WHAT LIES BENEATH THE SURFACE non-revenue water (nrw)

Transcription

1 WHAT LIES BENEATH THE SURFACE non-revenue water (nrw) By: Vince Guenthner

2 INTRODUCTION As many utility leaders and elected officials are aware, non-revenue water (NRW) is an ongoing challenge that water utilities here and around the globe must address. For many, NRW often sits on the backburner, in favor of more immediate issues, not receiving the necessary attention or funding that it requires. The issue should be treated with urgency and not addressed only when a crisis arises. What s more, tackling NRW can have significant benefits to the business end of utilities and municipalities alike. NRW is also an out of sight, out of mind issue for utility customers, who simply receive clean water without a view into what occurs beneath the surface. The mistake for utility and municipal leaders is to believe their customers lack of awareness or appreciation for NRW means that it is not a concern to be prioritized. Combating water loss helps utilities by reducing the strain on limited capital and personnel resources. Doing so helps utilities conserve those resources, retain lost revenue and extend the benefits to their customers via improved service, lower water bills and more. There are solutions to address the impact of NRW and, while it can t be prevented 100 percent of the time, the steps outlined in this paper can be implemented to reduce the amount of lost water and its impact on water system operations. At a time when water conservation is a global priority, and customer satisfaction and water quality are trending topics, it s more important than ever that NRW is addressed to serve the mutual best interests of utilities and their customers. 1

3 the CHALLENGES NRW has become a critical issue in today s society impacted by population growth, aging infrastructure and long-term droughts that are seen across the country. As defined by Daniel Duffy in the June 2016 edition of Water Efficiency Magazine, 1 non-revenue water is simply water that does not make it from point A (the source of the water distribution system) to point B (the end user), because it got lost along the way due to leakage, wastage, or theft. According to the Water Research Foundation, 2 based upon analysis of regional water audit submissions, the annual real leakage loss in the United States totals 297 billion gallons enough to supply 27,123 3 American families with water for approximately 75 years. NRW is a significant issue that needs to be addressed, as it can damage public infrastructure, raise utility bills, and jeopardize public health. If left untreated, it can have a snowball effect and increase the risk of potentially catastrophic consequences, such as what happened when a 90 year old water main break in Los Angeles spewed 8-10 million gallons of water onto UCLA s campus on July 29, NRW impacts the financial viability of water utilities through lost revenue and increased operational costs that can also squeeze resources needed for infrastructure renewal continuing the NRW cycle. While it is clear the consequences of NRW negatively affect the utility industry, as well as consumers, the causes are often not addressed in a proactive manner. Identifying NRW can be a tricky undertaking for utilities, because the locations of water loss are most frequently hidden underground and not easily identifiable. Therefore, determining at what step in the process water loss is occurring can be a major challenge, requiring an investment in time and resources. Resources tend not to be deployed until there is a highly visible water main break, but unfortunately, in these most dramatic scenarios, costly reactive responses are typically the only option. Even small, less dramatic losses can have a significant impact over time. In a study co-authored by Allan Lambert, a leading authority on water leakage management notes that, in well-run systems the majority of leaks and bursts (and of the annual volume of real losses) occurs on service connections rather than mains. 4 What utilities need to prioritize then, is the ways in which they can employ preventative efforts to avoid disruptions from major water main breaks to leaks on individual service lines. In developed countries, water loss is often the result of aging infrastructure, but even with this there are steps that can be taken to reduce NRW. The good news is, according to the EPA, nearly 75 percent of water loss is recoverable. 5 However, the investment required to tighten the infrastructure will be no small feat and will require tradeoffs. According to the 2012 American Water Works Association (AWWA) report Buried No Longer, 6 restoring existing water system infrastructure as it reaches the end of its service life and expanding systems to serve a growing population will cost at least $1 trillion over the next 25 years. The significance of that investment is only rivaled by what could be at risk the safety of water we use for consumption. Non-revenue water is simply water that does not make it from point A (the source of the water distribution system) to point B (the end user), because it got lost along the way due to leakage, wastage, or theft. 2

4 the need for RESOLUTION and CHANGE starts with utilities The responsibility of generating change begins with utilities. Given today s age of the customer mentality, it s more important than ever that customer satisfaction is made a priority just as NRW and other issues need to addressed. There is value in utilities communicating to customers that the burden of water loss does not fall entirely on them. For example, utilities should regularly schedule meter readings, and where possible, shorten the periods between readings to help mitigate impact of rising water delivery costs or high bill complaints that may arise from customer side leaks. Utilities may consider helping to mitigate this by providing rebates on bills that are high due to leaks beyond the meter a demonstration of customer focus that can further enhance a utility s reputation and build loyalty among the homeowners they serve. A commitment to customers is essential for utilities as they focus on tackling the issues - NRW or otherwise. Additionally, utilities can employ preventative measures such as leveraging Advanced Metering Infrastructure and Acoustic Leak Detection to help identify where the most significant NRW may be occurring upstream and downstream of customer meters. This can further minimize the impacts of NRW, ultimately limiting costs and disruption. Utilities should also employ best management practices available for water loss control, including regularly performing water audits using the AWWA water audit methodology. The AWWA Free Water Audit Software includes analytical tools that enable the utility to validate rates and the accuracy of data gathered. Monitoring with these tools on a regular basis and taking a public stance of actively managing leakage can greatly reduce NRW and improve public perception. Finally, improving efforts around service line management, like proactively replacing pipes and service lines rather than waiting until they begin to fail will in return limit the number of disruptions; saving time, resources and money. CUSTOMERS PLAY a role as well Customers care about their communities, but they are likely to be unaware of NRW, how it affects them and the impact it can have over the long term. Utilities must take the initiative to educate homeowners so they are better equipped to make informed decisions and contribute to NRW prevention and mitigation. For utilities, simple things such as homeowner property inspections during meter replacement can be a chance to catch and prevent any private property service line or in-home issues before they become larger more costly ones. 3

5 an ally for UTILITIES AGAINST NRW While it may not be possible to eliminate all cases of NRW, on either side of the meter, when leaks do occur, speed of repair is key. A 2012 study conducted by the Philadelphia Water Department found that average response to leak repairs on customer service lines was 4-5 weeks, while industry best practice was 2-4 days. 7 On private property, utilities can aid this process by partnering with private sector companies to offer repair service plans as a solution for residential customers so that leaks on their property are addressed in a timely fashion. These coverage plans can help utilities provide their customers with a line of defense in the event of a water line break or leak. By encouraging customers to enroll in these optional service programs, utilities can ensure that when customers are faced with a service line break or leak, they are protected from unexpected expenses and the repairs will be completed without delay. Another benefit of partnerships with companies offering this type of repair service program is that these companies can also support utilities in helping to increase awareness and education of homeowners about issues important to the utility, including NRW and conservation for example. Together, utilities and such partners can further customers knowledge of water line responsibilities while protecting them from being blind-sided by unexpected costs when a crisis occurs. A better understanding of the issues, coupled with affordable repair service coverage, will ensure that homeowners can address leaks on service piping quickly and affordably. business BENEFITS Proactively managing water infrastructure renewal can cut down the cost of emergency repairs and ultimately improve customer satisfaction by reducing costs and eliminating disruption. This is what the public expects. But there is a cost benefit analysis to making these decisions and utilities must consider their own cost structure and the local operating environment in making these decisions between fixing leaks as they occur and proactive main replacement. For example, according to a presentation delivered at the AWWA ACE16 by WaterOne, the water utility serving Johnson County Kansas, it costs them $0.55 to produce 10,000 gallons of water, $7,500 to repair a main break and $135 per foot to replace water main. 8 The associated costs are high for leaks and they are also extremely disruptive creating unscheduled work, emergency road closures, and potential property damage to name a few. On the other hand fixing occasional breaks could be the right short term answer versus the cost of main replacement. It s critical that every utility know and understand their cost structure and economic tradeoff points and weigh these against customer expectations. Money and time saved by the utilities can reduce homeowner s water bills in the long term. Ultimately, utilities that seek ways to save their customers money and offer great services together will see increased customer satisfaction. Utilities that seek ways to save their customers money and offer great services together will see increased customer satisfaction. 4

6 call to ACTION Non-revenue water is an issue around the globe, yet the general public is largely unaware of it and the challenges it presents. We ve reached a period here in the U.S. where our aging water infrastructure is driving increased NRW. This is impacting utilities, homeowners, local communities and the country as a whole. It is a critical issue that requires significant attention and needs to be addressed. Utilities stand to benefit a great deal by addressing NRW for their own business objectives and reputation. It s important for water utilities to take steps that help educate their customers and consider public private partnerships to help with managing and mitigating issues such as NRW. Utilities need to leverage best management practices, including economic modeling, regular water audits, advanced meter technologies and offering customers repair solutions to ensure that NRW is limited. Managing NRW is a difficult task, but there are numerous options that can be deployed by utilities and with private sector companies to mitigate its impact. meet the AUTHOR Vince Guenthner has over 30 years of experience as a Government Relations professional. In 2013, he formed Vince Guenthner Inc., which offers utilities consulting in business development, strategic planning and government relations. Prior to opening his consulting business, Vince Guenthner served as Manager of Government Affairs for the Louisville Water Company (LWC) from October of 1991 to September of Mr. Guenthner was responsible for acting as a liaison with local, state and federal elected officials. He was responsible for monitoring legislation, advocating the company s position and lobbying the KY General Assembly. Mr. Guenthner s leadership positions in the Company included membership on the Strategic Planning Team, support for the company s Regionalization and Business Development efforts and management of the Mayor s Utility and Public Works Advisory Committee, which was tasked with evaluating synergies between Louisville Water, Louisville MSD and the Louisville Department of Public Works. Prior to his employment with Louisville Water Company, Vince Guenthner served in a similar capacity for Greater Louisville Inc. While at the Chamber Mr. Guenthner lead the Association s efforts to support the 1990 Education Reform Act and the constitutional amendment allowing for succession of Louisville s Mayor, Jerry Abramson. Vince Guenthner graduated from the University of Louisville in He and his wife, Kim Guenthner have two sons ages 21 and Non-Revenue Water Loss: Its Causes and Cures, Daniel P. Duffy, Water Efficiency Magazine, June ( 2. Water Audits in the United States: A Review of Water Losses and Data Validity, Water Research Foundation Project 4372b, ( org/publicreportlibrary/4372b.pdf) 3. Calulated based upon Indoor Water Use in the United States, EPA ( 4. A Review of Performance Indicators for Real Losses from Water Supply Systems, IWA/AQUA, Jan ( 5. The Art of Water Recovery, David Bornstein, The New York Times, July ( Money and time saved by the utilities can reduce homeowner s water bills in the long term. 6. Buried No Longer: Confronting America s Water Infrastructure Challenge, American Water Works Association (AWWA) City of Philadelphia Water Accountability Committee: Fiscal Year 2012 Water Audit, George Kunkel, PWD, ( 8. The Financial Balancing Act of Real Loss Mitigation: Stemming the Flow of Revenue Water Going Down the Drain, Darin Kamradt, WaterOne, ACE16 Technical Session TUE48,