Consumers set to benefit in the long term
In a price-capping environment, exports have soared but the restriction has also stimulated technological advances and new initiatives in meter development and partnership agreements with all-round benefits for water customers.
Over the years, there has been general acceptance from the water industry that metering is the fairest way to charge for water, a move that every householder has the right to benefit from. In the UK, the Government and UK regulator Ofwat acknowledged this, and established free meter option regulations. This gave the right to every consumer to have a meter fitted at his or her household, free of charge. However, by capping the level of investment water companies could attribute to this cost, to £116.00 ($162), the options for meter preference became severely narrowed.
Effects of price capping
As a result, in order to meet this target, many water companies who wish to supply modern meters with automatic reading capabilities (AMR), which can both add value to the consumer in the long-term, and represent an investment asset to the water company, find themselves looking for cost savings elsewhere. Other water companies resort to installing basic commodity meters – these are low cost, but do not represent the same benefits to the consumer or water company.
The most efficient type of meters add value over the long-term by giving non-intrusive meter readings and the potential for future tariffing through data management. Typically, solid-state meters with in-built microprocessors offer enormous scope for the future and usually include automatic meter reading (AMR) as standard. Despite being more expensive than dumb meters, this technology provides substantial cost savings and improved customer service over the long-term.
At the moment, the type of meter installed in UK households through the free meter option – and the installation service – depends entirely on location. Each water company operates a different meter and installation policy, but the £116.00 maximum investment is ubiquitous throughout England & Wales.
Severn Trent Services company, Fusion Meters believes that this has brought about unexpected challenges for many in the industry. ‘There is no doubt that we have seen a sharp down turn in the electronic meter market,’ says Dr Neil Furmidge, Fusion’s Engineering Director. ‘With so many commodity type meters being installed, we have focussed our efforts on exports.’
Despite such challenges, companies like Fusion Meters are still busy developing new applications and technologies, pushing the industry ever forward into more efficient working practices. But increasingly, growth in its business comes from new markets rather than the UK, with most notable expansion in the U.S. – where meters are used throughout society and water providers have freedom of choice when procuring technology.
There is no doubting the important role of the price cap in ensuring control in the industry, but it leaves water companies without much choice when it comes to choosing the right technology for their customers and their business.
One positive move to help water companies cope with the price cap has recently been initiated by Severn Trent Services with the introduction of ‘MeterFlex’, a complete metering package that allows water companies to outsource this entire responsibility, from initial call through to meter installation and account management.
‘We have the expertise to provide the complete service,’ says Dr Neil Furmidge. ‘By outsourcing this requirement to our service arm, Integra Utility Services, water companies can feel safe in the knowledge that all business is secure under one roof as a service level agreement. We know what has to be achieved, and have the experience and knowledge base to achieve it.’
With ‘MeterFlex’, Severn Trent Services agree target outputs with a water company, gaining better economies of scale by keeping the complete process focused under a single entity. Severn Trent Services is confident that it can keep to the present investment cap while simultaneously fitting modern meters. However, despite the obvious benefits of having the UK’s foremost meter reading technology manufacturer as a key part of its portfolio of companies, Severn Trent Services is keen to emphasise that all types of technology, not just its own products from Fusion Meters, will be used.
A partnership through a flexible agreement will ensure that shared goals can and will be achieved, and aim to provide more benefits to consumers over the long-term.
These economies of scale will be achieved by understanding the water industry, and realising efficiencies that are available today. It will be helped by developed technologies, such as Fusion Meters’ recently launched RouteGenie(TM) software for the P2000 hand-held computer which can read any encoded meter or intelligent meter interface by using either inductive coupling or radio communications in a maximum of three seconds. Solutions like these allow full route management capabilities providing more cost-effective meter reading.
Radio reading also develops value for the household, since it causes no disruption from the meter reading process and efficiencies for the water company. Fusion also sees other benefits for the consumer, such as advances for interactive television that will allow use of the data transmitted by intelligent meters. Consumers could view their own personal water consumption, using data driven through a digital TV box, in the same way as bank or shopping information is presently available. In this way, consumers will be able to regulate water use, dependent on tariffs – a scenario that will be apparent in the future with increasing competition in the provision of water.
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