Why utilities must prepare for digital water metering

With reduced revenue forecasts, increasing customer demands and government pressure for efficiency savings, water utilities would be unwise to hold off on implementing digital water metering, a new report says.

According to KPMG’s Digital Water Metering paper, the data collected by smart water meters provides utilities with valuable information that can be used to streamline operations and deliver a better level of service.

“Digital water metering is an opportunity for water businesses to improve their operational efficiency and their customer experience,” co-author of the paper Greg Elliott said.

“It is a key enabler to help businesses meet their strategic objectives, whether those objectives are around quality of service, operational efficiency or customer engagement and experience.”

Utilities across the country have done pilot rollouts of the technology. In Victoria, City West Water, South East Water and Yarra Valley Water are collaborating on smart water metering trials, while SA Water has invested more than $4 million in smart technology in Adelaide’s CBD.

However, Elliott said others are still trying to understand the role smart meters could play in their operations.

“The water industry is grappling with how to best use technology to drive improvements in efficiency and customer service,” he said.

“It’s an interesting time in the market … There are external pressures on water businesses around operational efficiency, significant advancements in technologies and, at the same time, we have a digitally savvy, digitally native customer.”

This modern customer has far higher expectations of service providers and wants a clear view of their consumption patterns, which smart meters can provide.

“Water businesses are starting to take notice of the importance of customer experience and digital water metering is a great enabler for that,” Elliott said.

“If you can start to capture customer consumption patterns at a granular level, it then gives them the opportunity to start influencing what their consumption looks like. This can promote a more efficient consumption of water.”

Smart water meters can also help identify where there are faults across a network, which can save utilities time and money.

“Infrastructure planning, deferring infrastructure replacement through peak demand management and extending the natural life of assets will all contribute to a return on investment for water businesses,” Elliott said.

“You’re essentially reducing the amount of investment required in large and expensive infrastructure.”

Elliott has been involved in smart meter rollouts in the electricity distribution industry, and said there are a number of lessons the water sector can learn from this, including the importance of putting customers at the centre of any digital transformation.

“You’ve got to have an operating model that provides relevant services and you’ve got to take your customer on the journey with you,” he said.

“A really important lesson is that you need to engage with your customers so they see the value of digital water metering and the advantages it will bring them.”

For utilities that want to be smart meter ready, the KPMG paper set out six factors to consider: strategy, target operating model, process, customer engagement, data management, and technology.

Of these, Elliott said technology was particularly important as water utilities have historically underinvested in IT. In order to implement a digital water metering system successfully, businesses need an IT environment that can take in a vast amount of information and use it in an educated way.

“It’s a huge volume of data businesses will be collecting, so it’s about managing this in a robust manner and deriving value from it,” he said.

“There’s no point capturing data unless the business understands how to use that data and how to feed the insights from that into the decisions they’re making, whether that’s at an operational or management level.”

Although there has yet to be a large-scale rollout of digital water metering in Australia, Elliott said he believes it will happen.

“If those who are already going through the process are able to realise significant returns on investment, then it’s only a matter of time before we see significant adoption across the industry,” he said.

“While many water businesses are still in the process of conceptualising digital water metering, the time is now to start planning and establishing the foundations for future implementation.”