Component Analysis of Apparent Losses Paul Fanner, Principal of Veritec

IDB NRW Workshop, Belize, th May Overview Introduction Components of managing apparent losses Meter under-registration Meter reading errors Water accounting errors Unauthorized use (theft) Conclusions

IDB NRW Workshop, Belize, th May Apparent losses Are in many cases the most costly losses in a water system, as they are valued at retail $’s. Reducing apparent losses can generate sufficient new revenue to fund real loss reduction programs Come in many forms and are not just metering losses

IDB NRW Workshop, Belize, th May Four Components of Managing Apparent Losses

IDB NRW Workshop, Belize, th May Meter Accuracy Error Meters can be in error for a number of reasons: Wear Incorrect Installation Incorrect sizing Inappropriate meter type Spinning or jetting Environmental problems Low flow rates

IDB NRW Workshop, Belize, th May Typical Small Meter Error Curve

IDB NRW Workshop, Belize, th May Ageing of Positive Displacement Meters

IDB NRW Workshop, Belize, th May Ageing of Velocity Meters

IDB NRW Workshop, Belize, th May Consumption Profiling

IDB NRW Workshop, Belize, th May Error Curve of New Meter

IDB NRW Workshop, Belize, th May Error Curve of Installed Meter

IDB NRW Workshop, Belize, th May Weighted Average Error

IDB NRW Workshop, Belize, th May The example below shows an existing meter and flow profile and the example above the correctly sized meter

IDB NRW Workshop, Belize, th May Four Components of Managing Apparent Losses

IDB NRW Workshop, Belize, th May Causes of Meter Reading Errors In many situations data can be recorded correctly by the meter but transferred incorrectly due to: Hard to access / read meters Illegible meter dials Meter reader error in the case of manual reads “Café” readings Fraudulent readings Scaling problems Pulse or factor problems Absence of reading validation and follow up Failure to follow up meter reading problem codes

IDB NRW Workshop, Belize, th May Review Meter Reading Process

IDB NRW Workshop, Belize, th May Data Handling Errors – Meter Reading Examine meter reading and checking processes How is data collected? What scope for manual errors –Validation and high / low / zero consumption checks Is there scope for “café” meter reading? Is there scope for meter reading fraud? How are readings transferred to billing system? What validation checks are run in the billing system? What follow-up is done with exception reports? What follow-up is done with meter reading error codes? How are zero consumptions checked? Check a sample of readings through these processes

IDB NRW Workshop, Belize, th May Four Components of Managing Apparent Losses

IDB NRW Workshop, Belize, th May Data Analysis Errors Once data arrives at the utility office it can often be misused Billing systems not designed to retain integrity of consumption data Estimates are generated and volumes inferred Reversal of previous over-estimates Rebates are given and volumes inferred Customers can be lost or incorrectly categorized

IDB NRW Workshop, Belize, th May Data Handling Errors – Billing Processes Interview relevant billing staff: How good is customer cadastral? Are customers located on GIS? How are estimates calculated? How are over-estimates reversed? What happens to consumption data when bills are adjusted? Customer complaints Leakage allowances Etc. How does the system manage meters “going round the clock” What happens to consumption of accounts that aren’t billed?

IDB NRW Workshop, Belize, th May Billing Extract Take full extract of data re. meter reading, meter, consumption, customer information, customer class, flags for estimated, no bill etc. Year of study, plus meter reading interval either side, based on meter reading date Check samples of records to confirm correct operation of processes Determine consumption by month from data, based on meter reading date. Apply reversals! Compare with reported consumption Adjust for meter reading lag time Evaluate average number of months for stopped meters Identify any systematic errors

IDB NRW Workshop, Belize, th May Check Against Reported Consumption Volumes

IDB NRW Workshop, Belize, th May Four Components of Managing Apparent Losses

IDB NRW Workshop, Belize, th May Theft and Illegal Consumption Regular connection mis-coded Inactive connection reactivated Bypassed meter Tampered meter Illegal connection (urban and rural) Illegal use of hydrants or fill points for tankers Illegal use of fire lines Illegal use of new connections for construction water Others?

IDB NRW Workshop, Belize, th May Illegal Connections (and poor materials!)

IDB NRW Workshop, Belize, th May Tankers Often Fill in an Unauthorized Manner

IDB NRW Workshop, Belize, th May Unauthorized Hydrant Use

IDB NRW Workshop, Belize, th May How to Identify Illegal Consumption? Cross reference power consumption with water consumption records Random field investigations to identify frequency Estimate number and frequency of tankers filling up at hydrants Road cleaning? Sewer and storm drain flushing? Water trucking? Others?

IDB NRW Workshop, Belize, th May Estimate all 4 components of apparent losses of the 4-arrow diagram Apparent losses are not just meter under- registration Evaluate the economics of the apparent loss components Apparent loss reduction normally has very short payback times Tackle those components of the 4-arrow methodology that provide the highest returns first Conclusions

IDB NRW Workshop, Belize, th May P hiladelphia’s Water Audit Summary July 1, June 30, 2002 in Million Gallons Per Day (Mgd) Water into Distribution Customer Billed Usage Non-Revenue Water Non-Revenue Water Components Authorized Usage 3.1 $ 146,000 Apparent Losses 13.1 $ 9,036,000 Real Losses 69.2 $ 3,369,000 Non-Revenue Water Cost: $ 12,551,000 Infrastructure Leakage Index = 69.2/5.3 = 13.1 Non-Revenue Cost Ratio = $12.5/$155 million = 8.09%

IDB NRW Workshop, Belize, th May Features of the Philadelphia Audit Includes over 90 detailed components of usage and losses Costs are evaluated, including: Four levels of Retail Costs for Apparent Loss (Residential, ICI, City Property and Average) Short-term Marginal Production Costs for Real Losses: $ per mg Liability Costs for incidents related to Real Losses: $295,600 total for the year Currently no assessment of long-term costs (Environmental, political, social)

IDB NRW Workshop, Belize, th May Features of the Philadelphia Audit Top-down audit until 2000 Bottom-up started in 2000, including Nightflow leakage measurements in 4 pilot DMAs Revenue Protection Program targeting specific areas of Apparent Loss Balancing Error This is not “unaccounted-for” water! Determined to be 26.3 Mgd after preliminary audit completed (out of 82.3 Mgd of water losses) The Balancing Error is apportioned over the three major leakage components

IDB NRW Workshop, Belize, th May Quantifying Components of Water Use and Loss Water Usage and Water Loss are quantified by either: Measurement OR Estimation Using Estimates does not imply inaccuracy or “unaccounted-for” water Bottom-up approach replaces Estimates with Measurements

IDB NRW Workshop, Belize, th May Quantifying Components of Water Use and Loss Measurement Permanent meters on source supply mains and customer service connections Portable/temporary meters on distribution mains, fire hydrants (fire flow tests), other devices Estimation Inferred - based in part on gathered data to arrive at a reasonable quantity –Example: Illegal Restores (Items III-8, III-9, III-10 in Audit) Subjective - best judgement of the most knowledgeable stakeholder –Example: Unauthorized Fire Hydrant Usage (III-4, III-5, III-6)

IDB NRW Workshop, Belize, th May Master Meter Verification If you don’t measure it, you can’t manage it! Bulk Source Flows should be metered Bulk Flows should be configured to determine water delivery on a daily basis Flow data should be reviewed and reconciled daily Mass Balance Technique compares Raw Water Pumping, Treatment flowrates and delivered flowrates Routine Meter Testing/Verification should occur

IDB NRW Workshop, Belize, th May Authorized Usage Customer Billed Usage: Mgd Billed Unmetered: Mgd (to new wholesale supply unmetered for part of year) Unbilled Authorized Usage: Mgd Largest components include High Pressure Fire System, various fire hydrant usage and system maintenance Cost: $145,984 Total: Mgd

IDB NRW Workshop, Belize, th May Apparent Loss Components Estimated to be 13.1 Mgd Cost: $9 million in lost revenue annually Under-estimating Apparent Losses causes Over- estimation of Real Losses Largest Components Unauthorized Usage: 5.1 Mgd City Properties: 4 Mgd Accounts Lacking Proper Billing: 2.25 Mgd

IDB NRW Workshop, Belize, th May Apparent Loss Idiosyncrasies Customer Metered Usage Vs. Customer Billed Usage A sampling of Customer Billed Usage: 8-inch meters Month # of Accounts Usage (100 cubic feet) July ,312 Aug ,825 Sept ,923 Oct ,278 It’s important to find out what the Billing System does to Metered Data

IDB NRW Workshop, Belize, th May More Apparent Loss Idiosyncrasies Philadelphia has 474,657 Billed Accounts But - - Philadelphia also has 85,898 Non-Billed Accounts! Non-billed Accounts: Typically a temporary status, yet accounts often remain indefinitely Eight categories of NB’s include unoccupied properties, non-payment shutoffs, other Invalid NB Accounts: a primary target of Philadelphia’s Revenue Protection Program

IDB NRW Workshop, Belize, th May Real Loss Components Real Losses: 69.2 Mgd Real Losses Cost: $3.4 million of excess production costs each year Largest Components Customer Service Line Leaks: 33 Mgd Main Leaks: 29 Mgd Unavoidable Annual Real Losses: 5.3 Mgd Four Pilot DMA’s: 0.36 Mgd (> 1% of system miles) Main Breaks - less than 0.1 Mgd, yet these drive our Capital Water Main Replacement Program!

IDB NRW Workshop, Belize, th May Unavoidable Real Losses Four Components of Managing Real Losses Improved response time for leak repair Active Leakage Control: Leak Surveys NightFlow Analysis Improved System Maintenance Replacement Rehabilitation Existing Real Losses Economic Level Pressure Management Philadelphia can gain from Improved Leak Repair response time, particularly for customer service line leaks

IDB NRW Workshop, Belize, th May Four Components of Managing Apparent Losses Unavoidable Apparent Loss Unauthorized Consumption Theft and illegal consumption Data transfer errors between meter and archives Poor customer accountability Data analysis Errors Between archived data and data used for billing/water balance Existing Apparent Losses Economic Level Meter accuracy error Philadelphia can gain from unauthorized use reduction, better none billed account control and Billing System improvements to reduce data analysis error

IDB NRW Workshop, Belize, th May Using the Water Audit and Moving Forward Tracking aggregate performance year-to-year Compare with IWA water audits of other systems Target-setting: currently analyzing means of setting long- term target for loss reduction (setting economic levels of Real and Apparent Losses) Loss control interventions being pursued: Real Losses: pilot DMAs, long-term policy changes regarding leaking customer service lines Apparent Losses: Revenue Protection Program focusing on none billed accounts, city properties. Long-term Billing System structural changes are likely needed. Also, continue to reduce unauthorized usage

IDB NRW Workshop, Belize, th May Contact Information: George Kunkel, Philadelphia Water Department Telephone (215)

Thank You - Any Questions?