A water utility manager visited a power plant and was amazed at what he saw. A single person – the power plant manager – was operating the entire facility. The water utility manager asked how this could be achieved for his water/wastewater treatment facilities. The answer: advanced automation, technology and analytics.

Managing operational costs is one of the top five water industry issues, as identified in Black & Veatch’s Strategic Directions: U.S. Water Industry report.  Labor and energy represent the largest operational expenses for water utilities. In addition to the cost of labor, aging workforces are an issue of rising prominence, ranking seventh among all respondents in the top industry issues list, and sixth among respondents that have both water and wastewater facilities.

“Technology, coupled with the implementation of formal asset management frameworks, will enable utilities to capture the institutional knowledge of existing staff and reduce the need to replace retiring staff,” said Jeff Neemann, Smart Integrated Infrastructure Solution Lead for Black & Veatch.  “In addition, well-planned asset management and technology programs will help utilities reduce energy consumption, improve maintenance programs and potentially improve cash flow and billing accuracy.”

Energy Recovery and Efficiency

When it comes to reducing operational costs, improving energy efficiency has been the proverbial low-hanging fruit for water utilities. Nearly 80 percent of utilities have replaced some level of inefficient equipment, according to the report. In addition, more than 70 percent are using SCADA data analytics, and nearly 60 percent have conducted energy audits.

The survey also indicates that a large portion of water utilities are interested in pursuing more advanced energy programs, with 42 percent showing interest in developing energy master plans. Energy master plans will help define the next level of energy conservation measures that go beyond what has already been implemented. More than half of medium and large utilities are considering or have implemented software or data analytics programs to proactively manage energy costs as compared to 30 percent of small utilities.

Using Energy Performance Contracting

Many utilities remain challenged in developing and implementing enterprise-wide energy efficiency programs, according to Jeff Buxton, Executive Consultant, Black & Veatch. Less than 10 percent of all survey participants stated their utility plans to use energy performance contracting as a means for meeting energy efficiency goals.

For energy performance contracting, terms often include guaranteed levels of energy reduction, negating concerns over an uncertain return on investment. Because performance contracting involves a third-party service provider, utility staff can continue to focus on other higher priority issues.

“Energy performance contracting is an alternative financing mechanism that can enable water utilities to move forward with energy efficiency programs,” Buxton said. “This method often requires minimal upfront capital costs, which helps address the challenge of budget constraints.”

He said utilities that are financially sound with a strong business case for improvement will likely self-implement an energy efficiency program rather than share the cost savings with a third party.

“But energy performance contracts can be a win-win situation for utilities looking to achieve meaningful reductions in their energy bills that do not have available capital or staff resources to implement necessary changes,” Buxton noted.

The Water Smart Grid

Water utilities are strong believers in the immediate benefits of advanced metering systems. Nearly 75 percent of all respondents cited direct meter reading cost reductions as a primary driver for considering automatic meter reading (AMR) or advanced metering infrastructure (AMI) programs, commonly referred to as smart metering. Nearly half of respondents cited leak detection as another benefit, which can reduce expenses associated with non-revenue water.

AMR is a system that enables utility meter reading via mobile or drive-by technology. AMI, on the other hand, refers to more advanced technology where meter data is transmitted over a two-way, fixed network to a central control center for processing.

“We expect growth in AMI use across the industry because of the additional benefits these systems can provide beyond meter reading cost reductions,” said Kevin Cornish, Operational Technologies Consulting Practice Lead, Black & Veatch. “Benefits of AMI systems include the ability to remotely control network devices, such as smart meters, help enhance customer service, support asset management and enhance leak detection solutions.”

Black & Veatch projects that the technologies commonly referred to as the “Smart Water Grid” – such as smart meters or distribution sensors – will become an integral part of water utilities’ enterprise operations.

“Water utilities can achieve similar results as their electric utility peers who have realized increased system reliability, improved operating efficiency and enhanced customer service as a result of their AMI programs,” Cornish said.

Using Cloud-Based Programs

Cornish said water utilities can continue moving toward greater levels of automation. Furthermore, water utilities can benefit from cloud-based services that have altered the economics of advanced automation programs.

The benefits that cloud-based services provide utilities were highlighted in Black & Veatch’s inaugural Strategic Directions: Utility Automation & Integration report released in January 2014.

That report stated, “Multi-tenant systems (cloud-based) have the scale and security needed to safeguard critical operational data and sensitive client information. Most importantly, they give even the smallest organizations cost-effective access to big system capabilities. Previously inaccessible computing power and data analytics and management tools can be deployed to increase efficiency and help facilitate data-driven management approaches.”

“Cloud-based services are closing the technology gap between small and large utilities,” Neemann said. “No longer will the latest technology be limited to large organizations capable of supporting dedicated IT budgets and staff. Nor will larger enterprises be locked into static computer systems as cloud technology facilitates continuous improvement approaches.”

To achieve the desired future state of highly automated and efficient operations, such as a one-person water plant operation, utility leaders should incorporate technology master plans into their overall asset management plan, Neemann noted. After all, evolving from a highly manual process organization to a fully automated utility will take time, change management and a thorough evaluation of current practices and future needs.

“In an era where utilities are constantly looking to ‘do more with less,’ investing in automation technologies and greater intelligence will help water leaders meet their efficiency goals, become more resilient and provide greater levels of customer service,” Neemann said.

 Published originally on Black & Veatch Solutions