As smart cities proliferate, utility providers are poised to become the next wellspring of innovation.
analysts predicted 80% of worldwide energy suppliers will use digital customer engagement solutions by 2026 to cater to the appetites of millennials and Gen Z, which will make up the majority of the utility industry鈥檚 customer base. A survey of Asia-Pacific city planners found they planned to prioritize initiatives that would manage critical resources like water using smart meters.
Similar to societal norms around sustainability, smart cities as a concept has evolved and expanded. According to James McClelland, senior global director of Industry Marketing for Utilities at SAP, organizations serving every community 鈥� from rural to urban and everything in between 鈥� care about efficiency, sustainability, and the circular economy.
鈥淲hether it鈥檚 water, gas, electricity, or other natural and energy resources, utilities want to become more efficient and reduce waste and lower carbon emissions for a more sustainable environment,鈥� said McClelland. 鈥淭he real power of a smart city comes down to data analytics from innovations like smart meters. With a better understanding of individual usage, utility providers can help customers make sustainable choices based on their household needs, collectively making the world a better place.鈥�
Case in point is American Water, which provides regulated and regulated-like drinking water and wastewater services to an estimated 14 million people in 24 states. Neeru Sharma, the company鈥檚 senior director of Business Partnership and Delivery, said the company distills every major decision into two questions: How will it make our company more efficient? And how will it positively change the customer experience?
I talked with Sharma at the event, where she told me about her company鈥檚 digitalization plans that included a network of smart meters based on the Internet of Things (IoT).
鈥淲e are a purpose-driven, customer-focused business,鈥� said Sharma. 鈥淥ur company vision revolves around efficient operations to deliver a superior customer experience and contribute to a sustainable society with better water consumption management. Going to a cloud-based platform is our first step in becoming an intelligent enterprise.鈥�
Operational Efficiencies from IoT-Based Sensors
American Water is at the vanguard of the utility industry鈥檚 digitalization trend that is fueled by consumer demographics and sustainability mandates.
Sharma equated technology innovation with her company鈥檚 business agility and resilience. Headquartered in New Jersey, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company.
American Water recently selected to collect real and near real-time data from meters, as well as 聽to connect information to billing and other systems. Unlike yesteryear鈥檚 monthly meter readings that relied on resource-intensive truck rolls, sensor-based smart meters automatically capture water usage data more frequently, giving American Water a clearer understanding of actual water consumption levels for billing and planning purposes. Access to real-time and on-demand data will also flag potential problems, helping the company keep meters in peak working condition.
鈥淲e won鈥檛 have to wait until the end of the month for usage data,鈥� said Sharma. 鈥淲e can identify and manage meter read issues, consumption patterns, and potential leak patterns at scale in buildings, and connect it directly to our billing systems. As a water utility, it鈥檚 very important for us to use our own resources to efficiently and better manage water distribution across our communities.鈥�
Analytics Behind Sustainable Business
Of course, sustainable water management does not mean reducing customer access to water. In this case, it translates to analyzing and acting on data from smart meters. For example, an unnatural spike in water consumption beyond typical usage rates could indicate a potential leak or a malfunctioning meter.
鈥淵ou need solutions that will provide up-to-the-minute information, surfacing water consumption trends on a daily basis,鈥� said Sharma. 鈥淎nalyzing that data, we can see if a customer鈥檚 consumption is consistent with or outside of historical norms. Having this on-demand data available can help us conduct proactive maintenance to prevent disruptions.鈥�
Sharma credited technology innovations like smart meters with helping the company meet sustainability objectives and build trusted relationships with customers.
鈥淚t takes a lot of steps to deliver clean water from the source to the customer鈥檚 faucet,鈥� she said. 鈥淭echnology is integral to providing that visibility into our entire process of bringing quality water in compliance with regulations to our customers. We want our customers to be fully aware of their water usage and what they can do for a more sustainable community. Data transparency is just as important to tracking our performance against ESG objectives.鈥�
Smart Communities are the Future
Smart meters are a harbinger of what鈥檚 to come as utilities grapple with managing water, arguably the most finite valuable natural resource on the planet. Leading utility providers are gearing up for major transformation.
analysts predicted that by next year, stricter environmental regulations will have pushed 30% of water utilities to invest in integrated information technology (IT) 聽and operational technology (OT) data. Forrester analysts said that by 2024, 40% of energy suppliers will have lifted the core business logic from billing to customer data and experience management, becoming three times more effective at marketing new products.
Between climate change risks and consumer and community demands, water utilities need technology more than ever to boost efficiencies that improve the customer experience, representing the dawn of the next generation of sustainable smart communities.
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