Asset Management Economic Analysis for Small Meter Replacement Eric Brainich Asset Manager Portland...
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Asset Management Economic Analysis for Small Meter Replacement Eric Brainich Asset Manager Portland Water Bureau May 2008
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Asset ManagementEconomic Analysis for Small Meter Replacement
Eric BrainichAsset ManagerPortland Water BureauMay 2008
Small meter in Portland
Portland Water Bureau small meters
Replacement cost = $13 million
Annual income measured by small meters:$23 million for water$56 million for sewer
Size Count
5/8” 149,000
3/4” 14,000
1” 13,000
• 5/8” meters• Estimate meter degradation curve• Calculate unrecorded water revenue loss as
meter accuracy declines during life of meter• Cost of replacing meter• Minimize life-cycle cost of meters
Methodology
Factors to consider in estimating degradation:• Make/model of meter
Model A & Model B
• Consumption (vs. age) of meter500 / 1000 / 1500 / 2000 / 2500 / 3000 ccf
• Test flow ratesLow = 0.25/0.5/1.0 gpmMedium = 3 gpmHigh = 10 gpm
• Weighted flow ratesLow = 15%Medium = 75%High = 10%
Estimating meter degradation
Estimating meter degradation
• Random sample of 441
5/8” meters (222 of Model A
and 219 of Model B)
• Minimum 30 samples for
each model and
consumption category
• Plotted on GIS to provide qualitative check to ensure randomness of sample data
Portland Water BureauMeter Shop
Meter Test Results
Accuracy vs. Flow Rate
75
80
85
90
95
100
0 2 4 6 8 10Flow Rate (gpm)
Acc
ura
cy (
%)
500 ccf 1000 ccf 1500 ccf
2000 ccf 2500 ccf 3000 ccf
Meter Test ResultsMeter Model A y = -0.0025x + 100.37
6065707580859095
100105
0 500 1000 1500 2000 2500 3000 3500
Consumption (ccf)
Ac
cu
rac
y (
%)
Meter Model B y = -0.0007x + 100.27
606570
75808590
95100105
0 500 1000 1500 2000 2500 3000 3500
Consumption (ccf)
Ac
cu
rac
y (
%)
Economic Analysis – Least Cost Life Cycle
Consump. (ccf)
#Years (avg. Pdx Customer)
Degradation Profile
0 100.00100 1.3 99.87200 2.7 99.75300 4.0 99.62400 5.4 99.50500 6.7 99.37600 8.0 99.25700 9.4 99.12800 10.7 98.99900 12.1 98.87
1000 13.4 98.741100 14.7 98.621200 16.1 98.491300 17.4 98.371400 18.8 98.241500 20.1 98.111600 21.4 97.991700 22.8 97.861800 24.1 97.741900 25.5 97.612000 26.8 97.492100 28.1 97.362200 29.5 97.242300 30.8 97.112400 32.2 96.982500 33.5 96.86
Economic Analysis – Least Cost Life Cycle
Consump. (ccf)
#Years (avg. Pdx Customer)
Degradation Profile
PDX Incremental Unrecorded Water (ccf)
0 100.00100 1.3 99.87 0.2200 2.7 99.75 0.4300 4.0 99.62 0.7400 5.4 99.50 0.9500 6.7 99.37 1.1600 8.0 99.25 1.3700 9.4 99.12 1.6800 10.7 98.99 1.8900 12.1 98.87 2.0
1000 13.4 98.74 2.21100 14.7 98.62 2.41200 16.1 98.49 2.71300 17.4 98.37 2.91400 18.8 98.24 3.11500 20.1 98.11 3.31600 21.4 97.99 3.51700 22.8 97.86 3.81800 24.1 97.74 4.01900 25.5 97.61 4.22000 26.8 97.49 4.42100 28.1 97.36 4.72200 29.5 97.24 4.92300 30.8 97.11 5.12400 32.2 96.98 5.32500 33.5 96.86 5.5
Economic Analysis – Least Cost Life Cycle
Consump. (ccf)
#Years (avg. Pdx Customer)
Degradation Profile
PDX Incremental Unrecorded Water (ccf)
PDX Incremental
Lost Revenue ($)
0 100.00100 1.3 99.87 0.2 0.76200 2.7 99.75 0.4 1.53300 4.0 99.62 0.7 2.29400 5.4 99.50 0.9 3.05500 6.7 99.37 1.1 3.81600 8.0 99.25 1.3 4.58700 9.4 99.12 1.6 5.34800 10.7 98.99 1.8 6.10900 12.1 98.87 2.0 6.86
1000 13.4 98.74 2.2 7.631100 14.7 98.62 2.4 8.391200 16.1 98.49 2.7 9.151300 17.4 98.37 2.9 9.921400 18.8 98.24 3.1 10.681500 20.1 98.11 3.3 11.441600 21.4 97.99 3.5 12.201700 22.8 97.86 3.8 12.971800 24.1 97.74 4.0 13.731900 25.5 97.61 4.2 14.492000 26.8 97.49 4.4 15.252100 28.1 97.36 4.7 16.022200 29.5 97.24 4.9 16.782300 30.8 97.11 5.1 17.542400 32.2 96.98 5.3 18.312500 33.5 96.86 5.5 19.07
Economic Analysis – Least Cost Life Cycle
Consump. (ccf)
#Years (avg. Pdx Customer)
Degradation Profile
PDX Incremental Unrecorded Water (ccf)
PDX Incremental
Lost Revenue ($)
Meter Replace. Cost ($)
PDX Cummul. Cost ($)
0 100.00 64.77 64.77100 1.3 99.87 0.2 0.76 65.53200 2.7 99.75 0.4 1.53 67.06300 4.0 99.62 0.7 2.29 69.35400 5.4 99.50 0.9 3.05 72.40500 6.7 99.37 1.1 3.81 76.21600 8.0 99.25 1.3 4.58 80.79700 9.4 99.12 1.6 5.34 86.13800 10.7 98.99 1.8 6.10 92.23900 12.1 98.87 2.0 6.86 99.09
1000 13.4 98.74 2.2 7.63 106.721100 14.7 98.62 2.4 8.39 115.111200 16.1 98.49 2.7 9.15 124.261300 17.4 98.37 2.9 9.92 134.181400 18.8 98.24 3.1 10.68 144.861500 20.1 98.11 3.3 11.44 156.301600 21.4 97.99 3.5 12.20 168.501700 22.8 97.86 3.8 12.97 181.471800 24.1 97.74 4.0 13.73 195.201900 25.5 97.61 4.2 14.49 209.692000 26.8 97.49 4.4 15.25 224.942100 28.1 97.36 4.7 16.02 240.962200 29.5 97.24 4.9 16.78 257.742300 30.8 97.11 5.1 17.54 275.282400 32.2 96.98 5.3 18.31 293.592500 33.5 96.86 5.5 19.07 312.66
Economic Analysis – Least Cost Life Cycle
Consump. (ccf)
#Years (avg. Pdx Customer)
Degradation Profile
PDX Incremental Unrecorded Water (ccf)
PDX Incremental
Lost Revenue ($)
Meter Replace. Cost ($)
PDX Cummul. Cost ($)
PDX Average
Cost ($/ccf)
0 100.00 64.77 64.77100 1.3 99.87 0.2 0.76 65.53 0.6553200 2.7 99.75 0.4 1.53 67.06 0.3353300 4.0 99.62 0.7 2.29 69.35 0.2312400 5.4 99.50 0.9 3.05 72.40 0.1810500 6.7 99.37 1.1 3.81 76.21 0.1524600 8.0 99.25 1.3 4.58 80.79 0.1346700 9.4 99.12 1.6 5.34 86.13 0.1230800 10.7 98.99 1.8 6.10 92.23 0.1153900 12.1 98.87 2.0 6.86 99.09 0.1101
1000 13.4 98.74 2.2 7.63 106.72 0.10671100 14.7 98.62 2.4 8.39 115.11 0.10461200 16.1 98.49 2.7 9.15 124.26 0.1036
1300 17.4 98.37 2.9 9.92 134.18 0.1032
1400 18.8 98.24 3.1 10.68 144.86 0.10351500 20.1 98.11 3.3 11.44 156.30 0.10421600 21.4 97.99 3.5 12.20 168.50 0.10531700 22.8 97.86 3.8 12.97 181.47 0.10671800 24.1 97.74 4.0 13.73 195.20 0.10841900 25.5 97.61 4.2 14.49 209.69 0.11042000 26.8 97.49 4.4 15.25 224.94 0.11252100 28.1 97.36 4.7 16.02 240.96 0.11472200 29.5 97.24 4.9 16.78 257.74 0.11722300 30.8 97.11 5.1 17.54 275.28 0.11972400 32.2 96.98 5.3 18.31 293.59 0.12232500 33.5 96.86 5.5 19.07 312.66 0.1251
Economic sensitivity analysis
COP small meter program costsYrs. to replace Accuracy Cost
Cost difference
Cost of replacing meters $945,400 $290,892Annual unrecorded water loss @ 900 ccf 12 98.8% $450,885 -$200,393TOTAL COST $1,396,285 $90,499Cost of replacing meters $654,508Annual unrecorded water loss @ 1300 ccf 17 98.3% $651,279TOTAL COST $1,305,787Cost of replacing meters $500,506 -$154,002Annual unrecorded water loss @ 1700 ccf 23 97.8% $851,672 $200,393TOTAL COST $1,352,178 $46,392
• Removal from service based on accuracy and meter type.
• Recommends using sample test data to identify groups of meters with accuracy problems to ensure money used to exchange meters is spent on the poorest performing meters.
1/ Taken from M6 Manual
AWWA meter guidelines1
• Least-cost life-cycle analysis used to justify replacement timing (ensures cost of program not more than “revenue loss” or rate increase needed to cover unrecorded water usage)
• Random sample of meters • Weighted flow rates depend upon local
consumption patterns
Conclusions & Recommendations
