Impact of digital water metering on pricing and billing
Impact of digital water metering on pricing and billing
Digital water metering is a disruptive technology with broad implications for utilities and has direct impact on customer experience. Producing rich digital data, providers can use digital water metering to gain valuable insight into customer usage patterns and behaviours. A significant opportunity from digital water metering is restructuring pricing models that leverage the real-time data and intelligence to reward desired consumption behaviours. In this paper, “Pricing for digital water metering”, we consider the impact of digital metering on pricing and billing.
In August 2018, KPMG released a paper titled “Digital water metering – the time is now”. In this paper, we discussed the drivers for change towards digital metering, the technology on offer, lessons learned from the Victorian electricity industry’s rollout, and provided insights into the journey that a water business should undertake to prepare for a rollout. This paper is an extension to "the time is now” paper and considers the impact of digital metering on a business’s pricing and billing.
Digital water meters are coming. In the 2018 Victorian water price review, seven urban authorities committed to trials to test the potential benefits of digital meters, or to a broader rollout across their region. The Melbourne metropolitan water businesses are also developing a Digital Metering Joint Program, aimed at ensuring the best outcome across all of Melbourne based on maximising scale efficiencies.
To support digital metering, businesses will need to determine the necessary arrangements to realise the benefits. Tariffs, prices and billing are an essential component of this process. Effective use of digital meters in this space will require:
- customer education and empowerment – giving customers the tools to effectively utilise the information provided by digital meters
- tariffs that balance customer needs and the delivery of outcomes, while providing appropriate signals regarding the costs imposed on the network
- fit-for-purpose access to, and the dissemination of, real time information regarding consumption, network issues and billing
- more flexibility regarding the frequency, form and payment of customer bills.
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