Five ways water utilities can improve financial resilience

In times of economic uncertainty, water utilities are challenged to do more with less. It becomes even harder to balance operational requirements with financial sustainability and ratepayer concerns over affordability.

New productivity solutions driven by digital technologies can give water utilities bold new ways to optimise their cash flow while maintaining and improving services. These solutions are powered by what Xylem calls Decision Intelligence. This involves using advanced data analytics to help water system operators make the best capital and operating decisions.

These solutions have been designed specifically to help utilities increase financial and operational resilience, producing efficiencies over time that can ladder up to major cost savings.

1. Increase revenue without raising rates
A softer economy creates a double whammy: usage often drops, and rate increases become even more challenging to obtain. But what if you could improve cash flow from your existing revenue base without raising rates?

Xylem’s Hidden Revenue Locator uses cloud-based data analytics to pinpoint revenue losses from unreliable meters in your metering network, which can add up to a significant lost revenue stream for utilities. It enables utilities to unlock significant hidden revenue without the capital expense of a full-scale meter change-out or a rate increase. The result: improved cash flow without the headache.

$1 million identified
When Clayton County Water Authority in Georgia deployed Xylem’s Hidden Revenue Locator, the utility realised sizable gains. In just over four years, the utility identified over $1 million (S$1.4 million) of recoverable revenue from meter inaccuracies, including those in non-residential meters.

2. Redouble efforts to reduce energy consumption and third-party costs
Energy is one of the largest non-personnel costs in most water utilities, and new Decision Intelligence technologies can cut energy costs substantially to unlock cash flow. Secondary treatment of wastewater is often the biggest energy user. Xylem’s BLU-X solution uses artificial intelligence to optimise the treatment process, reducing energy costs and freeing up operators to focus on other value-added tasks.

In addition, Xylem’s Flygt Concertor, the world’s first wastewater pumping system with built-in intelligence, can reduce the energy consumption of a wastewater pumping station by up to 70 per cent.

Plant cuts energy use in wastewater treatment
In Germany, a wastewater treatment plant wanted to reduce energy and chemical consumption while increasing effluent water quality. It used Xylem’s BLU-X platform to predict and calculate the best set points to operate their aerators. The solution reduced aeration energy use by 26 per cent, corresponding to 1.1 million kWh annually – enough energy to power 64 homes for one year.

3. Optimise capital spend by renewing, not replacing assets
Capital budgets come under pressure during periods of slower growth, but the need to keep assets in working order does not go away. One way to stretch budgets without sacrificing operational resilience is to rehabilitate assets instead of replacing them.

Large valves are frequently replaced at substantial expense, when many can be rehabilitated to working condition at a fraction of the cost. Pipeline replacement projects often involve digging up and discarding perfectly good pipes. Xylem’s proactive asset management solutions can save millions of dollars by extending the life of their existing infrastructure, enabling utilities to stretch scarce capital dollars.

$800,000 saved
The city of Grand Rapids, Michigan, had limited information about which valves in its transmission system required attention and was considering replacing them at a cost of $125,000 (S$170,093) per valve. The city decided to have Xylem assess 20 large valves as part of a pilot programme. Xylem found that 12 of the valves worked quite well and rehabilitated the other eight to working order, saving the city $800,000 (S$1.1 million).

4. Shrink your capital improvement plan through intelligent optimisation
Water utilities often invest millions or billions of dollars in capital improvement projects to expand capacity, in order to comply with regulations and consent decrees, or to create operational headroom. Xylem’s Decision Intelligence approach has shown that utilities can use real-time controls to make better use of their existing systems and reduce the scale of capital improvements needed to achieve their policy objectives.

$1 billion saved
Grand Rapids used Xylem’s BLU-X visualisation and analytics tools to assess planned infiltration and inflow mitigation projects. By linking these to a common analytic framework, the city concluded that many of these projects were not necessary and reduced its capital infrastructure programme to less than $50 million, instead of the original $1 billion (S$1.4 billion) estimate.

5. Improve efficiency through better workforce management
Many utilities use enterprise systems that capture high-quality data, but there is no easy way to share it across departments to make more efficient decisions about personnel and assets. Xylem solves this with Kona, a flexible platform for enterprise data integration, work dispatch and mobile field application.

$20 million saved
In Colorado, Denver Water needed a system that could integrate information between their customer billing system, computerised maintenance management system and GIS to support their staff. Xylem’s Kona platform was deployed to integrate these systems, which increased staff efficiency and reduced IT integration costs, leading to a savings of $20 million (S$27 million) over ten years.