June 07, 2016

The Customer Engagement Case for AMI

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Water utilities are increasingly evaluating new metering technologies to reduce non-revenue water, drive down operational costs of data collection, and gain greater visibility into meter asset health. From the utility’s perspective these are all sound business reasons for making what is often a substantial investment in advanced metering infrastructure (AMI).

But how do these investments help the residential customer? Are water prices reduced as a result of these utility cost reductions? Unfortunately not. Utilities have to recover the cost of these hardware investments and many districts are not generating sufficient revenue to cover their basic operational expenses, let alone enough to make long-term investments in new capital projects.

One of the other key benefits of AMI investments that utilities and meter vendors tout are improved levels of customer engagement. Real-time interval data from water meters provides greater visibility into water consumption patterns. This data stream allows utilities to identify leaks as they occur, and notify customers of money saving fixes. Not only does this save money from lower utility bills, but it also protects households from water damage.

This is a real benefit to customers. But it doesn’t end there. Real-time data allows users to track their water consumption patterns more discretely. When water use information is paired with property and climate data, modern data analytic technologies are able to dynamically disaggregate these data streams and estimate water use by category. For example, if a customer learns that nearly half of water consumption goes to outdoor irrigation, they can invest in an irrigation control system or turf replacement that can yield additional savings.

Real-time data also allows consumers to track water costs on an ongoing basis. Billing alerts notify users that are approaching a certain spend threshold. Getting greater control over water expenditures helps with household budgeting and long-term planning. Also, customers that engage more with utilities are more likely to register for digital communications over email and text messaging which makes it easier for utilities to communicate system critical issues such as water main breaks, boil notices, or even routine maintenance schedules. This leads to fewer surprises for residents and contributes to the virtuous cycle of improved satisfaction.

So there are clearly benefits to customers from AMI investments. Improved communications begins to shift the relationship from utility and ratepayer to something that approaches more of a partnership where both parties are working together for mutual benefit. This improved relationship is critical when utilities need to raise rates to justify future infrastructure investments, and a more established communication channel with customers aids in a proactive conversation.

However, while these are all valuable benefits, they only accrue after the AMI investment and implementation. What about the 85% of utilities that haven’t yet implemented an AMI solution? How can they realize these many engagement advantages, pave the way for better customer communication, and lay the groundwork for future investments?

It turns out that nearly all of these same benefits can be had by utilities with older metering technology. While discrete-interval data from smart water meters provides a more detailed view of consumption behavior, modern analytics systems can yield a majority of these insights from bi-monthly meter reads. And this information can be leveraged for greater customer engagement to aid in making the case for AMI or other infrastructure investments.

Think about it: Analyzing consumption data and deploying direct customer communications on water use, savings opportunities, high volume leaks, rebate and incentive programs, and other critical system activity improves customer satisfaction and drives users to digital communication channels. This allows the utility to articulate the added benefits that customers will receive from various projects and creates a path toward sustainable rate restructuring, ongoing investment, and post deployment engagement.

In short, engagement isn’t dependent on the availability of interval data, but ideally a precursor to such investment. And the best part of all is that engagement programs are highly cost-effective, yield operational savings, and reduce the political efforts required to implement larger scale infrastructure programs. This is a logical step for any utility looking to further engage customers, increase satisfaction, and make needed investments to improve system reliability and reduce costs.

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