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Insight
Reducing bills, changing behaviours – and a generational opportunity for engagement?
When it comes to engaging customers about smart meters, the potential for saving money is likely to be key, experts agree. Mike Gauterin, customer service and technology director at United Utilities, says: “We see smart metering as a huge opportunity to reduce leakage and consumption. But enabling our customers to save money is the pull for them.”
Reducing bills is a tangible benefit of metering. “Because you take control, you are billed off your consumption,” Gauterin explains. “Then you can take action to adjust your water consumption and improve your water efficiency which in turn helps your bills." Indeed, United Utilities offers a ‘Lowest Bill Guarantee’ which ensures you won't pay more for your water after installing a meter than you would have on a fixed rate during a two-year trial period. This is an important part of its engagement strategy to make sure that more customers move to a metered charge.
Installation of smart meters also provides a rare opportunity for water companies to engage with customers on the doorstep. “My firm view is that if you are at somebody’s house whacking a meter in the ground, you should knock on the door and say, ‘we’re here putting a smart meter outside your house: this is why it is important and what you can expect to see happening over time’. And then outlining what you need from them to overcome the national challenge we have from water scarcity,” says Reilly.
Dady says that rather than a smart meter installation being a “silent customer journey” the rollout represents “a once-in-a-generation opportunity to really engage with your customer base”.
Reilly believes water companies may not be “focusing enough on what they need to have in place to change the behaviour of customers”. Announcing the installation of a smart meter without having a way of presenting the data to consumers in a way that makes sense for them is a mistake, he adds. “On the other hand, if you put a smart meter in and you have a digital data solution and present that to the customer instantly, they see the value, your C-MeX goes up, and you can start shifting customer behaviour.”
“Because you take control, you are billed off your consumption. Then you can take action to adjust your water consumption and improve your water efficiency which in turn helps your bills."”
Mike Gauterin, United Utilities.
Partnerships, supply chain constraints, and contracts
United Utilities serves 3.3 million household customers and about 200,000 businesses in the Northwest. It has ordinary meter / AMR penetration of about 50% on the retail side but plans to install 190,000 smart meters a year every year over AMP8. By comparison, in AMP7, United Utilities installed about 190,000 thousand meters in total.
The huge-scale up is made possible by partnerships with Arqiva, which is building out the communications infrastructure for UU’s smart meter network, and by providing consistent visibility of demand to the supply chain. “We are doing 190,000 a year in a flat profile because that gives our supply chain certainty so it can resource to that level. We needed to design a strategy that works for the supply chain. Consistency guarantees the work will stay around, and that’s really good from the supplier side,” explains Gauterin.
“What we need for smart metering is a metronome-like deployment.”
But that rhythm has the potential to be disrupted by constraints in the supply base. Or as Dady says, “one of the main things we hear from water companies is nervousness about the supply chain. A lot of the contracts that have already been awarded have gone to the same suppliers, so is there a dependence on those meter manufacturers to deliver and increase their manufacturing capacity to meet demand? Are they actually going to be able to meet the demands of AMP8? What happens if we accelerate?”
Thames Water, one of the pioneering companies when it comes to smart metering in the UK, says a good relationship with suppliers has been crucial to it achieving around 60% meter penetration to date. Mark Cooper, head of smart metering at Thames Water, explains: “The metering programme at Thames is of such a scale that we have a dedicated centre in Langley, Berkshire, where we co-locate with our suppliers: the mainstay of the programme has been a solid relationship with them.”
Thames partnered with Arqiva to construct the communications network for its smart meter programme in London. Across the Thames Valley, the company will be using a Vodafone NBIOT (Narrowband Internet of Things) system. This effectively gives the utility 96% coverage of the area overnight. “In London, we had to move to smart metering where Arqiva’s network was being built out. Whereas for Thames Valley, I can go where there is most value today.” This flexibility is important. “We had a hot weather incident earlier on in the year in Slough, Wycombe and Aylesbury, so we’re putting meters in that area, and we’re not having to wait for masts to go up.
“That is allowing us to deploy the programme differently, maximising the demand reduction benefits faster and complements the existing partnerships we already have.”
The communications network is just one element of a rollout. “Water companies may have to manage construction contracts, installation, communications – commercially, you need an absolute Swiss army knife to fit everything together,” says Simon Bryant, commercial and finance director at Horizon Water Infrastructure.
It’s for this reason that smart Metering-as-a-Service (MaaS) is beneficial, says Dady. “You pay a fee per meter per month and get a completely turnkey, hands-off smart metering solution.
“As a water company you want to focus on the things you need to focus on, not managing 10 different contracts across the supply chain and getting it all right.
“MaaS derisks everything. The big advantage is derisking delivery.”
“One of the main things we hear from water companies is nervousness about the supply chain. A lot of the contracts that have already been awarded have gone to the same suppliers, so is there a dependence on those meter manufacturers to deliver.”
Tanya Dady, Dayworth Consulting
