WATER AND THE INTERNET OF THINGS: 2016

WATER AND THE INTERNET OF THINGS: 2016

Forecasters predict that California could receive record amounts of rain during this winter because of El Nino. Smart water management is important in times of no rain or too much rain so our conservation efforts must continue. The Internet of Things (“IoT”) can help the water supply from the El Nino rains be used more efficiently and with less waste.

I became interested in water and the IoT over a year ago when I had a below surface water leak at home that resulted in a large water bill.[1] Since I live in the Silicon Valley, California, the high tech capital of the world, I thought there should be a better way to track water usage so problems can be identified and solved sooner. I needed a smart water meter, an IoT application, that I could read online, at least on a daily basis, to monitor usage and provide actionable information. Motivating water conservation is more effective when users have a clear and timely picture of how water is used.

What is the Internet of Things?

Smart water meters are a form of IoT, a network of technologies which can monitor the status of physical objects, capture meaningful data, and communicate that data over a wireless network to a software application for analysis on a computer in the cloud. Technologies are capable of monitoring objects such as smart water meters and other electronic devices, organisms or a natural part of the environment such as an area of ground to be measured for moisture or chemical content. A smart device is associated with each object which provides the connectivity and a unique digital identity for identifying, tracking and communicating with the object. A sensor within or attached to the device is connected to the Internet by a local area connection (such as RFID, NFC or BTLE) and can also have wide area connectivity. Typically, each data transmission from a device is small in size but the number of transmissions can be frequent.

Each sensor will monitor a specific condition or set of conditions such as vibration, motion, temperature, pressure or water quality. More applications have become feasible because the cost and size of such devices continues to decrease and their sophistication for measuring conditions keeps increasing. Cisco estimates that 50 billion devices will be connected to the Internet by 2020. [2]

For example, at home I would need a smart water meter (device) that collects usage data which is communicated wirelessly to the water utility company where software analyzes the data and reports the results on the web site for me to view. In the San Francisco pilot program described below, a customer can view the data as it comes in, as well as compare their numbers with past use and city averages. The usage data should eventually alert me to a leak or another device that measures water pressure could detect a leak faster. To find the location for repair, however, I would need to add sensors to measure pressure at various locations in my water system. The sensors would be connected to data analytics software in the cloud that would analyze the data transmitted to identify the location of the leak between two sensing points in my water system. This is a much more complex application than simply tracking water usage and illustrates the importance of the software data analysis applications needed in order to make sense of the transmitted data.

Smart Water Meters Status

One of the largest pilot programs of smart meters and related water management software platforms (a smart water management network) is in San Francisco. Water consumption is measured hourly and data is transmitted on a wireless basis to the utility four times a day. Both the utility and customers can track use. A pilot program in the East Bay Municipal Water District, which targets mostly single-family homes, provides a daily update of hour-by-hour consumption via a website. Consumers can be alerted, for example, by email or phone call, when water use exceeds a specified limit or when a meter indicates continuous running water for 24 hours.[3]

At the end of 2014, about 10 percent of California customers were equipped with smart water meters. That number is currently about 15%. While more cities and water districts in California have begun, or are planning, pilot programs, smart water meter implementation remains slow in California and elsewhere around the U.S. Smart water meters in the U.S. account for less than 20% of the approximately 100 million water meters nationwide, according to the smart-utilities research firm IHS Inc.

Budget limitations are the largest obstacle to faster adoption of smart water meters. Smart water meters are more expensive and less ruggedized than traditional mechanical meters. A complete smart meter management network can also be expensive and some utilities do not have the capability to effectively deploy and manage such technology. Some vendors are offering a managed services business model to utility companies for this purpose.

There are more meter and platform products available in the market but there does not appear to be any market leader yet. The products vary from the very basic to those that integrate water metering networks with leak detection and usage monitoring applications.

Can the IoT Help Solve the California Water Problem?

I believe that even the simplest form of smart water meter installed at homes and businesses on a wide spread basis can provide actionable information, which if applied with common sense, can help save millions of gallons of water. [4] If the water utilities can provide the smart meter and basic water management platform, private vendors can offer more sophisticated features that are accessible as an app on a mobile phone similar to how AT&T provides the Digital Life home security system. Private vendors are already offering advanced features such as water leak detection.

The universe of water IoT networks can be divided into infrastructure, governmental, business and consumer. The water infrastructure IoT will help improve a utility’s water quality, supply, treatment, transportation and storage facilities such as reservoirs. Water savings will be the greatest and action should be the fastest at the infrastructure level. A utility should be able to justify the expenditure on the water savings particularly on the basis of planning for scarcity. State and local governments can save money and also have a major impact on supply by implementing the IoT for buildings and other uses like landscape irrigation. An IoT water management network for a large building or office park can help water be used more efficiently. Water cost savings and forced conservation will help drive adoption by businesses (including California’s important agricultural industry) and consumers, but they will be looking for a clear return on investment.

A utility can use an IoT network to remotely determine the status and working condition of equipment (open or closed, on or off, full or empty, etc.). The information can be actionable. A gate can be opened or closed or a pump turned on or off remotely to adjust the flow of water through a water transportation system. Pumps, gates and other equipment with moving parts in the water infrastructure can be monitored for vibration and other indications of failure. If a water pump is about to fail, the utility can be prompted to repair or replace it. An IoT-enabled water treatment plant can report if its filters are clean and functioning properly. The IoT can measure water pressure in pipes to find leaks faster in the water transportation system or the presence of certain chemicals in the water supply.

Agriculture consumes about 40% of the freshwater available in California with a large amount being wasted by leaky irrigation systems, inefficient field application methods and the planting of water intensive crops in the wrong growing location. The IoT has great potential to make water use smarter for the agricultural industry, particularly in irrigation efficiency.

Another focus for water savings should be landscape irrigation in parks, medians and elsewhere. This is a major use of water in cities. Nationwide, it is estimated to be nearly one-third of all residential water use and as much as half of this water is wasted due to runoff, evaporation or wind. [5] Landscape irrigation systems, which apply sophisticated data analytics to a wide variety of objects, are available in the market. [6] Current weather data is combined with sensors for moisture, heat and other data such as the slope of the land, type of soil and the relative exposure to sunshine at a particular time.

Legal Issues

The way that IoT physical components are combined into a network and the related data analytics software can have significant business value. Intellectual property (IP) protection is important. IoT system designers need to think both offensively and defensively in creating an IP strategy so they have the freedom to operate without a license from a third party and also provide a barrier to entry by a competitor. There are already more than 300 patents issued in which the term “Internet of Things” appears when the US Patent and Trademark Office (USPTO) data base is searched.

Ownership rights to data have emerged as an important issue as IoT business models have evolved. The revenue stream potential of such data may be greater than from selling or licensing the software and hardware components of such networks.

IoT networks need to be designed and implemented with adequate security and privacy protection. The threat to security and privacy may not be recognized to be as significant as in other types of networks since IoT devices have limited functionality and connectivity. [7] But there are more points of possible intrusion and vulnerability in an IoT network. A network failure or hacker attack could have serious consequences, particularly in the water infrastructure. For example, a hacker could target sensors at a water treatment facility to cause false readings on whether water is potable. Most water infrastructure IoT networks will have only security concerns but there will also be some privacy issues. Consumer IoT networks will need to protect both privacy and security. Hacking into a smart water meter, for example, could reveal whether or not a family is at home.

As the implementation of smart meter and other IoT networks grows, the data produced can provide actionable information for regulatory authorities for determining compliance by residential, agricultural and other business water users as well as by parties in the water infrastructure. The data can be the basis for enforcement actions so it must be reliable.

There will be liability issues if the IoT network fails or makes a wrong determination. Liability insurance will be needed by the IoT components and systems vendors that provide the network. Limiting liability by contract with a utility, state or local government or business may be feasible in the same way as for other equipment and software but contracts will not be possible in many consumer applications.

Summary

The simplest implementation of smart water meters for residential customers would help conserve millions of gallons of water. The IoT can be used to determine when and how much water is needed in landscape and agricultural irrigation in times of El Nino as well as draught. Although the IoT cannot make it rain or snow or fix leaky water pipes, it can reduce water shortages by providing actionable information to help usage be more efficient and less wasteful.

[1] See Water and the Internet of Things, October 28, 2014, rroyselaw.com/water-and-the-inter-of-things

[2] www.cisco.com/web/solutions/trends/iot/overview.html

[3] Water Meters Begin to Get Smarter, www.wsj.com/articles/water-meters-begin-to-get-smarter-1430881505

[4] 7 Ways Smart Meters Save Water, www.wateronline.com/doc/ways-smart-meters-save-water-0001

[5] www.epa.gov/WaterSense/pubs/outdoor.html

[6] www.govtech.com/fs/perspectives/3-Ways-the-Internet-of-Things-Can-Address-the-Water-Crisis.html

[7] A hacking incident involving connected cars has been mentioned as a warning on the vulnerability of the IoT. www.forbes.com/sites/dougnewcomb/2015/08/10/putting-the-recent-wave-of-car-hack-hysteria-in-perspective/

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Fred Greguras
fgreguras@rroyselaw.com

Fred Greguras is an experienced business lawyer and entrepreneur. He works with global and U.S. businesses from startup through public company stage with an emphasis on start-up and emerging growth companies. He has helped many foreign companies set up and expand their operations in the United States and represents various types of businesses including software, clean technology, semiconductor and medical device companies. His transactional experience includes equity and debt financings of various types including project financings for energy projects, seed and venture capital and other financings. Mr. Greguras has also advised on many M&A, joint ventures, licensing and other business transactions both in the US and internationally. Fred has substantial experience representing companies with a market focus on, or operations in, China, Vietnam and India, and in supporting investors and businesses from those countries.
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