My water meter just joined The Internet of Things and I’m not sure how I feel about it.
A few months ago, I got a letter from the water company asking to change my water meter. I was annoyed by this request because they just replaced my water meter and it’s a hassle to be home for them to install another one. I ignored their initial request. However, after repeated bright red “Second Notice!” door hangers and multiple voice messages at home and at my office saying I was among the last to get it, I finally relented.
Last Thursday, the technician came to my house and installed the new meter. When he was there, I asked him about the new meter and why they were replacing the old one.
The new water meter is an impressive piece of technology. It’s a combination of a flow meter and a transmitter. The flow meter is an Elster SM700 with no moving parts designed “to prevent lost revenue.” The transmitter is a Firefly D4100 that requires only a single watt of electricity to operate. It’s equipped with a GPS so it knows its exact location and uses a mesh network to transmit hourly readings to a company in Plano, TX called Datamatic whose tagline is “we read you.” My water company, Hanover Water Works which is owned by the town, accesses the database at Datamatic to get the information it needs to send me my monthly water bills.
The new meters are not cheap. At an installation cost of $750,000, these new meters are costing our small town of Hanover, NH (population 10,000) a tidy sum. I assumed justification for the cost would be the savings from reading the meters more efficiently. However, that’s not the case.
The old water meter was equipped with a radio transmitter that could be read by driving by with a receiver. It only took the meter reader a single day per month to read all the meters in town. Assuming he gets paid $25 per hour, the cost to read the meters is only about $200 per month in labor. Adding in fuel, vehicle wear and tear, payroll taxes, employee benefits, etc. the total cost can’t be more than $500 per month or $6,000 per year. At that cost, the payback period for the new meters is 125 years – clearly a terrible investment if the goal is reading the meters more efficiently.
So, why is our town replacing the meters? It must be for the data. After all, the water company does not need hourly readings to send me a monthly water bill. Since I don’t have access to the data, the benefit goes to somebody else.
This got me thinking about Google’s recent purchase of 3-year-old Nest Labs for $3.2 billion – yes, that’s billion with a B. Nest sells thermostats that, like my new water meter, transmit utility data from my house back to a central location. Unlike my water meter, Nest’s products are beautifully designed and offer me the benefit of reducing my energy bill by $173 per year on average. At a cost of $249, it pays for itself in 1.44 years – a good investment.
It was a surprise to most of us that Google is entering the thermostat business. Some speculate it’s to get a better understanding of a realm that until now Google had no knowledge – what we do when we’re not staring at a screen. After all, Google’s main product is us and the more they know about us the more they have to sell.
And now Datamatic knows about my offline behaviors through water usage data. How long will it be before this data is used for marketing? Joe is watering the lawn: sell him grass seed. Joe is washing his clothes: sell him laundry detergent. Joe is taking a shower: sell him shampoo. Joe is on vacation: sell him sunscreen … or a home security system.
As a computer scientist, I find the applications of all this data fascinating. It’s a great way to preserve our natural resources and to do a lot of good. But I also find sending my energy usage data to Google and my hourly water usage data to a company in Texas whose tagline is “we read you” a little creepy. What’s next?
Joe Pych is a contributor to The Makegood and is the Founder and President of NextMark, a company providing tools for the media planning and buying industry.