I’ve been fortunate to have spent significant time in my career working in “utility” industries such as cable tv/broadband, electric and water.
Most gratifying is how foundational each of these services are to our society as the baseline to our quality of life. Many of us are old enough to remember what life was like without cellphones or Wi-Fi. But life without electricity and water is unimaginable.
The power and water industries have experienced waves of infrastructure aging and then periods of rapid reinvestment. Each have a customer base that takes the services for granted, preferring not to think about the services…unless there is a problem.
Today, water utilities are experiencing many of the same circumstances and issues that drove the electric utilities to invest and advance: hold costs down while maintaining reliability, accept intense capital requirements, and adapt to address conservation and environmental concerns.
Water and Power have to face the technology revolution and to wrestle with the question of how to make technology an enabler not a complicator. The power sector is, from my perspective, more technologically advanced than the water sector and is seeing significant results from Smart Grid. Smart electric grids leverage big data, artificial intelligence, and predictive analytics to pre-empt energy interruption in the system using condition-based monitoring and preventive maintenance. Smart Grids have proven their value in reducing the frequency and duration of outages.
There are four key lessons that the water industry can learn from the power industry.
1. The consumer is passive and will (mostly) remain so.
Yes, demand side management in the power sector has become a critical value add, and many customers are participating in a kind of strategic alliance with the utility that is only possible through digital technology. Water conservation and energy efficiency programs are fully matured. Appliances, fixtures and lightbulbs are all designed to be frugal. That is why the next best opportunity is for utility-side solutions that don’t require active consumer participation.
2. The “smart meter” is important but it is just a piece of the puzzle.
In the power space, AMI has been transformational when it comes to helping the utilities identify outages and reduce the cost and hassle of manual meter reads. But for too long, the terms Smart Grid and the Smart Meter were thought by the average consumer to be synonymous. Of course, they are not. Much of the benefits of Smart Grid in the power sector are found in distribution automation, smart substations, smart switches and strategies beyond the customer meter. Water utilities are accelerating the deployment of smart meters, which is good, but they need to accept from the start that it’s only a piece of the puzzle. Using the data, adding remote monitoring and analysis of the system is just as important and will deliver more value than the meter.
3. Automated and remote system monitoring is the driver of smarter asset management.
Electric utilities with remote monitored and controlled grid devices are not just reaping the benefits of faster restorations and system efficiencies. All this data is being used to take a more strategic approach to asset management. Water utilities are increasingly focused on asset management and deploying technology that brings intelligence about the real-world condition of assets will help this process. Smart sensors throughout the water grid will allow for more evidence-based decision making in what assets to prioritize; which assets need immediate attention and which do not.
4. The utility business/regulatory model needs reform to reward innovation.
Smart Grid is founded on the principle of efficiency, both in terms of consumption and utility operations. But the age-old business model of “cost-plus” utility regulation can run counter to these objectives.
Water utilities are compensated in largely the same way as electric utilities. If there is no intrinsic and immediate metric for reducing water loss (other than more ethereal, long-term issues like water scarcity) then deploying technology to reduce water loss can run against the utilities’ interests. Water utilities should be rewarded for reducing water loss, improving efficiency and operations and employing strategic asset management plans just as electric utilities are rewarded for reducing line loss, improving reliability and resiliency while driving efficiency. If not, inertia (either conscious or unconscious) will continue to slow down tech innovation.
Considering the number of innovations made to the regulatory landscape that incent values delivered to customers, municipal leaders need to take a step back and examine the water utility model and ask whether the current paradigm is a motivator or an inhibitor to innovation.
Aquify (www.exelonaquify.com) provides cities and municipalities across the U.S. with a new way to manage their aging water infrastructure while also achieving new levels of reliability, resilience and responsiveness. Aquify is a wholly-owned subsidiary of Exelon Corporation, one of the leading electric and gas utility companies in the U.S., serving more than 10 million customers.