August 24, 2015

Why Customer Engagement Matters to the Whole Urban Water Cycle


The importance of water-use management

There’s a tendency to think customer engagement is most valuable when supply is under stress, which is the case in many states. While that’s the easiest way to see how customer engagement benefits utility operations, the reality is that consumer engagement for demand management offers real financial benefits regardless of the availability of water supply. A recent Water Research Foundation Study, Toolbox for Water Utility Energy and Greenhouse Gas Emission Management, reveals how water use management is the key driver in determining the volume of raw water that must be acquired, stored, treated and distributed. This also applies to determining how well combined sewer systems handle rainfall. Thus water demand management embodies a key lever in addressing infrastructure issues.

When its necessary to implement droughtsensitive water use programs, targeted customer communication is a highly effective way of reducing water demand by enhancing the customer’s understanding of the value of water and the most effective conservation actionsThe most recent AWWA Survey of Utility Personnel listed the most widely held concerns; this includes the assumption that water efficiency programs are preferable to draconian, short-term restrictions which do nothing to improve customer understanding of water systems and services and don’t contribute to improvement of long term operating costs for the utility. 


The WERF 2012 study, 21st Century Water Municipal Issues and Concerns, reported that the average US domestic water use of 157 GPCD is four times the global average of 41 GPCD. This exacerbates operational challenges because utilities use potable water to satisfy almost all of this demand. As a practical matter, substituting non-potable water for the 25-60% of acceptable non-potable water uses requires a long-term investment in customer education

Black & Veitch’s 2015 Strategic Directions: US Water Industry Report and AWWA’s most recent State of the Water Industry report reiterated the implications of using potable water for almost all urban water use. Since potable water must be treated, transported and delivered, it’s clear why the greatest concern is, “How will the utility maintain their current infrastructure and fund capital improvements? Thus it behooves the utility to leverage demand management as a critical tool to address current system limitations and appropriately plan for future infrastructure improvements 

the economics of consumer engagement

Beyond the desire to deliver reliable and safe water, there’s substantial economic benefit from utilizing consumer engagement for extending the lifetime of existing facilities and distribution assets. In 2011, the EPA estimated a need of more than $384B in infrastructure investments over the next 20 years to improve our nation’s drinking water supply. There are roughly 9,000 medium sized community water systems in the United States, so this would equate to an average investment of $18.4M per medium-sized utility. Municipal bond yields are currently around 3.75%, which means that for every year capital investments can be deferred, these communities will save around $700,000 in interest expenses. While this is a grossly simplified analysis, the trend is absolutely clear: extending the asset lifetimes of our drinking water systems through targeted demand management will yield dramatic financial benefits to the utilities, their customers and the communities in which they reside. 

 customer communications help the utility

Customers generally want to use water wisely and are willing to take action to eliminate wasted usage, but they only have a casual engagement with their utility.  Any communication, therefore, must be tailored, concise and precise. General exhortations to be water wise will not draw in those customers who are not already predisposed towards prudent water use. Communications should accurately state household water use, followed by steps to eliminate water use and the benefits of efficient water use. From the utilities’ perspective, that will decrease the amount of water treated, conveyed, stored and delivered. An equally important consideration is using an improved understanding of the customer’s water use to forecast future needs; this will inform infrastructure planning. Understanding water consumption patterns with the highest degree of confidence makes it possible for utilities to identify where finite distribution system maintenance dollars should be spent to get the highest return for reductions in non-revenue water.

Let’s return to the AWWA survey. To properly take advantage of data as a tool for improved system operations and capital cost management, each utility must have a plan. This means ensuring the robustness of the analytics, system accessibility, and a clear understanding of how to apply a reference data set to generate insights from the information. Over half of the AWWA 2015 respondents indicate that their utility does not have a big data strategy which indicates a large concern for the utility’s customers.


This is where WaterSmart Software can help. From experience serving over 40 utilities and their 2.5M customers, we help the utility understand customer water use and generate targeted engagement campaigns to drive improvements in water-use efficiency. This allows the water utility to quickly begin realizing the various financial benefits and create greater resiliency throughout the entire urban water cycle.

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