Performance Contracting for Advanced Metering Infrastructure Las Cruces Utilities Performance Contract with Johnson Controls Inc. (JCI) Presented at Two Nations One Water US-Mexico Border Water Summit 2019
2 What is a Performance Contract? Performance Contracts are a procurement vehicle that allows • Make improvements today and pay for those improvements over • time Payments made with savings or revenue generated from the • upgrades Named “performance contracting” because the results are • guaranteed.
3 Initial LCU Gas and Water Metering System 55,982 (69.23%) 19,252 (23.81%) 5,627 (6.96%)
4 Investment Grade Audit (IGA) • Perform field meter audit • Sample of Residential meters and Commercial meters • Identify water and wastewater revenue enhancements by implementation of new meter technology • Operating budget review • Identify potential reductions in operating expenses with implementation of AMI • Perform water audit to identify potential benefits of leak detection system • Quantify potential revenue enhancements from leak detection system • Develop a financial model that identifies costs and benefits
5 Investment Grade Audit Results AWWA Water Audit Reporting Year - 2016 Acre-feet Category per year Water Supplied 20,061 Water Consumption 16,793 Water Losses (water supplied – authorized consumption) 3,268 Apparent Losses 1,167 Real Losses (water losses – apparent losses) 2,101 Project Opportunities Category Acre-feet/year Gallons/year Customer Metering Inaccuracies (Apparent Losses) 949 309,000,000 Automated Leak Detection System (Real Losses) 630 205,000,000
6 Scope of Work Meter Upgrades Replace Replace Existing Meters Upgrade Meters & AMI Only to AMI Upgrade Meters Meter Type Totals Meters (Existing to AMI (to Only AMI Meters Remain) Meters) Small & Intermediate Water Meters 28,963 2 0 8,468 37,433 Large Water Meters 16 64 0 113 193 Natural Gas Meters 0 0 27,003 16,232 43,235 Totals 28,979 66 27,003 24,813 80,861
7 Project Cost & Savings Annual Annual Annual Total Meter Leak O&M Annual Accuracy Detection Cost Project Cost Benefits Savings Avoidance Benefits $22,124,000 $455,657 $105,270 $791,671 $1,352,598 Simple Payback - 16.4 Years
8 Project Benefits • Accelerate the completion of the AMI solution across the entire water and natural gas systems (less than 2 years) • Reduce apparent water losses (customer metering inaccuracies) • Reduce real water losses (LCU distribution systems) • Increase billable water and sewer revenues • Reduce operation and maintenance expenditures • Proactively maintain utility revenue streams • Increase levels of customer service • Reduce water leaks and breaks resulting in public health and safety improvements
9 Questions…?
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