40450
15 July 2021
How can we solve the problems with water metering?
Industry comment by Craig Mellor, Director, Deer Technology Ltd
Click here for a high resolution image
There are major problems with water metering in the UK's non-household market. Why is this when metering should be straightforward? Just install a meter on every consumer's water supply, measure consumption over a period of time and bill the consumer accordingly. Simple!
Unfortunately, the water industry is faced with a challenging situation, largely for historical reasons and we cannot turn the clock back. For a start, meters are owned by wholesalers, while retailers are the ones responsible for readings and reliant on those readings for revenue, and consumers want accurate and timely bills.
Long unread meters
A major problem stems from the incomplete market data that was made available when the non-household water market opened up four years ago. MOSL, the market operator for the non-household retail market in England, says 20% of meters in the non-household market are classified as Long Unread1. Given the reasons for them being long unread, such as unknown locations and inaccessibility, that figure is unlikely to improve significantly unless something changes in the market.
One of the consequences of unread meters is that bills are based on estimates. This is unpopular with consumers and can result in customers being overcharged, protracted disputes and a negative impact on the retailer's cashflow. When the market was opened up it was intended that fines for failing to read meters would incentivise retailers to locate and read the meters whose position was either unknown or too difficult to access. Four years on, the system of fines has clearly not worked well enough; the situation was exacerbated by the Covid pandemic and the suspension of fines for unread meters in March 2020. Fines have recently been reinstated but, as we know from previous experience, their effectiveness is likely to be very limited.
There is another Covid-related issue that could soon have an impact on retailers. Some businesses have been operating at a lower level than usual over the past year or more, yet a high percentage of water bills have been based on over inflated yearly volume estimates. Even though these estimates have been revised downwards to reflect the Covid situation, many consumers are likely to be overpaying. As a result, retailers' cashflow could suffer if consumers have to be refunded once meters start to be read again.
Read frequency
Under current regulations, non-household meters are read monthly or biannually, depending on the meter size and water consumption. This can lead to anomalies such as meters that are read monthly despite consumption being low. Although there is an ongoing consultation on the market code, there is no guarantee that changes will be agreed or when any changes will take effect. Retailers would prefer to see the frequency of readings reduced to annually for low-consumption customers because this will cut their meter reading costs; the disadvantage for customers is that it could then take longer to identify leaks - for which they are liable - because bills will be less frequent.
Even if meters are only read annually, concerns remain for retailers or the third parties contracted to read the meters on their behalf. Reading meters today still depends largely on a ‘man in a van' which impacts negatively on the retailer's environmental credentials. Furthermore, there are both direct and indirect costs associated with labour and vehicles. Health and safety is another issue to consider whenever people read meters, as meters are often located in difficult-to-access meter pits requiring the removal and replacement of heavy cast iron covers.
AMR and smart metering
Many in the water industry were optimistic that AMR (automatic meter reading) and smart metering would offer a solution to many of these problems. Nevertheless, the roll-out has been slow. According to MOSL1, 23.9% of meters have AMR technology, 1.5% are smart and the remaining 74.6% are still dumb. Replacing meters is expensive and adding smart technology incurs even greater costs due to the infrastructure requirements. Consequently, the return on investment is questionable, although wholesalers operating in areas with water stress might be driven to install AMR or smart meters in order to identify and rectify leaks.
Changing the meter also necessitates interrupting the supply, which is unpopular and potentially costly for non-household consumers that cannot operate while their supply is disconnected.
Even if a meter is of the pulsed type, in many cases a pulse reader would need to be installed by the wholesaler in order that the pulse feed can be sent via the network for translation into a meter reading.
Technological solutions
Unfortunately, there is no panacea; no automated system that can locate all meters and read them with the desired frequency, regardless of accessibility, and with no up-front investment or ongoing costs. But this is 2021, technology is evolving rapidly and the global pandemic has shown that technology can be an incredible enabler if we need it to.
Today, technology is available in the form of a compact device for retrofitting to existing meters. Integral opto-electronics capture images of the register that are then transmitted to a secure database for conversion to a meter reading. The hardware only takes round 15 minutes to fit without interrupting the supply, and the data is transmitted via GSM for accurate, near real-time billing. This technology can be implemented by anyone wanting to read meters remotely, whether they are a retailer, consumer or wholesaler.
Benefits
For retailers, the benefits include reduced reading costs, improved health and safety, and enhanced environmental credentials. In a market with little to differentiate retailers, this type of metering also offers a competitive advantage by helping to win new customers and improve customer retention. Alternatively, consumers may choose to install the devices so they no longer have to pay estimated bills. Meanwhile, wholesalers will appreciate the reliable, timely data that can give an early indication of leaks - which is particularly important in areas with water stress.
The National Trust is already using the patented devices, known as LimpetReaders, which have been developed by Deer Technology. A spokesperson from the National Trust said: "The LimpetReader is a great solution and gives us accurate meter reads and, importantly, we are only paying for what we use."
Deer Technology is hoping it can obtain blanket approval from wholesalers to enable meters to be upgraded without having to obtain permission on a meter-by-meter basis. Access to the data is governed by the contractual arrangements between the technology provider and its customers.
The LimpetReader is just one technological solution to the problem of water metering in the UK and it only addresses some of the challenges facing the industry. However, if LimpetReaders were installed on those meters whose locations are known, it would be a relatively quick, easy and cost-effective way to make a substantial difference.
For more information about Deer Technology's LimpetReader for converting analogue water meters to smart meters, go towww.deertechnology.comtelephone 01639 363146 or emailhello@deertechnology.com.
- MOSL report ‘A focus on accurate and timely consumption data' by John Davies and Martin Hall, 2021.
-ends-
With Compliments:
Taylor Alden
7 Bell Yard
London
WC2A 2JR
Tel: 020 3137 9041
margaret@tayloralden.co.uk