’s asset register.

• The percentage of meters billed on a monthly basis …. 93.94%.

• Interim readings made on a monthly basis …………… Avg. 6% .

• The percentage of no-readings …………………………… 5%

• The payment level of accounts sent out …………………. Avg. 92%.

VAAL RIVER SYSTEM: EMM Status quo EKURHULENI ANTICIPATED FUTURE DEMAND (WITH & WITHOUT WDM)

GENERIC PRINCIPLES OF A WDM STRATEGY

Water conservation •Water loss minimisation

•Care protection of the water resource

•Effective use of water

Water Demand Management “The adaptation and implementation of a strategy by a water institution or consumer to

influence the water demand and usage of water in order to meet any of the following

objectives: economic efficiency, social development, social equity, environmental protection,

sustainability of water supply and services, and political acceptability.”

Integrated resource planning

“A way of analysing the change in demand and operation of water institutions that

evaluates a variety of supply-side and demand-side management measures to

determine the optimal way of providing water services”.

Metering value chain

• Vaal river

Source

• Water quality

Treatment • Infrastructure

• Energy consumption

Distribution & Storage

• Metering

End user

• Tariff model

• Revenue enhancement

Meter reading & Billing

Purpose of water meters “If you can’t measure; you can’t manage”

• A Water Utility must account for every drop of water it

purchases as bulk and then passes it on to the ultimate

consumer.

• To optimally account for “every drop” purchased and

then sold, a Utility must, therefore, have a very reliable

system and instruments to measure the amount of water

that goes into its water system and the amount of water

that goes out of its system: Water Balance

• A Meter plays a pivotal role in this regard – without it the

ability to account for water-in and water-out would not

even remotely exist.

Purpose of water meters “If you can’t measure; you can’t manage”

• The primary purpose of a meter is to measure the quantity (volume) of water used at a given time.

• The secondary purpose of a meter is to determine the efficiency within which a Utility distributes (via pipes) and retails water to its customers

• The tertiary purpose of a meter is to protect the quality of water supplied to end users by preventing backflows into the main pipes.

• The quaternary purpose of a meter is to assist customers to detect water leaks within their premises or properties.

Catalysts to metering

• Equity

• System efficiencies and losses

• Economic benefits

• System management

Catalysts to metering

Equity

End users accounting for

their own consumption

Billing of end users

Accurate accounts

System efficiencies and losses

Infrastructure integrity &

performance

Water conservation

Maintenance management and planning

Economic benefits

Accuracy in meter reading

and billing

ROI

Revenue enhancement and

protection

Sound and cost reflective tariff

structure

System management

Demand management

Water balancing

Bulk purchases and distribution

Accounting

Evolution of metering technology Traditional water meters Types of existing traditional meters

• Displacement

• Velocity

• Electromagnetic

Mainly used for:

• Measuring flow

• Volume of water consumed by classes of end users

The use depends on:

• Flow measurement

• Method of measure

• Type of end user

• Required flow rates

• accuracy

Evolution of metering technology Smart meters

• Above ground installation: easy access

• Accurate meter reading

• Automated Meter Reading (through a network

communication smart grid)

• Proactive leak detection

• Restriction functionality

• Monitoring and management of consumption by

consumers

Evolution of metering technology Smart meter

• Reduce non revenue water

• Improve meter reading performance

• Improve the accuracy of billing for water services and provide realistic revenue projections

• Tamper resistant

• Restore trust and credibility to our customers - brand equity

• Improve the revenue generation and collection capability

• Meter can be read remotely

Benefits to a Water Utility

Evolution of metering technology Smart meter

• Paying for actual consumption

• Reliable and predictable data

• Empower the customer by helping them to budget for water consumed & to be consumed

• Ownership of water consumption (free basic and actual consumption)

• Reduction in credit control action

• Prompt reaction to any leaks within property

Benefits to consumers

Selection process mapping

Business case

Legal & policy framework

Operational landscape

Metering costs

Selection process mapping

End user classification

Market readiness

Cost benefit

analysis Funding

Selection process mapping

Lega

l & p

olic

y fr

amew

ork

The Constitution of the Republic of South Africa (Act 108 of 1996 as amended)

Water Services Act (Act 108 of 1997 as amended)

Municipal Systems Act (Act 32 of 2000 as amended)

Regulations under Section 9 of the Water Services Act (Act No. 108 of 1997) Norms & Standards for Quality Water Services

• Regulation 10

• Regulation 11

Draft National Water Resource Strategy 2 (NWRS-2)

Water Supply By-Laws

Water and Waste Water Tariff Policy

Pricing Policy

Annual schedule of tariffs for the supply of water and waste water services as promulgated annually.

Bu

sin

ess

case

Long term strategic goal

Technology fit (e.g. Pulse output)

Sustainability

Value-add: resources allocation

Business appetite

• NRW reduction

• Improvement & accurate billing

Op

erat

ion

al E

nvi

ron

men

tal Socio economic

landscape

Political buy-in

Economics

Economies of scale

Institutional readiness

• Smart grid

• Communication infrastructure (Back end)

Selection process mapping

Met

eri

ng

cost

s Meter specifications

• Customer type (Domestic/Commercial)

• Meter size

• Meter class (measuring ability) A/B/C/D

• Meter design and operational life span

• Battery life

• Meter type

• Meter ability to fit with any improved technology

Staffing costs

O & M costs

Mar

ket

read

ine

ss

Technology maturity levels

Market saturation: lead time

Accessibility of technology

End

use

r cl

assi

fica

tio

n

Tariff structure

Tariff model

Consumption regime

Quantification of end users in terms of economical activeness (Revenue generation)

Selection process mapping

Fun

din

g Funding model

• Provider’s funded initiative

• Sharing of costs (Water utility & Provider)

• Water utility’s funded initiative

• Incentive based

Funding mix

• Bonds/Loans

• Water utility’s reserves

• Grants

Funding strategy

• On or off balance sheet

Co

st b

en

efit

an

alys

is

Unit cost of water

• Bulk purchases and sales

Unit cost of metering

• Cost of providing infrastructure

• Staffing costs

• Meter management and administration

Income/Revenue

Return on Investment

R

isk

man

age

me

nt

Risk planning

Risk register

Risk assessment

Risk ownership

Risk mitigation

Risk remedies

An approach to adopting new meter technologies

• Smart water metering is at an infancy level globally.

• Research has proven such.

• Some countries are yet anticipating to adopt the technology

due to pressing reasons such as Water scarcity and

Conservation efforts.

• The delay with either adoption or implementation is as a

result of a host of factors:

• Technology maturity

• Stakeholder and end user buy-in

• Institution readiness

• Technology sustainability

• Always recommended that a technology is piloted prior to

adoption and commitment.

• Pilot must include financial analysis, impact and viability &

environmental factors.

An approach to adopting new meter technologies

examples….

California:

• A law was passed in 2014 which calls for cities to cut their

water use by 20% over the next ten years.

• The state has endorsed smart meters

• To date; around half of the state's water utilities have some

smart meters in their service areas and the number is likely to

grow

Mexico:

• Serious challenges with aging infrastructure, rising demand for

water and funding constraints.

• The city adopted various strategies, including recharging of

aquifers and other projects. This; however, didn’t yield

anticipated results and hence the adoption of smart meters.

• To date, 50 000 smart meters are installed across a total

supply area of 200 000 metered connections.

THANK YOU!