City of Ann Arbor: A Model for AMR/AMIImplementation and Assigning Costs WhereThey Occur     Wendy Welser, Manager     Cus...
City of Ann Arbor, Michigan                                  © 2009 All rights reserved2
Ann Arbor at a Glance    •   Founded in 1824    •   27.7 square miles    •   114,000 residents    •   156 parks, 2,055.5 a...
Pre-AMR/AMI System Challenges    •   A single quarterly meter reading made it nearly impossible to assist        customers...
Why AMR/AMI?    •   Improve revenues through increased metering accuracy (opportunity for        meter replacement)    •  ...
© 2009 All rights reserved6
© 2009 All rights reserved7
Managing Meter Data for Our Customers:        Water Consumption Data Link                                             Also...
Customer Current vs. Prior Usage Comparisons                                                   © 2009 All rights reserved9
Viewing Daily Water Usage Records for          Highs, Lows and Anomalies                                             © 200...
5-Day Anomaly Identified                                © 2009 All rights reserved11
Graph Usage Trends and Download Data                                            © 2009 All rights reserved12
Pre-MDM Cost of Service Calculations                                             City of Ann Arbor Water System Allocation...
City of Ann Arbor Water System Allocations                                      (Carter & Burgess Report)     • The “repor...
City of Ann Arbor Water System Allocations                                        (Carter & Burgess Report)     • To accom...
Cost of Service: Inclining Block Rate Structure     The study’s calculations resulted in the following proposed rates, whi...
Cost of Service: Inclining Block Rate Structure     •   First effort (pre-MDM) at developing Cost of Service rates     •  ...
Cost of Service:       Residential Customer Class 4-Tier Inclining Block Rate Structure             Actual Rates for July ...
Peak Day vs. Average Day by Year                             31                             28       Millions of Gallons  ...
Cost of Service Rate Structure                   Using City of A2 System AMI System Data     •   Implemented July 1, 2008 ...
Cost of Service Calculations     •   Usage for the year / # of days in the year = average daily demand     •   Find 3 high...
Sample Cost of Service Calculation                                         Tier 3 Placement                               ...
MDM Benefits for the Utility and its Customers     •   Enhanced billing accuracy and timeliness of billing (no more estima...
For more information:     www.a2gov.org     Water and Waste Digest – February 2009     Automated Meter Reading Supports Co...
Contact Information     Wendy Welser, Manager     Customer Service Center, City of Ann Arbor     wwelser@a2gov.org     (73...
APPENDIX     Other On-Line Options for Ann Arbor Residents/Customers                                                      ...
General Tab – Property/Parcel Information                                                 © 2009 All rights reserved27
On-Line Citizen Request System                                   GPS system locates                               validate...
On-Line Citizen Request System                                   GPS system locates                               validate...
On-Line Citizen Request SystemThe initiator selects the service request type                                              ...
On-Line Citizen Request System   The initiator provides  additional info about theproblem, as well as contact         info...
Solar Potential Tab                           © 2009 All rights reserved32
StormWater Tab                      © 2009 All rights reserved33
StormWater Tab - Information                                    © 2009 All rights reserved34
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City of Ann Arbor: A Model for AMR/AMI Implementation and Assigning Costs Where They Occur

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

  1. 1. City of Ann Arbor: A Model for AMR/AMIImplementation and Assigning Costs WhereThey Occur Wendy Welser, Manager Customer Service Center, City of Ann Arbor © 2009 All rights reserved
  2. 2. City of Ann Arbor, Michigan © 2009 All rights reserved2
  3. 3. 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 © 2009 All rights reserved3
  4. 4. 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 © 2009 All rights reserved4
  5. 5. 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 © 2009 All rights reserved5
  6. 6. © 2009 All rights reserved6
  7. 7. © 2009 All rights reserved7
  8. 8. 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 © 2009 All rights reserved8
  9. 9. Customer Current vs. Prior Usage Comparisons © 2009 All rights reserved9
  10. 10. Viewing Daily Water Usage Records for Highs, Lows and Anomalies © 2009 All rights reserved10
  11. 11. 5-Day Anomaly Identified © 2009 All rights reserved11
  12. 12. Graph Usage Trends and Download Data © 2009 All rights reserved12
  13. 13. 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% © 2009 All rights reserved13
  14. 14. City of Ann Arbor Water System Allocations (Carter & Burgess Report) • 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 © 2009 All rights reserved14
  15. 15. City of Ann Arbor Water System Allocations (Carter & Burgess Report) • 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 © 2009 All rights reserved15
  16. 16. 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 Rate per unit of service $ 9.00 $ 1.92 PUBLIC SCHOOLS Rate per unit of service $ 9.00 $ 1.92 WATER ONLY Rate per unit of service $ 9.00 $ 2.92 FIRE SERVICE Rate per unit of service $ 18.00 © 2009 All rights reserved16
  17. 17. 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 © 2009 All rights reserved17
  18. 18. 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 © 2009 All rights reserved18
  19. 19. 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. © 2009 All rights reserved19
  20. 20. 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. © 2009 All rights reserved20
  21. 21. 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 © 2009 All rights reserved21
  22. 22. 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 © 2009 All rights reserved22
  23. 23. 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 © 2009 All rights reserved23
  24. 24. 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 © 2009 All rights reserved24
  25. 25. Contact Information Wendy Welser, Manager Customer Service Center, City of Ann Arbor wwelser@a2gov.org (734)794-6321 © 2009 All rights reserved25
  26. 26. APPENDIX Other On-Line Options for Ann Arbor Residents/Customers © 2009 All rights reserved26
  27. 27. General Tab – Property/Parcel Information © 2009 All rights reserved27
  28. 28. On-Line Citizen Request System GPS system locates validated address; address can be changed for requested service © 2009 All rights reserved28
  29. 29. On-Line Citizen Request System GPS system locates validated address; address can be changed for requested service © 2009 All rights reserved29
  30. 30. On-Line Citizen Request SystemThe initiator selects the service request type © 2009 All rights reserved30
  31. 31. On-Line Citizen Request System The initiator provides additional info about theproblem, as well as contact information © 2009 All rights reserved 31
  32. 32. Solar Potential Tab © 2009 All rights reserved32
  33. 33. StormWater Tab © 2009 All rights reserved33
  34. 34. StormWater Tab - Information © 2009 All rights reserved34
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