Ms. Dorothy Mabuza Divisional head: Water Quality and Revenue Management Ekurhuleni Metropolitan Municipality South Africa

Ms. Dorothy Mabuza Divisional head: Water Quality and Revenue Management Ekurhuleni Metropolitan Municipality South Africa

THE EVOLUTION OF WATER METERING TECHNOLOGY AND THE SELECTION PROCESS Contents of presentation Introduction Water business value chain Vaal river system: EMM Status quo Principles of a WDM strategy Metering value chain Catalysts to metering Evolution of metering technology Selection process mapping An approach to adopting new meter technologies

Introduction The South African Constitution states that everyone has the right to have access to sufficient water (RSA, 1996). South African households with access to potable water increased from 84,5% in 2002 to 89,5% in 2011 (Stats SA, 2011). To reach NRW acceptably good levels as per the IWA barometer; water losses and unbilled authorised consumption must aggressively be addressed. Meters are deemed to be cash registers for Water utilities with the premise that revenue is generated through efficient billing.

Water business value chain extract from TCTA

VAAL RIVER SYSTEM: EMM Status quo Current water demand exceeds supply RW has exceeded its license quotas and can t be extended further (at least for now) Reduction of demands by Municipalities recommended High water losses Technical losses Non Technical losses Ageing and continuously ageing meters Revenue projections more than actual Interim readings: remains a challenge Non-payment of services in low income HH NRW @ 36.8% (Feb 2015)

VAAL RIVER SYSTEM: EMM Status quo The cost of procuring water from Rand Water (including the water research levy) is R6.00 / kiloliter, and EMM s water demand is 357 640 839 kiloliters per annum (2013/2014). Therefore the cost to EMM of procuring water is R1.981 billion / annum (2013/2014). Income from water tariffs is R2.669 billion / annum (2013/2014 financial year). By-laws for water meters to be read at least 4 times a year. A provision is made to bill on interim consumption calculated at a fixed tariff rate and later on in the cycle, same is reconciled using actual readings and billed accordingly. In 2013/2014 a total of 470 714 meters were accounted for in the Municipality s asset register. The percentage of meters billed on a monthly basis. 93.94%. Interim readings made on a monthly basis Avg. 6%. The percentage of no-readings 5% The payment level of accounts sent out. Avg. 92%.

VAAL RIVER SYSTEM: EMM Status quo EKURHULENI ANTICIPATED FUTURE DEMAND (WITH & WITHOUT WDM)

GENERIC PRINCIPLES OF A WDM STRATEGY Water conservation Water loss minimisation Care protection of the water resource Effective use of water Water Demand Management The adaptation and implementation of a strategy by a water institution or consumer to influence the water demand and usage of water in order to meet any of the following objectives: economic efficiency, social development, social equity, environmental protection, sustainability of water supply and services, and political acceptability. Integrated resource planning A way of analysing the change in demand and operation of water institutions that evaluates a variety of supply-side and demand-side management measures to determine the optimal way of providing water services.

Metering value chain Vaal river Source Treatment Infrastructure Energy consumption Water quality Distribution & Storage End user Metering Tariff model Revenue enhancement Meter reading & Billing

Purpose of water meters If you can t measure; you can t manage A Water Utility must account for every drop of water it purchases as bulk and then passes it on to the ultimate consumer. To optimally account for every drop purchased and then sold, a Utility must, therefore, have a very reliable system and instruments to measure the amount of water that goes into its water system and the amount of water that goes out of its system: Water Balance A Meter plays a pivotal role in this regard without it the ability to account for water-in and water-out would not even remotely exist.

Purpose of water meters If you can t measure; you can t manage The primary purpose of a meter is to measure the quantity (volume) of water used at a given time. The secondary purpose of a meter is to determine the efficiency within which a Utility distributes (via pipes) and retails water to its customers The tertiary purpose of a meter is to protect the quality of water supplied to end users by preventing backflows into the main pipes. The quaternary purpose of a meter is to assist customers to detect water leaks within their premises or properties.

Catalysts to metering Equity System efficiencies and losses Economic benefits System management

Catalysts to metering Equity System efficiencies and losses Economic benefits System management End users accounting for their own consumption Infrastructure integrity & performance Water conservation Accuracy in meter reading and billing ROI Revenue enhancement and protection Demand management Billing of end users Accurate accounts Maintenance management and planning Sound and cost reflective tariff structure Water balancing Bulk purchases and distribution Accounting

Evolution of metering technology Traditional water meters Types of existing traditional meters Displacement Velocity Electromagnetic Mainly used for: Measuring flow Volume of water consumed by classes of end users The use depends on: Flow measurement Method of measure Type of end user Required flow rates accuracy

Evolution of metering technology Smart meters Above ground installation: easy access Accurate meter reading Automated Meter Reading (through a network communication smart grid) Proactive leak detection Restriction functionality Monitoring and management of consumption by consumers

Evolution of metering technology Smart meter Benefits to a Water Utility Reduce non revenue water Improve meter reading performance Improve the accuracy of billing for water services and provide realistic revenue projections Tamper resistant Restore trust and credibility to our customers - brand equity Improve the revenue generation and collection capability Meter can be read remotely

Evolution of metering technology Smart meter Benefits to consumers Paying for actual consumption Reliable and predictable data Empower the customer by helping them to budget for water consumed & to be consumed Ownership of water consumption (free basic and actual consumption) Reduction in credit control action Prompt reaction to any leaks within property

Selection process mapping Business case Legal & policy framework Operational landscape Metering costs

Selection process mapping End user classification Market readiness Cost benefit analysis Funding

Legal & policy framework Selection process mapping Business case Operational Environmental The Constitution of the Republic of South Africa (Act 108 of 1996 as amended) Water Services Act (Act 108 of 1997 as amended) Municipal Systems Act (Act 32 of 2000 as amended) Regulations under Section 9 of the Water Services Act (Act No. 108 of 1997) Norms & Standards for Quality Water Services Regulation 10 Regulation 11 Draft National Water Resource Strategy 2 (NWRS-2) Water Supply By-Laws Water and Waste Water Tariff Policy Pricing Policy Annual schedule of tariffs for the supply of water and waste water services as promulgated annually. Long term strategic goal Technology fit (e.g. Pulse output) Sustainability Value-add: resources allocation Business appetite NRW reduction Improvement & accurate billing Socio economic landscape Political buy-in Economics Economies of scale Institutional readiness Smart grid Communicatio n infrastructure (Back end)

Metering costs Market readiness End user classification Selection process mapping Meter specifications Customer type (Domestic/Comm ercial) Meter size Meter class (measuring ability) A/B/C/D Meter design and operational life span Battery life Meter type Meter ability to fit with any improved technology Staffing costs O & M costs Technology maturity levels Market saturation: lead time Accessibility of technology Tariff structure Tariff model Consumption regime Quantification of end users in terms of economical activeness (Revenue generation)

Funding Selection process mapping Cost benefit analysis Risk management Funding model Provider s funded initiative Sharing of costs (Water utility & Provider) Water utility s funded initiative Incentive based Funding mix Bonds/Loans Water utility s reserves Grants Funding strategy On or off Unit cost of water Bulk purchases and sales Unit cost of metering Cost of providing infrastructure Staffing costs Meter management and administration Income/Revenue Return on Investment Risk planning Risk register Risk assessment Risk ownership Risk mitigation Risk remedies

An approach to adopting new meter technologies Smart water metering is at an infancy level globally. Research has proven such. Some countries are yet anticipating to adopt the technology due to pressing reasons such as Water scarcity and Conservation efforts. The delay with either adoption or implementation is as a result of a host of factors: Technology maturity Stakeholder and end user buy-in Institution readiness Technology sustainability Always recommended that a technology is piloted prior to adoption and commitment. Pilot must include financial analysis, impact and viability & environmental factors.

An approach to adopting new meter technologies examples. California: A law was passed in 2014 which calls for cities to cut their water use by 20% over the next ten years. The state has endorsed smart meters To date; around half of the state's water utilities have some smart meters in their service areas and the number is likely to grow Mexico: Serious challenges with aging infrastructure, rising demand for water and funding constraints. The city adopted various strategies, including recharging of aquifers and other projects. This; however, didn t yield anticipated results and hence the adoption of smart meters. To date, 50 000 smart meters are installed across a total supply area of 200 000 metered connections.

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