Illinois Water Audit and Loss Control Training Workshop
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1 Illinois Water Audit and Loss Control Training Workshop Fall 2014 IWA/AWWA Standard Water Balance Own Sources Water Imported Total System Input ( allow for known errors ) Water Exported Water Supplied Authorized Consumption Water Losses Billed Authorized Consumption Unbilled Authorized Consumption Apparent Losses Real Losses Revenue Water Non- Revenue Water Billed Water Exported Billed Metered Consumption Billed Unmetered Consumption Unbilled Metered Consumption Unbilled Unmetered Consumption Unauthorized Consumption Customer Metering & Data Inaccuracies Leakage on Mains Leakage on Service Lines (before the meter) Leakage & Overflows at Storage 1
2 Real Losses Also called Physical Losses water that enters the distribution system, but never reaches a user. Includes: Leakage on transmission and distribution mains Storage tank overflows Service Line leakage up to customer meter Reducing real losses creates an additional resource which reduces operating costs and can be used to defer capital expenditure Apparent Losses Also called Paper or Economic Losses water that reaches a user, but is not properly measured or paid for. Includes: Theft Customer metering inaccuracies Data handling errors Reducing Apparent losses increases revenue but creates no new water 2
3 Non-Revenue Water (NRW) Is the difference between the volume of water produced and the volume of water billed to customers It consists of three elements with different values in $/gallon: Real Losses Apparent Losses Unbilled authorized consumption (political losses) Use this term instead of unaccounted-for-water Lots of new terminology Own Sources Water Imported Total System Input ( allow for known errors ) Water Exported Water Supplied Authorized Consumption Water Losses Billed Authorized Consumption Unbilled Authorized Consumption Apparent Losses Real Losses Revenue Water Non- Revenue Water Billed Water Exported Billed Metered Consumption Billed Unmetered Consumption Unbilled Metered Consumption Unbilled Unmetered Consumption Unauthorized Consumption Customer Metering & Data Inaccuracies Leakage on Mains Leakage on Service Lines (before the meter) Leakage & Overflows at Storage 3
4 Categorize Data Leak on transmission main Toilet leak Straight pipe Line Flushing Leak adjustment Wrong multiplier Storage tank overflow Flat rate accounts Slow meters Game Time 4
5 Common Pitfalls I What did we learn the first time around What did you learn the first time around? Time periods (production vs. meter reading) Units (MG vs. 1,000 gal) Financial calculations (include salaries?) Default values (take a zero or the default percentage?) Double counting (water exported should not be in billed metered) Production meter calibration vs. accuracy testing (electronics vs. correct flow reading) 5
6 Big Clues to Potential Errors Check to see if you have a validity score Failure to complete the audit grading scale fully will result in no calculated score An ILI of < 1 (This is theoretically not possible) An ILI of > 12 Very High Validity Score (>85) coupled with Very Low ILI (<2) after first audit Observations from Large System Audits Reconcile period of water supplied with water authorized consumption Billing period may be offset Caution of negative ILI s (more water consumed than supplied) Leaks and Breaks do not go in unbilled unmetered they are real losses Average cost of real losses is usually less than cost of apparent losses (units $/1,000 gal for apparent losses, $/Million gallons for real losses) Order of magnitude of losses (real is more than apparent, typically) 6
7 Validity Scoring Must meet/exceed all criteria to be eligible for the score Don t over/underestimate score Must be defensible (explain why 8 was picked instead of 6) What did you learn? Validity calls Team meetings Monthly tracking Calculations workbook 7
8 Common Pitfalls II How to Avoid Falling in to the Trap Default Values Provided for you in software Calculated based upon a comprehensive review of systems during the development Automatically receive a validity score of 5 Provided for 2 inputs Unbilled unmetered authorized Unauthorized consumption Use them Focus on a policy change to meter as much as possible even if it is not billed. 8
9 Some Unbilled Unmetered Authorized Fire Uses Fire fighting Training Hydrant testing System use Flushing Testing Plant use Cleaning Construction Political Loss (if not metered) Government buildings Public amenities (fountains, parks, golf courses) Landscape maintenance Public areas (medians, tree plantings) Not leaks and breaks Unauthorized Consumption Illegal connections Open bypasses Misuse of hydrants Meter tampering Use of unmetered fire for service Failing to notify utility when service is established and not receiving a bill Focus on strong policies/practices and revenue recovery activities designed to mitigate this. 9
10 Master Meter Error Adjustment This is your production meters leaving the plant Meter adjustment from verification testing, not electronic calibration Should not be 0 If testing not performed, use 1% to 5% under-registration Customer Metering Inaccuracies Considerations that determine accuracy Physical accuracy to measure flow Right-sizing Correct type of meter for usage Consider this the first step in consumption data gathering All the other billing components and considerations are not a part of this input 10
11 CMI getting at the Number Physical flow measurement Meter testing data (Rep sample 10%) Large meter testing Residential testing programs Weighted average of the data applied to appropriate consumption volume Can use factory default if no testing program is in place (1% to 2%) CMI The basis for all data gathering and input calculations arise from meter testing programs Meter testing is not the same as calibration Calibration should occur following the test to improve accuracy. Utilize the sample of tested meters to extrapolate data across applicable category and size of meter Field validation and billing system review coupled with testing and calibration will improve data validity and reduce apparent losses. 11
12 Systematic Data Handling Errors Everything else that happens between the meter reading and the bill. Reading errors Data entry errors Estimated bills Stopped meters Adjustments to consumption Black hole of customer accounts: (lost, not billed, not transferred) Bad policies (Non-bill status, temporary builder accounts, etc.) SDHE Should not be 0 Validity Score Low Flow chart billing process Billing system staff and meter reading representative need to be involved How do you begin to quantify Reports (adjustment report, misread report, estimated bill report, stopped meters report, exception report, builder accounts report) Policy review 12
13 It s the Money Financial Indicators Won t change your ILI Will make this a useful tool for utilities Clearly caused some problems Already seized upon by the media What s all this lost water costing Illinois Citizens? Three Values Total Annual cost of operating water system Customer retail unit cost Variable production cost Total Cost of Operating Water System What costs are associated with water system only in a combined system If there is shared staff/equipment try to allocate a % to water This still includes the chemicals, energy, pumping costs Does include staff and depreciation Combined Water and Sewer System Budget 13
14 Customer Retail Unit Cost THIS IS CALCULATED PER 1,000 GALLONS What the CUSTOMER pays per unit of water billed to them (1,000 gallons or CCF) Different rates (either customer class or tiers) Weighted average easier if you have 2-3 rates Multi-rates simple calculation: Total annual revenue from water sold (not including tap/late fees) / total annual volume of water sold If you bill in $/CCF you can use those units, but be sure to select them in the audit (or convert to $/1,000 gal) Cost of apparent losses are calculated at this rate Multi Rate Calculation Ex. Utility has 6 Rates $2.83-$8.25 Total Revenue for water sold $kgal $92,275,204 Total Volume Sold kgal 19,453,210 $92,275,204/19,453,210 $4.74/Kgal 14
15 Variable Production Cost THIS IS CALCULATED PER 1,000,000 GALLONS The Cost of supplying the next gallon of water For purchase systems this is the wholesale cost to purchase water (in $/MG) If you treat drinking water this is: chemicals, power to treat and pump water (in $/MG) If you have both it is a weighted average based on how much of each you supply your system. Your water superintendents or financial staff should be able to provide these numbers Check your work cost is much higher for purchase systems Ex. If it is $.60/1,000 to produce VPC is $ Ex. If it is $2.34/1,000 to purchase VPC is $2, Real losses are valued at VPC Variable Production Cost Groundwater systems are typically $150-$500 per MG Surface water systems are typically $500 - $1,500 per MG Purchase systems are typically $1,500 - $3,000 per MG If you are outside these ranges, check your units! 15
16 This is your workshop What did you find? What can we clarify? What were your biggest issues? Understanding Validity Are my numbers valid? 16
17 What do those scores mean? Each data input has a Data Grade that is used to calculate your overall audit Data Validity For each input, there are criteria defining each Grade If you meet or exceed all criteria in a score, go up If you don t meet at least one of the criteria, even if you exceed all others, go down What does my grade mean? Be realistic and truthful There will be specific actions that can be taken to improve data grade The grades are weighted in the calculation of overall validity score Priority areas of attention are based on their importance and effect on overall validity when modified 17
18 Examples Is my grade good or bad? There is no good or bad, only high or low Don t compare yourself with others, only yourself Identify areas to improve your grades that make sense (financially) 18
19 AWWA Water Audit Software - Grading Matrix Game Time 19
20 Do People Really Care? Press Want a story wasteful local utility Elected Officials Want CYA when press and environmentalists call Environmentalist Want 0 loss of a precious resource Believe it is possible. Utility Staff Want to know what to do with this Citizens Are surprisingly busy What s Your Biggest Fear 20
21 No One Understands Water Loss is complex Technical The word loss (no way this is positive) Up on the web See it like they do A way for accounting for our water Where did it go? How much did that cost? Can I stop it? Up on the Web???????? What is going up: Validity score, ILI, 3 areas for improvement listed at bottom of audit 21
22 We Don t Look so good System to system comparison Human nature It will happen Message should always be about your utility Turn the ship back to building a better utility You got a D Focus on next steps How you are moving forward Don t focus on what you are missing What are you gaining Unavoidable Loss? How citizens see us delivering water How we think about delivering water 22
23 Bridge the divide Not a technical discussion It is a scale discussion Volume: millions of gallons Delivery mechanism: miles of pipe Visibility: underground Environment: Changing elevations, roads built over it, soil changes, climate influences Frame it using your utility It s all New to Me This could work in your favor We tend to get too technical Do not drown the utility in a sea of acronyms and water words As we learn we are on a more level playing field As we gain knowledge we are having to share it with our colleagues We don t have the shorthand yet 23
24 Spin the Message In tough economic times you are looking at non-revenue water Water that is not returning money to the utility Looking at internal efficiencies and policies to get the most value from the water supplied This can be two-fold message Financial value Environmental value supply-side conservation Focus on what you are doing The audit informed the utility s efficiency efforts It did not end there Everyone can do something Evaluating policies and procedures Increasing internal departmental coordination Looking at processes All free Common Questions How does your system compare? Why is our validity score so low? What are you going to do about all this water? How much is this costing/rates Why do you need a reservoir you are losing millions of gallons of water? 24
25 Resources IEPA ISAWWA IRWA Talking Points Handout of the Common Questions we completed in class? Resources 25
26 26
27 Metering and Accountability Policy Statement Asset Management Policy Statement 27
28 Methods to Reduce Real Losses 28
29 Methods to Reduce Apparent Losses Replace inaccurate meters Reduce/ Eliminate theft and illegal consumption Up-to-date accounting of customers and water use. No data transfer errors. Ensure accuracy of analysis from archived data and data used for billing / water balance Benchmarking Go to website 29
30 Benchmarking participants 2012 Benchmarking Water Systems in the last 3 yrs. The National dataset only actively validated dataset with a 3 yr. history 30
31 Benchmarking Water Systems Benchmarking Water Systems 31
32 Open Discussion What did we miss? What else do you want to discuss? Frequently asked questions What will be done with the audits? What does my audit mean? Am I doing well? Is there room for improvement? Is it worth it to get my score from 8 to 9? What do I do next? How can I reduce losses? What is the payback? 32
33 Contact us anytime! IEPA ISAWWA IRWA???? Illinois Water Audit and Loss Control Training Workshop Fall
Illinois Water Audit and Loss Control Training Workshop
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