Non-Revenue Water: Considerations and 2016 Benchmarking Data

No water system is perfect. Somewhere between entry to the distribution system and registry at customer meters, water loss will occur. Some of it is essential for standard operation of the system, as in the case of hydrant flushing. Also expected and allowed is water consumed for firefighting purposes and other City functions such as street cleaning. Another portion will be lost in the occasional water main break or leaking pipelines, storage tanks, or service connections. Customer meter inaccuracy can occur for a variety of reasons, such as aging equipment or improper meter sizing, resulting in either over- or under-registration, further complicating the estimation of water loss. Less often, theft related to meter bypass or tampering results in improper metering of water.

Regardless of the cause, all of the unmetered water in the system equates to lost revenue for the utility enterprise. Therefore, tracking and minimizing water loss is an important performance indicator in terms of operational and financial metrics. Most utilities take a very simple approach by completing a straightforward Water Balance or Water Audit.

Water Produced – Billed Consumption = Unaccounted for Water

Figure 1 summarizes the components of a detailed water balance exercise. It is good practice to understand and reasonably estimate the amount of authorized and unbilled consumption. This allows the utility to better understand the true water losses, which include commercial and physical losses depicted in Figure 1. When information is available, utilities can refine the water audit calculation to also subtract the following values to more accurately estimate the true water loss:

-Unbilled authorized consumption (hydrant flushing, firefighting, etc.)

-Unbilled consumption due to customer meter inaccuracies (based on an average estimate)

-Unbilled unauthorized consumption (if theft data is known)

-Unbilled consumption due to water main break or tank (if value can be estimated)

Figure 1: Graphical Depiction of Water Audit, Summarizing Components of Non-Revenue Water


By understanding the magnitude of commercial and physical losses within the system, the utility can implement operational practices to target reduction in these areas. It is helpful to determine the actual amount of water loss within a system so the utility can understand the benefit of taking measures to reduce water loss. In many systems, the financial and/or operational benefit will be substantial. In other systems, the benefit may not be sizeable enough to devote the necessary resources.

One purpose of the AE2S Annual Utility Rate Survey is to gather data to provide benchmarking valuable information for systems in the region. Figure 2 summarizes the water loss percentages reported by 110 municipal respondents to the 2016 AE2S Annual Rate Survey. The average and median reported values, respectively, were 12.1 percent and 9.9 percent. The results show that nearly 75 percent of survey participants who reported calculated water loss measured loss at 15 percent or less. Though a very general measure, this simple loss percentage is one statistic that systems normally track and use as the basis for the prioritization of watermain replacement projects.

Many utilities have adopted proactive watermain and meter replacement strategies. Such an approach to identifying and reducing non-revenue water can be an integral component of an overall asset management approach.

Figure 2: Range of Reported System Water Loss (2016 AE2S Annual Rate Survey)












Understanding and addressing water loss in your system is important to efficient operations and financial health of the utility.  In general, minimizing commercial losses will bring immediate payback to the system.  Efforts to eliminate commercial losses center around improving customer meter accuracy –  regular meter replacements, appropriate meter sizing, prompt identification of unauthorized water use, etc.  Correcting and minimizing physical losses can be expensive but the long-term benefits to the system are substantial.  Systems are well-advised to develop a consistent asset management approach to replacement of watermain and other distribution system components.