Migration towards a technology supported integrated network management model Gonzalo Reyes B.

Engineering, Planning and Tariff Management Manager

ESSBIO - NUEVOSUR

May 2017

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CHILEAN WATER UTILITY SECTOR PROFILE

CHILE:

• Surface area 756,000 km2; length 4,500 km

• Varied geography, 90% urban population

• Drinking water and wastewater services are served to 96% of the population by private regulated companies.

Water production and wastewater treatment costs (average of 15 m3 / month)

Denmark

Germany

USA Canada

Chile Mexico

1,422 Million

US$ Million

inhabitants

Annual demand

Annual revenues

Population Served

Assets

Million m3

Billion US$

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CHILEAN WATER UTILITY SECTOR PROFILE

ESSBIO NUEVOSUR ENGLAND

ESSBIO - NUEVOSUR

• 100% private company owned by Ontario Teachers Pension Plan (OTPP)

• 2nd largest water company (20% of the population)

• Operations in three regions of Chile

• Nuevosur: 30-year concession

Our operation area:

• 3.5 million people in 122 districts

• From small towns of 2,500 citizens to big cities of 500,000 citizens

• 9,800 km of drinking water networks

• 152 water production plants

• 8,300 km of wastewater networks

• 98 wastewater treatment plants

The Catastrophe

27F 2010 3:34 am

5

Llacolén bridge over Biobío river

One building collapsed

Tsumani and riots: social unrest and hysteria

Damages in pumping stations

Daño en plantas de elevación de aguas servidas

Repairs works on a big sewage main

Damages on big water treatment plant (2.4 m3/s)

Damages on main waste water treatment plant (1.6 m3/s)

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NON-REVENUE WATER IN ESSBIO – NUEVOSUR

After the February 2010 earthquake, we experienced a sharp rise in NRW, leading us to start a

loss reduction plan, which was mainly based on leak detection and repairs.

NRW reduction plan benefits:

• Savings of 21 million m3 a year,

• Equivalent to the consumption of

350,000 inhabitants (11% of current

sales).

The reduction has been obtained in a

profitable way.

As time has gone by, actions to

reduce losses have become less

effective.

39.2%

34.7% 34%

36%

38%

40%

42%

44%

2008 2009 2010 2011 2012 2013 2014 2015 2016

%NRW Essbio - Nuevosur

21 mill m3

8.8° Chile earthquake

The 8.8° earthquake in 2010 caused a lot of damage to our tank, network and plant infrastructure.

NEED FOR CHANGE

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The poor performance level of our networks required making a change in our operational model

and asset management.

0 100 200 300

AGUAS CORDILLERAAGUAS MAGALLANES

AGUAS ANDINASAGUAS ARAUCANIA

AGUAS DEL ALTIPLANOESSAL

AGUAS CHAÑARAGUAS DE ANTOFAGASTA

AGUAS DEL VALLENUEVOSUR

ESVALESSBIO

Sectors with 4 or more cuts per semester: 2015 Chilean sanitation sector

0

4

8

12

16

2012 2013 2014 2015

Network maintenance costs (million US$)

In 2015, we had the worst continuity

index in the Chilean sanitation sector,

paying out a total US$2 million in

fines.

Network maintenance costs were

rising without managing to reverse the

bad results.

We had poor quality information in

regard to the network performance

and the registering of events did not

allow generating root-cause analysis.

The NRW was stuck at around 36%

and the reduction strategy was losing

effectiveness.

INTEGRATED NETWORK MANAGEMENT MODEL

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The new model incorporates the best practices of the sanitation industry to correct gaps of our

traditional management model.

1. Pressure Management

Inefficient pressure control

Manual, off-line monitoring

Reduction of bursts

Reduction of losses

Reduction of costs

2. Network operation monitoring

Limited network

monitoring

Manual data analysis

Online network monitoring

Automated event

management and analysis

Early attention of events

Better planning

Reduction of losses

3. Commercial losses management

Old meter group

Ineffective detection of

unauthorized consumption

Smart meters

More effective detection of

unauthorized consumption

Increase of revenues

Reduction of costs

4. Operation Management

High level of cuts and

affected clients

High level of fines

Change of procedures

Centralized planning

Repairs without cuts

Minimize affected clients

Improve service

Reduce fines

5. Structural pipeline diagnostics

Pipeline status unknown

Demands from the

regulator

Non-invasive structure

diagnosis, inspection and

monitoring of the pipelines

Identification of

investment or renewal

needs

CURRENT SITUATION FUTURE SITUATION EXPECTED BENEFITS

Effective pressure control,

high network coverage

Online monitoring

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GOALS:

Reduce bursts (increase network’s service life)

Reduction of losses

Lower costs (emergencies, replacements, water production)

CURRENT SITUATION

50% of network with pressure control (360 systems)

Inefficient current control (high pressure variability)

Manual and off-line monitoring system

PROJECT

Installation of 667 online pressure sensors (SCADA)

Self-adjustable pressure regulation systems based on demand

Incorporation of pressure control to cover 76% of the network.

Sectorization of networks in larger locations (DMA)

ADVANCE TO DATE

20 intelligent pressure control systems for modulation as per state

of critical point and consumption variations (i20, Pegasus)

Final stage of 667 online pressure control points

Tests of i20 system for operational monitoring of pressure

reducing valves with software that detects anomalies and sends

warnings.

Case #1: Rancagua (230,000 inhabitants)

6 Intelligent pressure control systems +

overflow control in tanks. Annual benefits:

-Recovery of 3 million m3 (equivalent to

consumption of 50,000 inhabitants)

-Savings of US$200,000

20%

25%

30%

35%

2013 2014 2015 2016 2017

%NRW Rancagua

Case #2: Linares (90,000 inhabitants)

Pressure control + network repairs.

Annual benefits:

-Recovery of 685,000 m3 (equivalent to

consumption of 14,000 inhabitants)

-Savings of US$35,000

30%

35%

40%

45%

2013 2014 2015 2016 2017

%NRW Linares

1. PRESSURE MANAGEMENT

“Network pressure has a direct, approximately linear, relationship with physical losses. Pressure management (not necessarily reduction!) is of utmost importance, especially in low-pressure systems with poor infrastructure condition.” Source: The World Bank .

2. NETWORK OPERATION MONITORING

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GOALS:

Detection of problems for early attention of events: bursts, faults,

communication problems, valve status, etc.

Better planning and prioritization of network interventions

Reduction of losses (operational costs) and improvement of

service continuity

CURRENT SITUATION

Limited network monitoring (SCADA)

Manual data analysis

Large offer of low cost monitoring technologies with energy and

communications autonomy

Large offer in 24/7 data analysis and processing software

PROJECT

Operational monitoring of key variables: pressures, flows, tank

levels

Event management system (TaKaDú)

Leak detection and localization (Aquarius Spectrum)

ADVANCE TO DATE

New SCADA in final stage of implementation

Online diagnosis and monitoring systems undergoing test period

TaKaDú

73 locations, 2,400 km of network (25%)

Monitoring signals from flows, pressures

and tank levels.

Event management which allows prioritizing

according to the magnitude and economic

impact (cost of the loss).

AQUARIUS SPECTRUM (5 km of network)

Permanent acoustic sensors to detect and

locate leak events early.

Identifies sounds generated by leaks and

transmits the information via GPRS to the

server which analyzes the information and

calculates its location.

3. COMMERCIAL LOSS MANAGEMENT

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GOALS:

Increase revenues by reducing unauthorized consumption

Increase revenues through greater accuracy in metering

Lower reading and billing process costs

CURRENT SITUATION

Wide-ranging offer of low cost smart meters and remote reading

technology

Group of old, low accuracy meters

Manual reading

System to detect unauthorized consumption is ineffective and

does not cover all the clients

PROJECT

Install 330,000 smart meters (33% of the total)

Replace current reading for remote reading

Implement new more effective analysis model and cover 100%

of the clients to detect unauthorized consumption

ADVANCE TO DATE

Pilot project of 7,000 smart meters (0.7%), is in the hypothesis

validation process

New analysis model to increase unauthorized consumption

detection is in its final stage

Case: Ñipas (6,000 inhabitants)

Installation of 100% smart meters,

increased billing by 15% and reduced

%NRW by 11 points. The remote reading

has worked without any issues.

At a company level, we have

installed 7,000 meters and billing

has increased by 7%.

A migration strategy is being

developed from the pilot’s

results.

100

150

200

20%

30%

40%

50%

12015

4 7 10 12016

4 7 10 12017

Thousands of m3

%NRW

Billing (m3) and %NRW

2015 2016 2017

Billing

%NRW

4. OPERATIONAL MANAGEMENT

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GOALS:

Improve network performance at a low cost

Better efficiency in the use of resources

Improve service quality (continuity)

Focus on continuity to reduce sectors with 4 or more cuts.

Minimize the number of clients affected by cuts

CURRENT SITUATION

Regulator fines for each sector with 4 or more cuts in a year

75% of sectors affected by cuts do not have faults

Operation was focused on minimizing the repair time without

considering the number of clients affected

PROJECT

Centralized operation planning and analysis

Change of operational procedures

Incorporation of technologies to repair without cutting

Improve network’s sectorization

Change model to centralized work order dispatch

ADVANCE TO DATE

Installation of 300 cut valves and 4 pressure reducing valves

More than 1,200 repairs without cutting (clamps)

Interconnections for redundant supply and focalized

replacements of pipelines

In two years, the operational changes have

significantly reduced the number of service

cuts, the amount of sectors affected and the

fines:

36 34 35 29

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2012 2013 2014 2015 2016

Reduction of 30% in unscheduled

cuts for every 100km of network

753 749

495 418

300 251 138 80

2013 2014 2015 2016 2017 2018 2019 2020

Sectors with 4 or more cuts

50% reduction of fines to 2016

5. STRUCTURAL PIPELINE DIAGNOSTICS

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GOALS:

Get to know the structural status of buried pipelines

Identify investment requirements

Use methods that do not affect service continuity

CURRENT SITUATION

Regulator requires structural condition reports

There are non-invasive technologies available

PROJECT

Identify and implement the best technology which provides

conclusive results at reasonable costs.

ADVANCE TO DATE

Leak detection and localization in 1,000 mm pipeline (3.5 km)

Evaluation of technological solutions both for steel and concrete

pipelines

Case: Mochita – Chepe Pipeline

Sensor in large D = 1,000 mm pipeline has

allowed detecting and locating 2 leaks.

Chepe Tanks

Mochita DWTP

Aquarius Sensors

Every day there is more technology available with direct use in drinking water pipelines

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PROCESSES-FOCUSED IMPLEMENTATION

The actions described are complementary and must be covered in coordination with the different areas of the company to reach the objectives.

Technology

People Process

Balance

To successfully migrate to this model, it is necessary to consider:

• Adaptation of the operational processes to the new requirements.

• Operators trained and aligned with goals.

• Incorporation of technologies for the control, operational management and decision-making.

Signal monitoring

Event

Event analysis

Work order

Event attention

Close event

Event management cycle:

• Monitoring alone does not make sense if the solutions needed to close the events are not done.

• The involvement of all players in the processes is essential.

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PROCESSES-FOCUSED IMPLEMENTATION

It is very important to have a long-term plan with clear objectives and challenges to develop in spite of the daily contingencies of the operation. But considering our ever-changing environment, it is also important to be resilient and have the ability to adjust the plan according to the results, the availability of new technologies or external conditions, specially considering emergency cases like droughts, floods or earthquakes. Finally, suitable planning and control must be considered, taking care that results are achieved in a profitable manner.

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