Dubbo Regional Council is asking the state government to help pay for smart water metering across the region.
It wants to introduce the technology to 17,700 homes and 2300 businesses.
The council is asking for a 50 per cent contribution to either the $3.27 million cost of installing "clip-on devices to existing connections" or the $4.54 million cost of "full meter replacement". It has not indicated who will pay for the rest.
The council's chief executive officer Michael McMahon said the council would have "access to usage data to better monitor, manage and plan for demand".
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"Smart meters allow residents and businesses to check their current water usage live online or through a third-party application on a mobile device, giving customers real-time data access that can help them avoid bill shock," he said.
"Automatic meter reads for billing purposes also reduces operating costs.
"Smart meter networks are scalable so the technology can be used for other smart devices like water level sensors, soil moisture probes and weather data."
Smart meters were introduced to council facilities after level three water restrictions began on October 1.
Mr McMahon says they are helping the council save water.
"For example, one significant council owned and operated venue has been able to make a weekly water saving of around 99 per cent through a better understanding of how much water they were using and then adjusting their operational water use accordingly," he said.
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"Smart meters really do provide us with such an accurate picture of our water usage which in turn allows us to make immediate and effective changes to conserve water.
"If we can demonstrate to government that communities and businesses of the Dubbo region are saving water, as shown by recent daily water usage figures across the region while on level four restrictions, then imagine how much more water we could save by giving people the ability to accurately track their own usage?
"We think that's a compelling case to seek some funding assistance to purchase and install smart meters for homes and business so people can be better informed on their daily water usage and empowered to better manage the 280 litres per person per day allocated under current restrictions."
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The Dubbo region has had a rocky start to level four water restrictions.
In the week ending November 10, Dubbo used 220 litres (L) of water per person per day, Wellington 251L and Geurie 293L.
In the week ending November 17, Dubbo used 284L, Wellington 294L and Geurie 343L.