Keeping Customers’ Water Running in America – a guest blog from Valor WaterMarch 22, 2019
By Christine E Boyle, PhD
CEO, Valor Water Analytics – A Xylem Company
This year’s World Water Day theme “Leaving no one behind” hits home right here in the United States. According to a recent study by Food and Water Watch, water shutoffs are growing problem for water customers, and the utilities that service them, across the U.S.[i] Their study found that:
- The average water utility shut off 5% of households for nonpayment in 2016.
- An estimated 15 million people in the United States experienced a water shutoff in 2016.
A recent paper by Michigan State University predicts that water may no longer be affordable to as many as 35.6% of American households within the next five years[ii]. The drivers behind the rising affordability crisis are complex and partially explained by increasing costs utilities face to provide clean water to citizens. According to the American Water Works Association, America’s drinking water systems will require more than $1 trillion over the next 25 years, with the greatest household burden expected in small systems in the southern and northeastern parts of the country[iii]. Consent decrees by the EPA ordering cities to clean up polluted water bodies, though necessary, are extremely expensive and fall on the shoulders of many of the nation’s lowest income cities, such as Cleveland, OH and Buffalo, NY.
A new approach to reduce water shutoffs and keep customers’ water running
In tracking water affordability over the past ten years, I reached a point of frustration over the shortage of new solutions to help utilities and their customers to keep the water running, and avoid the massive interruption to household life of a water cutoff. I founded Valor Water in 2013 to address such issues. Our mission is to provide advanced analytics solutions that enable water utilities to improve their financial condition. We leverage data to develop solutions that also strive to improve the water customer experience and promote water efficiency. As such, one of our core solutions is called Cutoff Analyzer, a software application water utilities use to assess payment risk of customers so they can reach out to customers in advance of them not paying their bill and provide assistance. For example, a payment plan, plumbing assistance, or a referral to a customer assistance program.
In fact, the underlying thesis for this technology is that not all nonpaying customers are the same. Some households forget to pay their bill; some don’t have money and can’t pay their bill; and some encounter a leak or bill shock for one month and need short term assistance. Using data segmentation methods, Valor’s Cutoff Analyzer ingests historic billing data and segments customers into categories to gauge their risk of nonpayment for that month, enabling the utility to reach out and help – and avoid having to shut off water service.
Figure 1. Why are Customers Cutoff? Copyright 2019, Valor Water Analytics.
In addition, the solution predicts the customers that are at highest risk for cutoff on a monthly basis. This allows utilities to reach out to high-risk customers, with the aim of reducing the number of overall cutoffs. Valor provides guidance around the messaging and mode of communication for each of these customer segments, based on our understanding of the motivations and impact for cutoff. In other words, we get the right message to the right customer at the right time so that can keep their water running.
In communities across the nation, Cutoff Analyzer has helped utilities decrease the amount of outstanding payments (arrears) by 50%, and decrease total number of cutoff customers by 50%, year on year. Valor works hand-in-hand with water on outreach strategies for each of these customer segments based on our understanding of the motivations and impact for cutoff.
There is no silver bullet to solve America’s water affordability struggles. However, new solutions and ideas are needed to deliver information and assistance to customers and put them back in control of their water bill. Valor Water and its parent company Xylem, are committed to working with communities and utilities to ensure clean and affordable water for citizens.
Valor Water and Xylem, Inc are members of the Cleveland Water Alliance.
[i] Food and Water Watch, 2017. America’s Secret Water Crisis: National Shutoff Survey Reveals Water Affordability Emergency Affecting Millions.”
[ii] Mack and Wrase, 2017. “A Burgeoning Crisis? Nationwide Assessment of the Geography of Water Affordability in United States,” appeared in the science journal PLOS One.
[iii] American Water Works Association, 2012. “Buried no longer: Confronting America’s infrastructure challenge.”