Drinking from “The Cloud”

There have been profound technological changes over the past century, but aspects of our drinking water system do not reflect many of these advancements. The way we measure and monitor drinking water use has not changed since the mid-1900s, long before most could envision technologies such as sensor networks or “the cloud.”

This lack of monitoring technology, combined with aging infrastructure, causes us to lose approximately 14 percent of drinking water annually—this is water that has been stored, pumped, treated and distributed, at great cost, but generates no revenue for the utility. New data-driven technology exists to reduce or even eliminate these losses. The federal government should promote adoption of smart water technology by creating new provisions in the Drinking Water State Revolving Fund (DWSRF) in its 2016 budget.

The DWSRF is a loan program administered through the Environmental Protection Agency (EPA) and has been used since 1996 for public utilities to finance upgrades to their physical infrastructure. The DWSRF is used heavily by small utilities who would otherwise struggle to attract private financing to help pay for meters or sensors to track the amount of water distributed and used. 

Without metering, utilities must charge based on assumed water use—a flat monthly fee regardless of how much water is actually used—and they are unable to use price signals to curb water use, or even identify costly water waste.

Smart meters and sensors that use cloud-computing technology allow utilities to track water through much of the distribution system. New technology called Advanced Metering Infrastructure (AMI) can send data to the cloud every 15 minutes, allowing identification of leaks and other problems. Santa Maria, Calif., installed AMI on one third of its water connections and within one year the city reduced its water loss by 4 percent, accounting for $600,000 in revenue.

Paying for these approaches requires prioritizing data and analysis as part of utility operations. These types of systems and services can be expensive, which is a challenge for already cash-strapped utilities.   The DWSRF could be used to finance the installation of such monitoring technology as a basic first step to reduce water waste. This is an appropriate role of federal finance, which has long played a part in promoting new technologies, much like the production tax credits helped deploy wind and solar in an effort to modernize the energy industry.

Advanced metering projects are accepted through the current DWSRF criteria, but two new provisions in the DWSRF could give the technology a boost. First, the EPA should direct at least 5 percent of the DWSRF towards advanced metering projects. The initial capital costs for installing the technology is in the millions of dollars for a utility that wants several thousand meters. These funds should be prioritized for cities that lack metering.

Second, because there are ongoing data-storage needs with this data-intensive technology, the EPA should include a provision that it will help utilities with data storage costs for the first three years. After three years, utilities should be well on their way to cost savings and knowledge of their system.

New provisions for DWSRF would modernize our water utilities to be data-driven rather than continue to leave us responding to belated physical infrastructure problems. Setting up these systems will also create the data technology infrastructure that will lead to future advancements.

DeMeester is a policy associate and Doyle is director of the Water Policy Program at the Nicholas Institute for Environmental Policy Solutions, Duke University.