Fall 2014. Real. Losses. Apparent. Losses. Unbilled. Authorized. Consumption. Billed. Authorized. Consumption. Non-. Revenue. Water. Revenue. Water. Leakage & Overflows at Storage. Billed Unmetered Consumption. ID: 595694
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Illinois Water Audit and Loss Control Training Workshop
Fall 2014
Slide2RealLosses
ApparentLosses
UnbilledAuthorizedConsumption
BilledAuthorizedConsumption
Non-RevenueWater
RevenueWater
Leakage & Overflows at Storage
Billed Unmetered Consumption
Billed Metered Consumption
Billed Water Exported
Leakage on Service Lines(before the meter)
Leakage on Mains
Customer Metering & Data Inaccuracies
Unauthorized Consumption
Unbilled Unmetered Consumption
Unbilled Metered Consumption
Water
Imported
OwnSources
TotalSystemInput( allowforknownerrors )
WaterLosses
AuthorizedConsumption
WaterExported
WaterSupplied
IWA/AWWA Standard Water Balance
Slide3Real 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
Slide4Apparent 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
Slide5Non-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”
Slide6RealLosses
ApparentLosses
UnbilledAuthorizedConsumption
BilledAuthorizedConsumption
Non-RevenueWater
RevenueWater
Leakage & Overflows at Storage
Billed Unmetered Consumption
Billed Metered Consumption
Billed Water Exported
Leakage on Service Lines(before the meter)
Leakage on Mains
Customer Metering & Data Inaccuracies
Unauthorized Consumption
Unbilled Unmetered Consumption
Unbilled Metered Consumption
Water
Imported
OwnSources
TotalSystemInput( allowforknownerrors )
WaterLosses
AuthorizedConsumption
WaterExported
WaterSupplied
Lots of new terminology
RealLosses
ApparentLosses
Non-RevenueWater
RevenueWater
Leakage & Overflows at Storage
Billed Unmetered Consumption
Billed Metered Consumption
Billed Water Exported
Leakage on Mains
Customer Metering & Data Inaccuracies
Unauthorized Consumption
Unbilled Unmetered Consumption
Unbilled Metered Consumption
Water
Losses
Slide7Categorize Data
Leak on transmission main
Toilet leak
Straight pipe
Line Flushing
Leak adjustment
Wrong multiplier
Storage tank overflow
Flat rate accounts
Slow meters
Slide8Game Time
Slide9Common Pitfalls I
What did we learn the first time around
Slide10What 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)
Slide11Big 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
Slide12Observations 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)
Slide13Validity 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)
Slide14What did you learn?
Validity calls
Team meetings
Monthly tracking
Calculations workbook
Slide15Common Pitfalls II
How to Avoid Falling in to the Trap
Slide16Default 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.
Slide17Some Unbilled Unmetered Authorized
Fire UsesFire fightingTrainingHydrant testingSystem useFlushingTestingPlant use CleaningConstruction
“Political Loss” (if not metered)
Government buildings
Public amenities (fountains, parks, golf courses)
Landscape maintenance – Public areas (medians, tree plantings)
Not “leaks and breaks”
Slide18Unauthorized 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.
Slide19Master 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
Slide20Customer 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
Slide21CMI – 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%)
Slide22CMI
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.
Slide23Systematic 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.)
Slide24SDHE
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
Slide25It’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
Slide26Total Cost of OperatingWater 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
Slide27Customer 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
Slide28Multi 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
Slide29Variable 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 $600.00
Ex. If it is $2.34/1,000 to purchase VPC is $2,340.00
Real losses are valued at VPC
Slide30Variable 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!
Slide31This is your workshop
What did you find?
What can we clarify?
What were your biggest issues?
Slide32Understanding Validity
Are my numbers valid?
Slide33What 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
Slide34What 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
Slide35Examples
Slide36Is 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)
Slide37AWWA Water Audit Software - Grading Matrix
Slide38Game Time
Slide39Do 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
Slide40What’s Your Biggest Fear
Slide41No 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?
Slide42Up on the Web
????????
What is going up: Validity score, ILI, 3 areas for improvement listed at bottom of audit
Slide43We 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
Slide44Unavoidable Loss?
How citizens see us delivering water
How we think about delivering water
Slide45Bridge 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
Slide46It’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
Slide47Spin 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
Slide48Common 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?
Slide49Resources
IEPA
ISAWWA
IRWA
Talking Points Handout
E-mail of the Common Questions we completed in class?
Slide50Resources
Slide51Slide52Slide53Metering and Accountability Policy Statement
Slide54Asset Management Policy Statement
Slide55Slide56Methods to Reduce Real Losses
Slide57Methods to Reduce Apparent Losses
Slide58Benchmarking
Go to website…
Slide59Benchmarking participants 2012
Slide60Benchmarking
21- 26 Water Systems in the last 3 yrs.The National dataset only actively validated dataset with a 3 yr. history
Slide61Benchmarking
21 -26 Water Systems
Slide62Benchmarking
21 - 26 Water Systems
Slide63Open Discussion
What did we miss? What else do you want to discuss?
Slide64Frequently 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?
Slide65Contact us anytime!
IEPA
ISAWWA
IRWA
????
Slide66Illinois Water Audit and Loss Control Training Workshop
Fall 2014
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