Migration towards a technology supported integrated network management model

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1 Migration towards a technology supported integrated network management model Gonzalo Reyes B. Engineering, Planning and Tariff Management Manager ESSBIO - NUEVOSUR May 2017

2 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. Population Served Million inhabitants Annual demand Million m3 Annual revenues 1,422 Million US$ Assets Billion US$ Water production and wastewater treatment costs (average of 15 m3 / month) Denmark Germany USA Canada Chile Mexico 2

ESSBIO - NUEVOSUR CHILEAN WATER UTILITY SECTOR

Teachers Pension Plan (OTPP) 2 nd largest water

regions of Chile Nuevosur: 30-year concession Our

5 million people in 122 districts From small towns

9,800 km of drinking water networks 152 water

3 ESSBIO - NUEVOSUR CHILEAN WATER UTILITY SECTOR PROFILE 100% private company owned by Ontario Teachers Pension Plan (OTPP) 2 nd 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 ESSBIO NUEVOSUR ENGLAND 8,300 km of wastewater networks 98 wastewater treatment plants 3

4 The Catastrophe 27F :34 am

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6 Llacolén bridge over Biobío river

7 One building collapsed

8 Tsumani and riots: social unrest and hysteria

11 Damages in pumping stations

12 Daño en plantas de elevación de aguas servidas

14 Repairs works on a big sewage main

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

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

NON-REVENUE WATER IN ESSBIO NUEVOSUR The 8.

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

2% %NRW Essbio - Nuevosur 38% 21 36% mill m3 34% 34.

17 NON-REVENUE WATER IN ESSBIO NUEVOSUR The 8.8 earthquake in 2010 caused a lot of damage to our tank, network and plant infrastructure. 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 % 42% 40% 8.8 Chile earthquake 39.2% %NRW Essbio - Nuevosur 38% 21 36% mill m3 34% 34.7% 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.

18 NEED FOR CHANGE The poor performance level of our networks required making a change in our operational model and asset management. In 2015, we had the worst continuity index in the Chilean sanitation sector, paying out a total US$2 million in fines. We had poor quality information in regard to the network performance and the registering of events did not allow generating root-cause analysis. The NRW was stuck at around 36% and the reduction strategy was losing effectiveness. ESSBIO ESVAL NUEVOSUR AGUAS DEL VALLE AGUAS DE ANTOFAGASTA AGUAS CHAÑAR ESSAL AGUAS DEL ALTIPLANO AGUAS ARAUCANIA AGUAS ANDINAS AGUAS MAGALLANES AGUAS CORDILLERA Sectors with 4 or more cuts per semester: 2015 Chilean sanitation sector Network maintenance costs (million US$) Network maintenance costs were rising without managing to reverse the bad results

INTEGRATED NETWORK MANAGEMENT MODEL The new model incorporates the best practices of the

CURRENT SITUATION FUTURE SITUATION EXPECTED BENEFITS 1.

pressure control, high network coverage Online monitoring Reduction of bursts Reduction

Network operation monitoring Limited network monitoring Manual data analysis Online

consumption Smart meters More effective detection of unauthorized consumption Increase of

Operation Management High level of cuts and affected clients High level of fines Change

19 INTEGRATED NETWORK MANAGEMENT MODEL The new model incorporates the best practices of the sanitation industry to correct gaps of our traditional management model. CURRENT SITUATION FUTURE SITUATION EXPECTED BENEFITS 1. Pressure Management Inefficient pressure control Manual, off-line monitoring Effective pressure control, high network coverage Online 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 19

20 20 1. PRESSURE MANAGEMENT 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. 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. 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 35% %NRW Rancagua 30% 25% 20% 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 45% 40% 35% %NRW Linares 30%

2. NETWORK OPERATION MONITORING GOALS: Detection of problems for early attention of events: bursts, faults, communication problems, valve status, etc.

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

21 2. NETWORK OPERATION MONITORING 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) 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. ADVANCE TO DATE New SCADA in final stage of implementation Online diagnosis and monitoring systems undergoing test period 21

22 3. COMMERCIAL LOSS MANAGEMENT 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. Billing (m3) and %NRW Thousands %NRW of m3 50% %NRW % Billing % 20% 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. 22

23 4. OPERATIONAL MANAGEMENT 23 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: Reduction of 30% in unscheduled cuts for every 100km of network Sectors with 4 or more cuts % reduction of fines to 2016

5. STRUCTURAL PIPELINE DIAGNOSTICS GOALS: Get to know the structural status of buried pipelines

SITUATION Regulator requires structural condition reports There are non-invasive technologies

reasonable costs. ADVANCE TO DATE Leak detection and localization in 1,000 mm pipeline (3.

24 5. STRUCTURAL PIPELINE DIAGNOSTICS 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 Case: Mochita Chepe Pipeline Sensor in large D = 1,000 mm pipeline has allowed detecting and locating 2 leaks. Chepe Tanks 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 Aquarius Sensors Mochita DWTP Every day there is more technology available with direct use in drinking water pipelines 24

25 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. 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. Close event Event attention Signal monitoring Work order Event Event analysis 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. Process Technology Balance People 25

26 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. 26

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Revenue Management as a Customer Service. Ed Hackney

Revenue Management as a Customer Service Ed Hackney About Ed 14 years with SUEZ and United Water Revenue Management Operational Technology Engineering IT 2 Internet Startups 2 Big 4 consultancies BS Rutgers