City of Ann Arbor: A Model for AMR/AMI Implementation and Assigning Costs Where They Occur

City of Ann Arbor: A Model for AMR/AMI
Implementation and Assigning Costs Where
They Occur

Wendy Welser, Manager
Customer Service Center, City of Ann Arbor

© 2009 All rights reserved

City of Ann Arbor, Michigan

2

Ann Arbor at a Glance

• Founded in 1824
• 27.7 square miles
• 114,000 residents
• 156 parks, 2,055.5 acres of parkland
• Ann Arbor is a recycling pioneer; recognized in 1998 by the US
Environmental Protection Agency as one of the top 20 waste-reduction
communities in North America for recovering over 50% of its residential
solid waste through recycling and composting. The City expanded into
single stream recycling operations in 2010 with the goal of increasing waste
diversion to over 60%
• Home to 5 colleges and universities including the University of Michigan
• Honors and distinctions: Tree Town USA; CNN/Money Magazine’s Best
Places to Live and Best Small Cities; Bicycling Magazine’s Top 21 Cities for
Cyclists; Forbes Magazine’s Top College Sports Town and Most Livable
City
• Home to top companies like: Google, Domino’s Pizza, Borders Group

3

Pre-AMR/AMI System Challenges

• A single quarterly meter reading made it nearly impossible to assist
customers with high bill complaints
• High rate of failure on technology (unreliable meter guns/supporting
software; old meters not reliably reading high and especially low flow)
• 24.1% (6,453) of all meters were non-remote read sites
• Average of 350 remote devices repaired annually
• 12.4% (14,213) of all billed reads were “estimated”
• Average of 900 billing adjustments made annually due to billing estimates
• Average of 1,250 meters were billed/adjusted on a single annual read
• “Drive-by” readings; an average of 1,200 reads required a re-read because they failed the “Hi-Lo”
edit
• Average of almost 4,000 annual reads for “new party”
• Average annual cost associated with these issues (not including high bill complaints and technology
failure) was $300,798 USD

4

Why AMR/AMI?

• Improve revenues through increased metering accuracy (opportunity for
meter replacement)
• Tamper detection capability
• Zero read reports help to identify metering issues before a bill is generated
• Improve customer service; no need for intrusive meter reading visits and increased ability to
provide more accurate and timely billing data
• Improve employee and customer safety
• Eliminate manual data entry errors
• Operational efficiencies: save on labor, fuel, and equipment
• Read meters daily with wireless/solar AMR (vs manually collected readings once every quarter)
• Improve distribution system planning and asset management by providing
accurate usage data to distribution system stakeholders
• Use meter data to assist the City in its desire to make rate adjustments
based on a cost of service approach
• Possibilities for advanced leak detection applications

5

Managing Meter Data for Our Customers:
Water Consumption Data Link

Also a tab on the
“My Property”
information screen

511289-111558

Must use 12-digit
account number to
access meter data

8

Customer Current vs. Prior Usage Comparisons

9

Viewing Daily Water Usage Records for
Highs, Lows and Anomalies

10

5-Day Anomaly Identified

11

Graph Usage Trends and Download Data

12

Pre-MDM Cost of Service Calculations
City of Ann Arbor Water System Allocations
(Carter & Burgess Report)

• The water services used for the Systems Allocations study included:
• Volume of water used: all assets, functions, and tasks directly related to the
volume of water consumed
• Maximum day demand: all assets, functions and tasks related to providing the
amount of water required to serve customers on the day with the maximum water
demand
• Maximum hour demand: all assets, functions, and tasks related to providing the
amount of water required to serve customers during the hour with maximum
water demand
• Metering/Billing: includes the costs to maintain customer meters, produce bills
and maintain customer billing records
• Metering, billing and collection costs are generally used to calculate the base
monthly charge (customer charge)
• Remaining costs for water and wastewater are accumulated by customer
class divided by the estimated volume of usage for each customer class to
arrive at a rate per hundred cubic feet of usage (ccf)
Fire
Functions: Volume Max Day Max Hour Meter Billing Services
Water System Asset Value ($Million) $ 230 $ 27,520 $ 29,981 $ 856 $ - $ 1,204
Asset Allocation % 0.385% 46.027% 50.143% 1.432% 0.000% 2.014%
Asset Allocation for Revenues 0.393% 46.973% 51.173% 1.461%
Field Water Allocation % 0.000% 13.000% 85.000% 2.000% 0.000% 0.000%

13


• The “report year” or FY 2004 unit costs for water were:

Types of Services Unit Costs Unit

Volume of water used $0.0025 CCF
Maximum Day $0.7096 CCF
Maximum Hour $0.3857 CCF
Meter activities $0.6841 Meter Equivalent
Billing and collecting $14.7374 Account
• Rates were designed to cover these costs
• Rate design objectives included:
City Council and Staff Objectives
Revenue from rates must be sufficient to fund all service costs
Rates must comply with any service contract provisions and with Federal and State reg
requirements
Rates should be designed to support conservation of water resources
Customer Input Objectives
Rate design should be understandable
Rates should be based on the cost to provide service
Water and wastewater service should be affordable
Revenue from rates should assure revenue stability

14


• To accomplish the rate design objectives the following changes were proposed
to the rate structure in place at that time (July, 2004):
Consumption formerly included in the “minimum quarterly bills” (up to 7 units) was
removed to achieve a better match of billing and collection costs with the minimum
bill amount
An “inclining three-block rate structure” was created for the residential customer
class. Although it was not based on an average use to peak use model:
The more you use the more you pay per unit – more equitable recovery of costs
Encourages conservation of water resources
Provides for affordability at low consumption levels
Water only meters used by customers for irrigation and/or cooling processes were
assigned the same unit cost as the highest unit price block for residential customers
to more equitably recover cost incurred, which incents water conservation
Private fire protection accounts were assessed a minimum monthly/quarterly
charge to recover a portion of infrastructure costs available to that service
The customer charge was introduced at a lower rate with the intent to reach an
equity position ($14.74) within 5 years (2010 = $11.25/qtr water; $10.57/qtr sewer)
This minimized the immediate impact on low volume users (“life-line” rate)
There was recognition of a reduced cost of service in this category because of the AMR
investment

15

Cost of Service: Inclining Block Rate Structure

The study’s calculations resulted in the following proposed rates, which
were actually implemented July, 2004:
WATER Volume Charge Per CCF
0 9
Base Charge to to Over
8 28 28
RESIDENTIAL
Rate per unit of service $ 9.00 $ 0.97 $ 1.92 $ 2.92

Volume
Charge
Base Charge Per CCF
COMMERCIAL
Rate per unit of service $ 9.00 $ 1.92

UNIVERSITY

PUBLIC SCHOOLS

WATER ONLY

FIRE SERVICE
Rate per unit of service $ 18.00

16

Cost of Service: Inclining Block Rate Structure

• First effort (pre-MDM) at developing Cost of Service rates
• Implemented July 1, 2004
• Residential customers only
• Designed to increase customer awareness and appreciation of the value of
water and encourage conservation/more informed choices about water use
• Based on recovering the average cost per unit in “demand” blocks
• Began with 3-tier structure – 4th tier added July 1, 2005
• Model based on national load research data; graphed the number of bills at
each unit of commodity and found that it formed a perfect bell curve
# of Bills

Tier 2 Tier 3

Tier 1
Tier 4

# of Units

17

Cost of Service:
Residential Customer Class 4-Tier Inclining Block Rate Structure
Actual Rates for July 1, 2010 - June 30, 2011

Residential Residential 2 Commercial Water Only
(add. of water only meter) (based on peaking factor) (Commercial)

1-7 Units $1.23 $1.23 $2.85 (<=5) $4.31
8-28 Units (21) $2.53 $2.53 $5.21 (>5<8) $4.31
29-45 Units (17) $4.23 $2.53 $8.90 (>=8) $4.31
46 Units or more $6.10 $2.53 $4.31

18

Peak Day vs. Average Day by Year

31

28
Millions of Gallons

25

22 Avg Day
19 Peak Day

16

13

10
2003 2004 2005 2006 2007 2008 2009
Year

• Significant change is reflected in the system demand profile after the
“Cost of Service” rate structure was introduced for the 20 largest
commercial class customers in July 2008 and all commercial class
customers in July 2009.
19

Cost of Service Rate Structure
Using City of A2 System AMI System Data

• Implemented July 1, 2008
• Infrastructure must be built to meet peak demand
• Initially and for the foreseeable future Commercial accounts only
• The idea is to associate costs to the appropriate users
• The City had to find ways to encourage changes in peak use patterns,
assign costs to customers fairly, avoid near term costs associated with
water supply development, and to roll out investments in water
infrastructure to water customers in an equitable way.

20

Cost of Service Calculations

• Usage for the year / # of days in the year = average daily demand
• Find 3 highest reads between May and October (City’s Peak Period)
• Eliminate top 2 reads
• Divide remaining “high read” by average daily demand
<5 Peaking Factor = Tier 1 – $2.85 (Fiscal Year 2011 Rates)
>5<8 Peaking Factor = Tier 2 – $5.21
>8 Peaking Factor = Tier 3 – $8.90

21

Sample Cost of Service Calculation
Tier 3 Placement
7/1/2007 7/2/2007 7/3/2007 7/4/2007 7/5/2007 7/6/2007 7/7/2007 7/8/2007 7/9/2007
Hoover, LLC 0 524 90 24 81 85 39 41 19
2015 Washtenaw Ave.
Acct 522061-145709 7/20/2007 7/21/2007 7/22/2007 7/23/2007 7/24/2007 7/25/2007 7/26/2007 7/27/2007 7/28/2007
853 22 28 541 337 86 382 315 134

8/1/2007 8/2/2007 8/3/2007 8/4/2007 8/5/2007 8/6/2007 8/7/2007 8/8/2007 8/10/2007
1,937 830 2,697 821 1,064 1,540 498 110 169

9/20/2007 9/21/2007 9/22/2007 9/23/2007 9/24/2007 9/25/2007 9/26/2007 9/27/2007 9/28/2007
1,007 114 979 2,671 1,312 1,667 2,114 1,342 1,987

Total Consumption FY08 732.03/365 = 1.98
Avg Daily Consumption 2.00
Highest Daily Consump
between May - October
(7/1/07-10/30/07 and
5/1/08 - 6/30/08)
8/3/2007 26.97 43 hours - Exclude
9/23/2007 26.71 42 hours - Exclude
9/26/2007 21.14 Top 1 - Eliminate
9/28/2007 19.87 Top 2 - Eliminate
8/1/2007 19.37 Top 3 - Use for Peaking Factor 19.37/2.00 = 9.685
Peaking Factor 9.68 Tier 3

22

MDM Benefits for the Utility and its Customers

• Enhanced billing accuracy and timeliness of billing (no more estimates or
“false” readings; meter data is available for billing purposes whenever we are)
• Customer self-service applications (i.e. near real-time consumption data on-
line)
• Providing meter data to customers in a meaningful way helps them to better
understand the “value” of water and manage their own water usage
• Customer perceptions of the value of water has resulted in “on-peak”
reductions
• Daily reads allow the utility to look at daily demand and peak to average ratios
• New commercial rate structures are based on peak to average ratio
calculations
• The data and resulting rate plans allow the utility to distribute costs where the
costs are created instead of a flat rate across the entire customer base or
customer class
• Improved business processes (i.e. more accurate cost recovery for water
service; weekly “0” usage/negative usage reports; tamper detection)
• There is future applicability to leak detection and water loss management

23

For more information:
www.a2gov.org

Water and Waste Digest – February 2009
Automated Meter Reading Supports Cost of Service Rates in Ann Arbor
http://www.wwdmag.com/Measuring-the-Value-of-Water-article10113

US Mayor Newspaper – April 2009
Advanced Metering Infrastructure Encourages Conservation Through Automation in Ann Arbor
http://usmayors.org/usmayornewspaper/documents/04_27_09/pg23_ann_arbor.asp

Metering International – Issue 4 2009
Leveraging Technology for Improved Water Resource Management, Asset
Management, and Customer Service

WaterWorld – September 2009
Get Smart: Advanced Metering Means Wiser Rates and Consumers
http://www.waterworld.com/index/display/article-display/articles/water-utility-management/volume-
2/Issue_3/features/get-smart__advanced.html

24

Contact Information

Wendy Welser, Manager
Customer Service Center, City of Ann Arbor
wwelser@a2gov.org
(734)794-6321

25

APPENDIX
Other On-Line Options for Ann Arbor Residents/Customers

26

General Tab – Property/Parcel Information

27

On-Line Citizen Request System

GPS system locates
validated address; address
can be changed for
requested service

28


GPS system locates
validated address; address
can be changed for
requested service

29


The initiator selects the
service request type

30


The initiator provides
additional info about the
problem, as well as contact
information

31

Solar Potential Tab

32

StormWater Tab

33

StormWater Tab - Information

34

City of Ann Arbor: A Model for AMR/AMI Implementation and Assigning Costs Where They Occur

Recommandé

Recommandé

Contenu connexe

Similaire à City of Ann Arbor: A Model for AMR/AMI Implementation and Assigning Costs Where They Occur

Similaire à City of Ann Arbor: A Model for AMR/AMI Implementation and Assigning Costs Where They Occur (20)

Plus de Center for Neighborhood Technology

Plus de Center for Neighborhood Technology (18)

Dernier

Dernier (20)

City of Ann Arbor: A Model for AMR/AMI Implementation and Assigning Costs Where They Occur