Although few utility managers and operators enjoy regulations, the interesting thing about apparent loss regulations is that adhering to monitoring of Apparent Loss brings in money.
Here in California, the mention of BMPs (Best Management Practices) to any water utility practitioner brings a look of frustration, and perhaps fear. This may be due to the use of BMPs by the state to promote certain practices in water conservation, rate making, and more. This may explain why while attending a water utility data conference at Stanford a few weeks ago, a wholesale water engineer proposed the idea of Water Utility Data BMPs, and this got a chuckle from the audience.
The water industry is undergoing a fascinating transition, with more water utilities having to combat scarcity challenges and more customers requiring knowledge of their consumption patterns and working collaboratively to change behavior. William Doherty - Valor Regional sales lead, shares his insights on the water industry and Valor culture.
There is a lot of talk about Big Data these days, and if you are anywhere near Silicon Valley, it is more like a deafening roar. As important and difficult as Big Data is, we are also working to solve challenges of a different sort that gets relatively little attention: what we call Diverse Data. The key distinction between Big Data and Diverse Data is how structurally similar one piece of data is to another.
Water utilities spend less time studying their nonresidential customers than their residential customers; yet this is the group that can significantly impact financial resources and demand profiles.
In February 2016, The California Public Utilities Commission (CPUC) adopted Decision 15-09-023 which provides a set of analytical tools to quantify the benefits of water savings. The purpose of one of the tools, the water energy nexus calculator is to enable the CPUC, Investor-Owned Utilities (IOUs), and other stakeholders to quantify and capture ‘embedded energy’ savings stemming from water conservation programs. In a follow-on decision, the CPUC issued Assigned Commissioner’s Ruling Regarding Advanced Meter Infrastructure Pilot Proposals and Setting Workshop (November 20, 2015).
The Columbia Water Center hosted its third annual national workshop on the future of water in America. This year’s event, America’s Water: Innovation at Work, focused on three prominent themes facing water in America today – water infrastructure, financing water projects and the future of water utilities.
Water utility financial practices are constantly evolving. According to Dr. Christine E Boyle, the optimal strategy for each utility to meet challenges successfully is to minimize risks associated with external changes and to increase internal financial resilience.
Rate changes are often used by utilities as a way to cope with financial problems. Budget-based rates, also known as individualized rates, have emerged as a way to meet efficiency, cost-recovery, and social equity goals (Mayer et al, 2008). Valor Water Rate Simulator helps utilities understand revenue profiles and plan strategy and visualize the impact of new rate structures like budget-based rates, peak set rates and customer select rates, and has been successfully leveraged by utilities in California and South-East USA.
In addition to rate adjustment, efficient water use can also be important in minimizing risk and building financial resilience.
The cycle of the conservation - revenue resilience is presented below:
- Conserving water allows utilities to cut operation and maintenance costs and defer expensive supply expansion projects.
- As conservation policies go into effect, the seasonal fluctuation of water use decreases, resulting in more stable customers use and associated customer sales.
- Reducing seasonal use eases the pressure to supply water during peak seasons and also helps achieve revenue stability.
- Minimizing costs and stabilizing revenue are help utilities strengthen their financial and credit standing with rating agencies. This is a major shift from previous views in which conservation was evaluated as a credit weakness that would result in decreased revenue.
To read the full article on Adapting to change: Water utility financial practices in the early twenty-first century, click here.
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Dig deeper into Valor Water through The Water Values Podcast!
During this episode, you will learn more about:
- How Christine started Valor Water
- The University of North Carolina’s water program
- The four platforms Valor Water has commercialized for utility revenue
- Using software to find anomalies in the water distribution system
- “Real losses” from the water distribution system
- Using software to identify customers with potential payment problems
- How Valor Water identifies and segments customer classes for messaging about bill payment and cut-offs
- Using software to assist utilities with rate optimization and climate change planning
- “Stress testing” utilities for climate change scenarios
- Using software for conservation planning
- Meter fleet management applications
- The different data points and types that Valor Water uses
- How Valor Water helps utilities “unleash the power of their data”
Valor Water Analytics recently built Non Residential Customer Sales Dashboards for four utilities in North Carolina. Read about the project’s Plateau Analysis and how these utilities are putting findings into action on project partner University of North Carolina’s Environmental Finance Center blog, here: When Big Customers Make Big Changes.