Between the Poles

ESRI UC: 3D and other themes of this year's conference

According to Jack Dangermond who led the plenary sessions on the first day,  this year in San Diego 12000 people from 130 countries were in San Diego for the 33rd Esri International User Conference.

I gravitated primarily to the utility sessions.  According to Bill Meehan, who is responsible for ESRI's utility business, there were 750 utility folks at this year's UC.

GIS is everywhere

GIS is being used in diveerse areas including environmental monitoring, climate change, permafrost melting, sea level rise, agriculture, water resources, aquaculture, pollution remediation, energy resources management, land information systems, urban design, utility network management, wasteshed modeling, utility pole inspection, sewer rehabilitation, port management, indoor GIS, iInsurance risk management, health-related mapping, law enforcement, mapping where space debris might fall, flood risk mapping, storm tracking and damage assessment,  geodesign, crowdsourcing for collecting a variety of data, interoperabilty, citizen engagement, government transparency, cartography, geology and mining, automatic generalization of different scale maps, story maps, portals for infrastructure, and open data, to mention just a few of the things that were singled out in the plenary session. 

Some of the areas that were singled out  for special recognition were

• Special Achievements in GIS award went to the Dartmouth Atlas for showing geographically how outcomes and the cost of medical procedures varies depending on location across the U.S. 
• The Hong Kong Lands Department received the Enterprise GIS award for their land management system which they started in the 1990's and is now in its second generation. 
• Tbe President's Award went to Direct Relief which distributes different types of equipment to people around the globe in need with 99% efficiency according to Forbes.

Themes

The theme of this UC was GIS transforming our world, not only changing the physical world as we know it, but also changing our perception of the world and how GIS has and will fundamentally help us collectively build a better future.  A classic example that has impacted everyone on the planet is GPS or more generally GNSS.   As a number of speakers including Dangermond said we are never lost any more and that is fundamental change to how we perceive the world.

Some of the major themes that emerged at this UC are common to many software and service providers in the IT sector, but some of these are new or unique to ESRI. 

Climate change

We are facing serious global challenges, in particular climate change, which both at the Geodesign Summit and at this UC conference appears to be a personal challenge for Dangermond who sees GIS as contributing in major way in creating a more sustainable future.  He sees GIS helping to change how we think and act and how we do basic things such as design. 

GIS across the organization

A theme that was pervasive throughout the conference including in the utility sessions was the need to make GIS pervasive across the organization because 90% of the data that organizations are collecting and managing has location.  This was also true in utility sessions I attended, where the thrust is to expand the use of GIS outside of the traditional area of records management into other departments.

Vertical industry "templates"

In the utility and telecommunications sectors there is a major effort underway to create preconfigured vertical "templates" for specific vertical industries.  In the utility sector one was announced yesterday for the electric power Industry, and others are underway for gas and telecommunications.  These templates are a collection of data and tools for vertical industries and are available as open source on Github.

Web

The web was pervasive, It was hard to find a session where the theme that desktop GIS is being transformed into web GIS did not come up.  It doesn't mean that the desktop is going to go away in the near future, but sharing data, applications, and apps is being recognized as a common goal and web GIS makes this very easy to do.  This includes web portals for accessing enterprise data over the web.

Cloud

A lot of the traditonal desktop GIS capabilities are now being made available in the cloud so that all you need is an iOS or Android device or a web browser.  This is also available to large enterprises who need to keep their data on their own servers for security reasons.  Cindy Salas from Centerpoint Energy demonstrated ESRI's cloud capability but running "on premise" completely wthin Centerpoint's fire wall. 

Integration

Being able to integrate location and the spatial dimension into enterprise applications such as ERP (SAP), business intelliegence (IBM Cognos), Salesforce, MS Dynamics, and Excel spreadsheets is a new focus for ESRI.   They have already created plugins for several well-known applications.

Mobile devices

In the past when you talked about mobile in the context of utilities, you were normally dealing with Panasonic Toughbooks which could cost up to $6 000 each.  At this conference just about every application was able to run on a variety of low cost mobile devices including iOS and Android mobile devices.  One of the sessions I attended was about the National Broadband rollout in Australia where the 500 field folks who are doing 300 000 pit inspections were all equipped with iPads, which you might have thought were too fragile for pretty rough field work..  This project has been underway for something like 18 months and todate only two of the iPads have been damaged.

Big data

Spatial data volumes whether from sensors at utilities, from LIDAR scanning of transmission lines, or from earth obsevration satellited are now reckoned in terabytes.  There were sessions on spatially enabling Hadoop, SAP HANA and other big data management systems for managing these data volumes.

Real-time

In the utility track managing real-tme data from sensors on transformers, smart meters, phasors, and other devices and enabling near real-time decision making was a common theme.  A general event processing capability that can be triggered by rules has been added to the quiver to make this possible for any data stream. 

In the area of imagery, Digital Globe imagery can be accessed with 4-5 hours of acquisition.

Analytics

Big data and real-time means that we need to be able to understand what these huge volumes of data are telling us and then enable decision-making, automated or human mediated, as rapidly as possible.  If a transformer is running hot, we can't wait a week until the next service check to reconfigure the network because by then we may have reduced it projected lifetime by 10%.  There were "location analytics" sessions in most of the vertical industry sessions including utilities.

Content

Software companies like ESRI and Hexagon are now in the content busines.  And with the data beng made available in the cloud, you can access it through web GIS or desktop GIS. The data includes traditional topographic maps, digital terrain models, imagery from earth observation satellites from Digital Globe and others some of it near real-time (fr example, from Digital Globe within 4-5 hours of acqusition), demographics, and others.

Dangermond's term for this is the "living atlas" because this body of content is intended to be dynamic, real-rime and comprehensive.  The goal seems to be all the data you would need to manage the planet.

Some of the content explicitly mentioned includes

• basemaps
• community. content
• imagery
• 30 cm coverage of the US
• 60 cm coverage of Western Europe
• imagery for the middle east and asia in total covering 2/3 of the world
• health
• lifestyle
• economics
• demographics, at the zip code, county, state, and national levels
• scientific maps including environmental, energy, infrastructure, and terrain models
• landscape layers

This data is accessible to web and desktop applications and makes it very easy to do standard spatial analytical things like multi-criteria suitability or site selection mapping.  Users can also publish their own data to the cloud.

Education

This has always been a strong focus area for ESRI and from Dangermond's perspective with the challenges the world is facing, GIS professionals will be even more critical in the future.  There is focus on advancing spatial literacy to a broader audience than in the past.

LiDAR

Laser scanning is a major source of important data for the construction industry (right of way determination and construction progress monitoring), utilities (transmission vegetation management), and other industries.  ESRI has made this a focus area and there were a number of sessions devoted to managing and analyzing point cloud data.

3D

Dangermond specifically singled out 3D as a major capability area for ESRI.  There are specialized 3D products, but 3D is also being built into ESRI main stream GIS and spatial analytical products.

3D city models

At the plenary there was a demonstration of how to quickly build a 3D city model from 2D data, including extruding buildings from a 3D building footprint and height, adding textures depending on building types, and then tools for analysis such as zoning and shadow analysis and visualization including flythroughs.  These models are sharable on the cloud as web scenes requiring only a web browser (with no plugins) or iOS mobile devices.

Geodesign

At the UC ESRI is demonstrating a prototype of a product designed specifically for geodesign.

Open data

Dangermond specifically mentioned the newest national open data initiative in Peru. 

Crowdsourcing/volunteered data

There are sessions specifically on editing and manipulating OpenStreetMap data.

Platform for urban planning for infrastructure and other municipal services

At the INSPIRE conference in Florence, Ewa Klien, Joachim Rix and Didier Vancutsen gave an overview of an interesting EU project called Plan4business.   Plan4business is designed to address the challenges faced by urban and regional planners today.   Datasets are not easy to use for business issues such as comparative analysis, monitoring and analysing urban statistics, or developing urban inquiries and projects.  Private and public sector researchers, planners and professionals from the real estate world, insurance, energy, agriculture, and others as well as investors realize that they need to develop the ability to used spatial datasets from many sources to perform complex analysis and then visualize the results for non-technical decision makers.  The Plan4business project is aiming at developing a web-based platform which will offer urban and regional planning data users a full range of compatible planning data and services such as transport and energy infrastructure, regional, environmental, and zoning planning.  The Plan4business project started in April 2012 and will continue through March 2014.

The Plan4business platform is intended to be competitive from a business perspective.  It is intended that the platform will provide content as well as analysis and visualisation services via both an Application Programming Interface (API) for application developersand an interactive web frontend for end users. Functions offered will have to range from simple statistical analysis to complex trend detection and to 2D/3D representations. The Plan4business platform is intended to provide opportunities for planners, private consultants, public and private data providers, and researchers.

To provide some idea of the type of planning projects that are envisaged as using this platform., a number of operational use cases have been defined for both the private and the public sectors.

Private Sector

• Spatial Planners, Planning engineers
• Banks and Insurances Services
• Energy and environmental services
• Health Services
• Commercial Services
• Real Estate
• Telecommunication Services
• Tourism and Travel Services
• Transport and Logistics Services
• Security Services

Public sector

• Spatial Planning Authorities
• Fiscal Authorities
• Regional Development Agencies
• Other Public Services
• Public researchers / Universities

Energy and environmental services

For example, the Energy and environmental services use case involves an environmental agency that needs to design and propose a number of policies for managing and moderating noise levels in urban realm, both residential settlements and productive/industrial areas. Policy designers have to assess criterion, together with competent local authorities, to limit/contain noise level to which humans are exposed, particularly in built-up areas, in public parks or other quiet areas in an agglomeration, in quiet areas in open country, near schools, hospitals and other noise-sensitive buildings areas.

Automated One-Call system in the Netherlands for excavation damage prevention

I have blogged numerous times about the challenge of accurately geolocating underground utilties. Most recently I blogged about the estimated ROI for investment in improving the geolocation and other information about underground utilities and the remarkable project of the City of Las Vegas to create a 3D model of its underground utilities.

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One-Call in the Netherlands (KLIC)

 Yesterday at the INSPIRE conference in Florence, Ad van Houtum of the Dutch Kadaster described how the Netherlands is addressing this challenge.  The Netherlands has had what in North America is called a One-Call or Call-Before-You-Dig system since 1967. The objective of the system is to prevent damages to the utility network and to ensure the safety of excavators during excavations. 

From 1967 to 2010 The Netherlands had a manual One Call System (KLIC) that worked similarly to North American One-Call systems. Anyone planning an excavation would call the One-Call telephone number and communicate the location, duration, and other information about the planned excavation. The One-Call center would contact the relevant utilities (network operators) who would then send maps of their network infrastructure to the excavator. (In North America the utilities would more typically send vans and staff with equipment to try to locate underground facilities.) The Dutch service was free of charge for excavators and funded by the network operators. It generally took about three working days to provide the required information to the excavator.

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KLIC-Online

 In 2010 the Netherlands switched to a digital information system (KLIC-Online) that worked in a similar way except that everything could be done online.  With KLIC the turnaround time was reduced to hours. Both the manual and KLIC-Online One-Call systems were voluntary until 2008 when a law was passed which made KLIC mandatory for both network operators and excavators with severe penalties for excavators who circumvented the system. There is also a charge of € 29.50 for every excavation request.

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KLIC 2020

 The Netherlands is now planning the next version called KLIC 2020.  The business drivers for the next version is to further reduce the number of incidents of excavation damage, improve the efficiency of both network operators and excavators, and to make the information available to other domains such as planning and zoning and public security.

The industry wants the system to be available 24x7, near real-time, and should include other information in addition to network infrastructure such as soil types, ground water, parcel file, and so on. It also should have a secure authentication and authorization service. It is planned that the view service will be based on the OGC WMS standard, and the download service on WFS.

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INSPIRE and KLIC 2020

 Annex III Theme 6a Utility Services (INSPIRE US) is the relevant INSPIRE standard. All government agencies are required to adhere to this standard. This includes 80 % of the network operators in the Netherlands.

In this context the KLIC 2020 system will be INSPIRE US compliant, with 24x7 availability, 99% up time, supporting more than 20 simultaneous users with a better than 5 second response time for viewing and better than 20 seconds to begin downloads.

Using GPUs for compute-intensive geospatial applications

The Titan supercomputer at Oak Ridge National Laboratory in Tennessee was names the fastest computer on Earth in November 2012, according to the Top500 list.  Most of Titan’s computing capacity comes from its NVIDIA Tesla K20X GPU accelerators. Based on the same architecture used in NVIDIA’s workstation and PC gaming chips, the GPU accelerators perform computations far more power efficiently than any machine equipped with CPUs alone.

Mapping tweets in real-time

I blogged recently about TweetMap which is an instance of MapD, a massively parallel database platform being developed through a collaboration between Todd Mostak, (a researcher at MIT), and the Harvard Center for Geographic Analysis (CGA).  The database can be queried by time, space, and keyword.  The ultimate objective is to be able to query billions of tweets live in real-time.  In this case real-time means from tweet to tweet on a map in under a second.  MapD is a general purpose SQL database that can be used to provide real-time visualization and analysis of very large data sets.  MapD uses commodity Graphic Processing Units (GPUs) to parallelize compute intensive tasks such as querying and rendering very large data sets on-the-fly.  MapD runs on inexpensive hardware  with four GPUs ( ~$1000).

Flood modelling

At the HxGN conference in Las Vegas last week, I came upon Myriax Software Pty Ltd, which is a private startup and  which has developed EonFusion Flood, which is a hydrodynamic modeling package based on a 4D GIS which can run both 2D grid and 3D particle-based hydrodynamic simulations.  This is very compute-intensive stuff and I expected that this was running in the clud on some parallel processing machine.  It turns out it was running on a single GPU on a laptop.  Fllod can be used for river and floodplain modeling, dam break scenarios, designing spillways for dams, and urban flood risk assessment.

Mobile geospatial solution improves data quality at water utility

At the HxGN conference in Las Vegas Chris Bodely of Anglian Water which provides water and wastewater services to 6.3 million customers in the southeast of England gave an overview of GIS at the water utilty and in particular their implementation of a mobile GIS. This is relevant for any utility that is still sending paper maps and work orders to the field.

Background

In 1992 Anglian began digitizing their paper maps and drawings.  In 1995 they implemented an AM/FM/GIS solution using Intergraph FRAMME.  Then in 2003/2004 they developed a new GIS strategy, a key element of which was a mobile GIS solution.  At that time field work orders were paper and the process to develop them was manual.  Because it was a  manual, paper-based process, it was difficult to process feedback from the field staff when something was changed or when errors in the records were documented by field staff.  The result was that forms returned from the field were often incomplete and unreliable.  This is a problem that most utilities relying on a paper-based process are experiencing.

Mobile GIS

In 2006 Anglian provided Panasonic Toughbooks to their field staff with a desktop mapping application and facilities data.  The application enables field staff to see as-built maps and other information for Anglian's water and wastewater networks.  In 2012 the application was replaced with an integrated application that includes accces to SAP. 

A key feature of the mobile GIS is that it also enables field staff to record errors and changes as redline directly on the digital map in the field as part of a two step automated process.  The redline is which is then forwarded electroniaclly to Anglian's Central Mapping group.  After reviewing the proposed changes Central Mapping update the faciltiies database with the new information.  Providing direct access to the database has empowered the field staff, who are now taking greater responsibility for the reliability of the data in the facilities database. 

Benefits

Anglian found that the mobile GIS resulted in producitivity improvments across most process areas of 2-5%.  But the biggest benefit was in the area of data quality.   Form completion and quality improved from the low 60s% to the high 90s% over a period of 6 months. This resulted in improved regulatory and statutory data capture, for example, to comply with the Traffic Management Act (TMA), and directly impacts the bottom line, because it means fewer fines for non-compliance with the TMA.  Another major benefit was that empowerment resulted in a happier field workforce

The remaining major challenge is to provide the updated facilities information to field staff automatically.  Currently it is a manual process requring ditribution of the updated facilities database via DVD.

Infrastructure excellence competition

Infrastructure-excellence.com is hosting the second annual competition showcasing Excellence in Infrastructure— highlighting the best projects done in 2012/2013. The winners will be given over US$10,000 in prizes by the competition sponsors.  The competition is open to anyone 21 years and older who is planning, designing, building, and managing infrastructure projects.  Project types may include the following:

• Transportation (roads and highways, rail, airports, or bridges)
• Land development (commercial sites, subdivisions, public parks, or recreation)
• Water (distribution, water resources, dams and levees, or wastewater)
• Energy (electric and gas distribution, electric transmission, and substation design)
• Urban planning

Can alternative business models for water distribution help resolve the water crisis ?

There are several business models for water distribution including investor owned, coops, regional associations, private-public partnerships and municipal.  In the UK there are a small number of regulated regional investor owned water utilities like Thames Water, Northwest Water and Southern Water each of which serves millions of customers.  But in many parts of the world water and waste water are a municipal responsibility.  In France water and waste water are the responsibility of municipalities, but 75% of water and 50% of waste water services are contacted out to private sector companies like Veolia and Suez.  In the Unites States there are about 54,000 community public water systems, which are either publicly owned, cooperatives or privately owned.  But about 50,000 of these systems provide water in localities with less than 10,000 inhabitants.

Water and waste water funding gap

Only a portion of water infrastructure maintenance and operations costs are covered by rates in the United States, the rest comes from grants from several levels of government.  Both the American Society of Civil Engineers (ASCE) has estimated that the water infrastructure funding gap is on the order of $20 billion per year.   As a result most municipalities across North America under-invested in water infrastructure for years and many are now faced with the reality of aging infrastructure with increasing leakage and breakage, competition for more limited (quality and quantity) sources of water, and the increasingly costly impact of regulation from state and Federal regulators.  Assuming every pipe would need to be replaced, the cost over the coming decades could reach more than $1 trillion, according to the American Water Works Association (AWWA).  Capital investment needs for U.S. waste water and storm water systems are estimated to total $298 billion over the next 20 years according to the ASCE.

Municipal water systems are typically departments of the city government and are controlled by the mayor and the city council.  And like public water companies around the world, it has been very difficult to persuade elected officials to raise water rates to cover the funding gap.  From Margaret Catley-Carlson's perspective, the crossover between elected officials and water and water pricing is one of the universals around the world.  She told a story of how even in the great drought of Spain two summers ago Spain was still charging less for water than any of the other European countries.  She talked to people in Spain and they understood that paying more for water was part of the solution, but it was not possible to get elected officials to make the decision to increase water rates.

Utilities that have surmounted the funding gap

At the Canadian Water Network conference we heard about two examples of municipally water companies, both of which are unique  in their own ways, but both have been able to get the needed funding to fill the gap in infrastructure spending.  These companies which may be pointing the way to the future of water delivery. 

The first,  EPCOR Utilities based in Edmonton, Alberta, is run like a private corporation, but is wholly owned by a municipality for which it is a source of revenue, estimated at about $1.5 billion since it was formed.

The second, Greater Victoria Water Services, is structured like a municipal public water company, but because it is a regional water utility it has a board that has an arms length relationship to its constituency.

One important thing that both of them have in common is that they were both able to successfully structure solutions to problems facing their water utility as a result of a major crisis, a financial crisis in the case of EPCOR and a major water main break in the case of Greater Victoria Water Services.

EPCOR Utilities

Don Lowry, past President and CEO of EPCOR Utilities, is a strong believer that the only way to have a functioning water distribution system is that everyone must pay for water.  In his view water is not an entitlement,   it's a hard earned right.  You have to be diligent and work 24x7 on continuously earning that right to have access to water and a sustained, continuous supply of water. 

EPCOR was formed in a crisis.  The city was faced with a significant financial crises during the Canada's National Energy Program.  Facing massive layoffs and job losses, the water system had no choice.  It had to carry its own weight, recover its own costs and start to be a growth engine for the city as opposed to a burden for the city.  As a result EPCOR Utilities is 100% owned by the City of Edmonton, but it is operated completely as aa commercial enterprise.  EPCOR has become the water and waste water provider for a large footprint  of water and waste water utilities in Western Canada. They are also the largest private water supplier in the states of Arizona and New Mexico in the U.S. 

The way that EPCOR is setup is that it is 100% owned by the City but has an independent board of directors under a universal shareholders' agreement that puts it on a standalone basis.   It must finance its operation completely from earnings of the business or what it raises on the capital markets.  It has a BBB+ credit rating.  EPCOR pays its shareholder a dividend.  Since 1998 the dividend was $67 million annually, today it is $144 million.  The company has returned back to the shareholder over $1.5 billion in cash, taxes, fees and dividends and this is growing.  EPCOR pays tax in every jurisdiction in which it does business and it competes in the capital markets.  Most importantly EPCOR fully costs its water, there are no subsidies.  They are able to compete and EPCOR's water utilities are thriving and growing..

The three key challenges EPCOR sees facing water today is the scarcity of it, the deterioration of the infrastructure and and most importantly the fragmented approach that we in North America take to its operation, regulation and financing.
 
Scarcity

The increasing scarcity of water is an absolute growing concern.  In southern Alberta it has been fully allocated.   There can be no further development unless there is trading of water rights or the diversion of water from one use to another.  EPCOR is working to make better utilization of the water that they use.  For example, they are capturing the water that we would have previously diverted back into the river after processing it through their waste water treatment plant and are piping 15 million liters per day to a Suncor refienry ro make petrochemical products.  But in the long run the scarcity of water is going to lead to longer pipes, bigger pumps, more chemicals,  more competition for water, higher costs and Don believes that the current service delivery model is not going to make it.

Aging infrastructure

North American infrastructure is getting older.  Most of the infrastructure that was put in Canada and most in the US was put in major chunks.  A lot of it in the 60s and 70s and it is old and deteriorated and needs to be replaced.   On top of that you need to layer the growth requirements and the replacement requirements.  In Canada alone it is estimated to amount to about $80 billion for replacement and to plan for the growth of infrastructure, pumps, pipes, valves, plants, and meters necessary to deliver that essential service.  In the US it's estimated to be over a trillion dollars.  In Edmonton EPCOR has a major program underway to replace the cast iron pipe that was put in shortly after the Second World War, that  has deteriorated dreadfully, causing leaks and water main breaks.  As a result they are starting to see results, fewer leaks and less breakage.  This is an example of a program EPCOR expects that that other municipalities are gong to have start to aggressively implement to replace ageing infrastructure.  \

Fragmentation

North America is backward in terms of how we approach the treatment, the delivery, and the recycling of water across Canada and US in terms of the shear number of companies.  There are over 54 000 water companies in the US, ranging from the local water company in a town of 10 people up to millions of people in New York,  However, 8% of those companies serve 81 % of the entire population.  The other 92% serve 19% of the population.  The story is not much different in Alberta.  Of the over 530 water companies in Alberta, the top 10 water utilities serve 76 % of the population, the other 520 or so  serve 24% of the population.  Don's point is that with such a fragmented structure we can't get the economies of scale that we see in other industries in our society, such as airlines, telephony, wireless, natural gas, and electricity.  The present fragmented state of the industry it brings its own stream of inefficiencies and concerns such as how do you adequately train people in very small water utilities and how do you fund all these water utilities.  Even more critically how do you ensure that what happened in Walkerton and North Battleford (well publicized outbreaks of water borne disease outbreaks in small communities) don't get repeated.

According to Don, the Government of Alberta has taken a first step in this direction and has embarked on a conversation with the regions within the province to look at the watersheds and consider the creation of utilities similar to EPCOR that could achieve an economy of scale for all of the water needs for each region.  This could be a first step toward shrinking the over 530 existing water companies down to perhaps 10 or 12 to begin to achieve some efficiencies of scale.

Water Services, Capital Region District, Greater Victoria, British Columbia

Jack Hull, General Manager of Water Services of the Capital Region District in Victoria, British Columbia, gave an overview of some of the successes Greater Victoria Water Services have had in implementing some of the measures that have been implemented by EPCOR. 

First of all he said categorically that there is no infrastructure deficit in the Greater Victoria water supply system.  It was eliminated over a 15 year period.  Like a lot of municipalities the Greater Victoria Water started off in the early 90s with underinvestment.  “If it breaks, we'll fix it,  but we won't be proactive.”  Greater Victoria Water put a strategic plan in place to address water supply, water quality, and infrastructure and pricing issues.  They moved to a utility model for pricing, which is based on the asset base.   Over the next 15 years with over $200 million in investment Greater Victoria Water eliminated its infrastructure deficit and addressed its water quality and quantity issues. 

All the decision making was ultimately done by a group of politicians who recognized that if they didn't invest,  there was going to be a major negative impact on the quality of life within the capital region.

Greater Victoria Water also runs the distribution systems that serves about 60 000 people in five neighbouring  municipalities.  Similarly to EPCOR's cast iron pipes problem in Edmonton, it was necessary to replace asbestos cement pipes.  Greater Victoria Water recommended a 10 year program to address this issue, but the politicians came back and said no we want to do it in five years and they put the money behind it to do it in five years.

Greater Victoria Water has been able to successfully promote water conservation.  A utility model obviously is able to generate revenue.  According to Jack every cent of that revenue goes back into improving the infrastructure and eliminating the deficit.  During the same period, particularly in the last 10 years, Greater Victoria experienced 14 % growth in population, but water demand dropped by 8% during that same period.  In 2001 Greater Victoria Water had a ban on outdoor water use for 9 months of the year.  Last year normal water use was down to that level without anything extraordinary in terms of water restrictions.  

From Jack's perspective, given the right group of politicians and the right group of managers you can achieve much of what EPCOR has done without going to the fully corporatized model.

Jack said that he fully supports what EPCOR has done with small systems because that is where the real issue is.  Small systems do not have the resources to deal with some of these issues and that is where an organization like EPCOR can  provide significant assistance, which a regional government  can't do because of the legislation that controls regional government.
 
With respect to governance the Greater Victoria Water board is one step away from the electorate because they are members of local councils who are appointed to the regional board.  They are elected officials at the local level, but appointed to the regional board and appointed to the water commission so they are one step away from being directly elected to the board.

The other thing that contributed to this achievement was a crisis.  On New Year's Eve in 1992 Victoria had a major water main break.  A 36" water main burst and caused a lot of damage.  So when Greater Victoria Water reviewed its budget that year they had lots of photos of all the damage caused by the water main break.  The fact that it took 18 hours to shut the water off because the valves hadn't been serviced probably since 1915 when they were installed.  There were photos of air release valves that couldn't be recognized as valves, because they were just  clumps of rust.  As a result when at the budget review Water Services asked for some money to do a study on infrastructure, Jack related that this was one of two times in the last 20 years when politicians asked him if he was sure he had enough money in his budget, didn't he need some more ?

Conclusions

The most important conclusion I take from this is that water needs to be fully costed from the water source to treatment and reinjection if we are going to have sustainable water systems that work.  The second is that there are several ways to skin the cat but setting up a governance structure that allows the water utility to be run an arm's length from the elected politicians seems to be key. Thirdly, small water systems are facing a crisis, because it is going to be increasingly difficult and expensive for them to access the resources they need and it may be regional companies based on the EPCOR model that can resolve this problem.  And the moral of the story is don't waste a good crisis.

Does water as a basic human right mean free water ?

Recognizes the right to safe and clean drinking water and sanitation as a human right that is essential for the full enjoyment of life and all human rights
and
Calls upon States and international organizations to provide financial resources, capacity-building and technology transfer, through internationalassistance and cooperation, in particular to developing countries, in order to scale up efforts to provide safe, clean, accessible and affordable drinking water and sanitation for all.

At the Canadian Water Network conference one topic that came up repeatedly related to pricing water equitably and how to do it in a way that benefits the 780 million people without access to clean and safe water and the 2.5 billion who don't have access to basic sanitation (UN GLAAS 2012 Report).

In response to a question from the audience, Margaret Catley-Carlson rephrased the question like this. 

• First,  is there a consistency between the UN declaration on water as a basic human right with the kind of charging for water that a number of speakers are recommending?
• Secondly, what is the corporate responsibility to the water challenged or to people where there is a resource insufficiency ?

Margaret Catley-Carlson's response is very interesting, especially bearing in mind that her background is government and NGOs, not the private sector.  By way of background she has been active at the board level in the international water sector for over 15 years.

She was very direct, saying that "it has been the cruelest of constructs to equate a human right with free water, because of all those that cannot afford free water the poor are the ones that can least afford it."  She went on to explain why.  In city after city, village after village, systems where water is free or undercharged, particularly those that are run publicly, respond to those that have the most resources.  When there isn't enough to go around, these systems favour more powerful people. You can wish that it weren't so.  Mark Twain said water flows uphill, meaning it moves towards power.  The last person in the irrigation line, the slum dweller, those that depend on water vendors, these are the people who have a theoretical right to water but because the systems don't work or break down they are the ones that are in fact under-served or not served at all.   They are the ones we include in the billion people around the world that don't have access to clean and safe water.  

She emphasized that these people [do better] when they live in areas that charge for water, but where there is a subsidy to them personally, not to the water company, for water usage.  This is a very important distinction.  Many cities and countries have a subsidy for the poorest people within the jurisdiction.   This is done in a number of ways.  In South Africa everybody gets a small amount of free water and then the next tranche of water delivery costs more, the next costs even more and at the swimming pool level both the rate and the volume are very high.   In New York it is done by postal code numbers.   In the UK and France it is done in a different way.  In Chile the poor pay their water bill, but if they are receiving social assistance at the end of the year they get a heavy percentage of that water bill returned to them.   They pay, but they get it back.   Margaret applauds those jurisdictions that do have a subsidy for those that can least afford to pay their water bill.  But she fully agrees with everybody being charged for water because that is the only way that you can make the water systems work.  

She also pointed out that there is a right to food, but we all pay for food . Some say there is a right to education, and we certainly pay for education in one way or another through taxes or through direct school fees.  From Margaret's perspective it has been "a cruel juxtaposition of issues to say that if it's a right, it has to be free.  Because the ones that it has penalized are exactly the one billion people that don't  have access to clean and reliable water.  It's when you have a system that functions that the poor have access to clean water."

She added that in many of the countries where these people live there is no tax base and so therefore you cannot rely on the tax base to pay for water for  the poor.  The numbers that are involved are so much larger than any development assistance numbers that it is implausible to have development assistance pay for water for the poor.   In short there are either taxes, tariffs or transfers.  Those are the only things that have ever paid for water anywhere.  You can charge people as taxpayers, but you have to transfer the money from general tax revenues.  Then you'll get distortions in favour of certain neighbourhoods and away from others.  

She sees tariffs as the best alternatve. "Over time the tariff is actually a poverty alleviation mechanism, and as a fulfilment of rights it does the superior job.  So it's a question I like to receive because it think it is a cruel linkage to perpetuate [equating human right and free].  If you really care about poor people,  then you will have a system that charges them slightly for water. "

Her experience supports this.  "By the way poor people agree with me.   When you go out to villages and you ask, if you had reliable water systems would you be willing to pay for it ?  They say yes, absolutely, because they already pay now.   They are paying vendors now and are often paying much more then they would be paying if they had a proper functioning water system."

Don Lowry's view, Don is past President and CEO of EPCOR Utilities, is that water is not an entitlement. It's a hard earned right and you have to be diligent and work 24x7 on continuously earning that right to have access to water and the sustainable, continuous supply of water. If you look at cost and usage of water in the OECD, you see the symmetrical difference.   The highest price for water is in Germany and the cheapest price for water is in Canada. The highest consumption per capita is in Canada, and the absolute lowest consumption per capita is in Germany.   Don's view is that you can't give it away for free, because we don't have it for free in the first place.. And it's proven by the leading countries that by pricing it appropriately it spurs innovation and conservation. 

But for people who can't afford to pay much for water, Don said that EPCOR has what is called a lifeline level, a minimal level that ensures that you have enough water within your home or family for basic needs at an affordable price.  But as you use more water, for example, if you have a swimming pool or if you want to have a jungle in your front yard and it's a desert, you're going to pay a lot for that.   "We are going to reward customers that conserve,  industries that find ways like PepsiCo and Suncor to make maximum use of every drop of water they've got."

Water myths: unlimited water and who makes the decisions

In her introduction to the session she was chairing at the Canadian Water Network conference Margaret Catley-Carlson, who has been involved with water internationally for about 15 years, focused on some of the myths about water that need to be dispelled if we are going to come to grips with the water challenges facing the world community.

"The water industry" and water users

From Margaret's perspective it is important to realize that there is a very real disconnect between the powers that within societies are thought to have the power or responsibility for shaping the way that water is managed and the very real way that water is managed in many societies around the world.

She pointsout that the entities that talk, declaim, analyze, and write books about water and the environment really are in many ways not the managers of water.   Real water management decisions are made by millions of farmers every day in countries all around the world.   Some of them are big farmers and some are very small farmers.   Water management decisions are also made by hundreds of utilities, by energy producers and operators, by industries that use water such as mining, and by people who manage value chains.  What is presented in textbooks and in speeches is not the reality of water management.   The important water management decisions, the ones that have significant impact on water quality and quantity,  are made by the sectors of the economy that use water.   And far too often water users are not not involved in discussions about water.  Margaret recollected that she has been working in the water sector for close to 15 years and has been to more conferences and meetings than she cares to remember and at too many of these people who are in the water sector talk about how people who are outside of the water sector should be behaving rather than actually listening to water users.  From Margaret's perspective, the water users are the people we have to listen to and understand if we want to know how the future of water is going to be written.

The water nexus

Margaret's persective is that the management of water suffers completely by being caught up in the rhetoric of the past century, that water is plentiful and unlimited.  This is especially prevalent in Canada with the result that it is very difficult to undertake any meaningful dialog, let alone change, because of the myth that there is an unlimited amount of water in Canada.  As an example, water has been fully allocated in southern Alberta.  Increasing energy production there will require either diverting water from agriculture, meaning less beef much of which is exported, or by diverting water from north-flowing rivers as has been done with significant environmental impacts in Russia.

She also points out that limited water resources mean that we can no longer look at drinking water, irrigation, and using water for cooling at electric power plants as completely independent of one another.  About 5 years ago a number of people began to realize that talking about water and agriculture or water and energy provided a limited view because the outlook for the next hundred years is going to be written by something more complicated.   The nexus is often represented by a triangle with water in one corner, energy in another corner and agriculture in the third.  Municipalities and utilities would be included in the water corner.   Just looking at the bilateral  flow of water between these sectors is not as useful as considering the complex interplay between all three.  For example, if you start to use a lot more water in the energy sector or the energy sector starts to return water to the system in a condition by which it cannot be used by agriculture or other industries,  the whole system is affected. It is no longer the case as it was when we were three billion people and the impact of the activities of one sector on water could be analyzed by itself.  Now we've got to look at the impact in the context of the water nexus.  For example, what happens in Mongolia when a major coal industry goes into an area which depends on agriculture but is already water-stressed ?  This was in reference to images shown at the conference by Carl Ganter of Circle of Blue of a Mongolian farmer standing in a field desiccated by the lowering of the water table by a new coal mine.

Margaret believes that we live in the water nexus which is where competing demands for water are what is going to write the book about the future of water. The good thing about this is that there are possible synergies. For example, cleaned city water can have important agricultural applications. Water and energy can link together in some very important synergies.  For example, in Western Australia solar power generation is being linked to desalination.

But she also feels that there are also some troubling linkages.  Some countries decided to reduce their dependence on Middle Eastern oil and to switch to bio-fuels, even making them statutory.  Some countries mandated that in the future all transport had to use X % of bio-fuels.  The nexus impact of that was to move water away from the food function and crops such as corn or oil palm toward the energy function, with the result that the prices of those commodities went sky high resulting in food riots in some countries. 

What this means is that we can no longer talk about a single sector and how it uses water.  We have to diiscuss water usage in the context of competing uses in the water nexus.

Water conservation in industry: Why does using less water often cost more ?

At the Canadian Water Network conference we heard a fascinating presentation by Helmi Ansari, Director, Sustainability and Organizational Capability, PepsiCo Foods on how PepsiCo has reduced its water (and energy and waste) footprint and some of the business challenges specific to the water industry they have encountered.

PepsiCo is known internationally for its water conservation efforts.  Last year it won the Stockholm Industry Water Award for its 20 percent improvement in global water efficiency since 2006.

PepsiCo Foods Canada has 8 plants and 16 distribution centres in Canada and about 7000 employees.  PepsiCo's sustainability mantra is "leave no trace".  The long term vision is to run its business so as to leave no trace on the planet.  The vision is very aspirational, but I was quite surprised by how much real progress has been made. 

It started started in the early 90's when Pepsico created "green teams" in their plants.  The teams were responsible for environmental compliance. Then in the late 90s resource conservation teams were added.  Their goals were to reduce use of natural gas, electricity and water by 30 %, 25 % and 50 %, respectively, for every unit of food that they made.  Then in 2008 an initiative aiming at "net zero" plants  was started.  

Their interim commitments are aggressive

• Improve water efficiency by 75 %,
• Reduce manufacturing fuel usage by half
• Reduce fleet fuel usage by half
• No manufacturing plant and distribution centre waste going to landfills
• Lead in sustainable packaging innovation

The latest data shows that water efficiency has improved by  46 %.   Over 99% of the waste generated in PepsiCo Foods plants and distribution centres does not go to landfills.  According to Helmi this is the highest in the world for this type of industry and PepsiCo Canada was the first Pepsico subsidiary to achieve this objective. Fuel usage is down by a quarter, and fleet fuel usage is down by a quarter as well.  They have implemented heat recovery in every one of their plants.  According to Helmi they have the largest all-electric fleet in the world, and have just  completed the one millionth mile driven in all electric vehicles.

Reusing waste heat

Helmi gave an an example of energy saving through repurposing waste heat.  PepsiCo makes SunChips at their plant in Cambridge, Ontario.  They had a large boiler burning natural gas to produce steam to cook the chips.  After about a three year research and engineering effort, they were able to turn the boiler off because they are now cooking potatoes using waste heat from another process. SunChips for all of Canada are now being  cooked using waste heat that used to go up the stack into the atmosphere.

Net zero plant

Another impressive example is an entire plant that can run virtually off the water and electricity grid.  The Frito-Lay plant in Casa Grande, Arizona produces over a 100 million pounds of food a year.  In 2010 the plant received LEED Gold certification, apparently the first for a renovated food production plant.  Last year the whole plant was declared "near net zero" meaning it runs 90-100% off the grid,  90-100% of the water is recycled and over 99 % of its waste does not go to a landfill.  It has 36 acres of solar cells in an adjacent field; its own membrane bio-reactor  waste water treatment plant, with the treated water being reused in the plant, and a large boiler that burns landscape waste from a 75-mile radius, providing all of the plant's steam.  According to Helmi it is the only large scale food plant with this level of  sustainability.

Net zero using "potato water"

To make 4000 or 5000 pounds of potato chips per hour used to require about 120 gallons of water per minute.    A few years ago recycling technology was introduced which reduced water consumption to 60 gallons per minute.   After investing in more technology this was further reduced to  25 gallons per minute.  They are now looking at running the plant with "potato water", using the water in potatoes (potatoes are 80% water) much of which now goes up the stack as steam during the cooking process.  They calculate that if they can run their large chip plants entirely on potato water that would save a billion liters of water per year.

From a water conservation perspective, these are impressive achievements.  And you might expect that there were financial benefits that contributed to motivating PepsiCo to improve water efficiency, but surprisingly this is often not the case.

Business benefits ?

A major business benefit of a plant that can run on little or no water, is that it can be located in arid parts of the world, like Phoenix, Arizona, which is near where the Casa Grande plant is located.  Most of us would expect that another important business benefit of using less water is that it woud reduce costs.  The reality is quite different because of the way the water industry works.

At one of their plants in a small town where PepsiCo was the only major industry they were able to reduce water consumption by 40%, but they found that next year their water bill went up 40 %.  When they talked to the water utility, they were told that the utility worked on a fixed cost basis, and since the Pepsico plant was the only major industrial water consumer, rates had to be increased otherwise the water utility wouldn't be able to meet its obligations to its suppliers.

There is another problem.  When a plant uses a lot of water the effluent is very dilute, but as less water is used the effluent becomes more concentrated.   For example, reducing water consumption from 120 gallons/minute to 25 gallons/minute means the plant's effluent becomes roughly five times more concentrated.  At one of their plants that managed to reduce water usage by 55-60%, they are now having to pay much more for waste water treatment and their total water-related costs have actually increased.

Pepsico is at a point where as they continue to be more water efficient in North America, they're not seeing a financial benefit.   Their most water efficient plants are in Europe, North, Africa, and Australia where the pricing structure is very different and they are rewarded for conservng water. 

Unsustainable water service delivery model

Don Lowry, past President and CEO of EPCOR Utilities, gave his perspective on what is a pervasive North American water problem, a water service delivery model that is not sustainable.  North American industries that use water are caught in yesterday's paradigm of regulation which does not recognize the total cost of water, from acquisition through to treatment and re-injection.  Because water is managed on a fragmented basis, top water efficiency performers like PepsiCo are being penalized.   PepsiCo is being charged at the top rate because the pricing structure was designed with a view to punish people who have high concentrations.  According to Don breweries are in a similar situation.  As they have become more efficient, their effluent has become more concentrated and as a result their water-related costs have gone up, to the point where many of them are looking at how they can convert their effluent into something else so they can avoid high waste water treatment charges.

Water as a free commodity

According to Don the fundamental problem is that water is treated as a free commodity.  The water pricing model means that you are not being charged based on the volume of the commodity you consume, but on the cost of processing it to convert it to a potable state. If it was priced as other commodities are, such as natural gas or oil, conservation would be very financially rewarding.