California Department of Water Resources: Water Audit Manual

CaliforniaDepartmentofWaterResources:
WaterAuditManual

Preparedfor:
CaliforniaDepartmentofWaterResources

Preparedby:
WaterSystemsOptimization

February2016
DepartmentofWaterResourcesWaterAuditManualFinal
StateofCalifornia
EdmundG.BrownJr.,Governor
CaliforniaNaturalResourcesAgency
JohnLaird,SecretaryforNaturalResources
DepartmentofWaterResources
MarkW.Cowin,Director

CarlTorgersen
ChiefDeputyDirector

WaimanYip
PolicyAdvisor

CathyCrothers EdWilson
ChiefCounsel AssistantDirector
PublicAffairsOffice

WilliamA.Croyle KaseySchimke
DeputyDirector AssistantDirector
StatewideEmergencyManagementandSecurityLegislativeAffairs

JohnPacheco KatherineS.Kishaba
ActingDeputyDirector DeputyDirector
CaliforniaEnergyResourcesScheduling BusinessOperations
AnecitaAgustinez MarkAndersen
GovernmentandCommunityLiaison ActingDeputyDirector
StateWaterProject

GaryB.Bardini
DeputyDirector
IntegratedWaterManagement
CarmelM.BrownandEricNichol
AssistantstotheDeputyDirector
JohnAndrew
AssistantDeputyDirector
ClimateChange
Page1
Thisreportwaspreparedunderthedirectionof

DivisionofStatewideIntegratedWaterManagement
KamyarGuivetchi,Manager

WaterUseandEfficiencyBranch
DianaS.Brooks,Chief

WaterUseEfficiencyProgram
PeterBrostrom,Manager

UrbanWaterUseEfficiencyUnit
VickiLake,Manager

PreparedbyWaterSystemsOptimization
ReinhardSturm..........................................................................................................ChiefOperatingOfficer
KatherineGasner............................................................................DirectorofWaterandEnergyEfficiency
WilliamElman......................................................................................................................ProjectManager

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Preface
This document is intended to provide guidance on preparing a distribution system water loss audit in
accordance with the American Water Works Association (AWWA) Manual 36. The guidance was
preparedspecificallyasa referenceforCaliforniawatersuppliers.Toimprovewaterlossreportingin
California,SB1420(2014)waspassedrequiring watersupplierstosubmitwaterlossauditsaspartof
urbanwatermanagementplanspreparedonceeveryfiveyears.SB555(2015)buildsonSB1420and
requires,beginningin2017,thesubmittalofannualwaterlossreportstotheCaliforniaDepartmentof
WaterResources(DWR)thathavebeenvalidatedfordataaccuracy.Thisguideshouldbehelpful,butis
not intended to be a substitute for the AWWAs Manual 36. Water loss audits are a valuable tool in
identifyingandprioritizingdistributionsystemleaksthatwhenaddressedcanimprovetheefficiencyof
waterproductionanddeliveryforallwatersuppliersbyreducinglosses.
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1 INTRODUCTION
1.1 WhatistheAWWAWaterAudit?
The water audit is an accounting exercise that is conceptually similar to a financial audit. Whereas a
financialaudittracksallsourcesandusesoffundsforanorganization,awateraudittracksallsources
andusesofwaterwithinawatersystemoveraspecifiedperiod.Byansweringthefollowingquestions,
theexercisecanhelprevealandclarifyinefficienciesinwaterdeliveryandrevenuegeneration:
Howmuchwaterenteredthesystem?
Most utility operators recognize
Howmuchwaterwasused? leakageasaformofwaterloss.Less
Forwhatpurposeswaswaterused? widelyappreciatedarewaterlosses
due to metering inaccuracies,
Howmuchwaterwaslost? unauthorized consumption, and
data handling errors, which are
Whattypesofwaterlossoccurred?
collectively termed Apparent
Whatwasthefinancialcostofwaterlosses? Losses, also known as paper
losses.
Whatwasthevolumeofnonrevenuewater?
Whatwasthefinancialcostofnonrevenuewater?
The American Water Works Association (AWWA) Water Audit methodology is consistent with that
developedbytheInternationalWaterAssociation(IWA)WaterLossTaskForce,ofwhichAWWAwasa
participatingmember.Theeffortdrewfromthebestpracticesofvariousapproachestowaterauditing
todevelopauniversal,standardizedmethodologythatcanbeappliedtoanywaterdistributionsystem.
WhataboutUnaccountedforWater?
The concept of unaccountedforwater has been formally abandoned by AWWA as an effective

toolformanagingsystemlossesduetoitsunreliableapplicationandinconsistentdefinition.As
youwillseethroughouttheprocessofcompletingtheAWWAwateraudit,youcanaccountfor
all volumes of water, including water losses. Upon doing so, you can refer to valuable
performanceindicatorsthatmoreaccuratelydescribesystemperformance.Thesearediscussed
indetailinSection6.
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1.2 WhyPerformaWaterAudit?
1.2.1 UtilityMotivations
Awaterauditevaluatesthequalityandefficiencyofoperations.Itcananswerquestionssuchas:
Howmuchwaterfailstogeneraterevenue?Howmuchrevenueislostasaresult?
What are the volumes of the various components of nonrevenue waterhow much is
attributabletoleakage,customermetererror,unbilledconsumption,anddatahandlingerrors?
Howmuchleakagedoesyoursystemexperience,andhowdoesthatcomparetowhatcouldbe
expectedfromyoursystem?Whatisthecostofleakage?
Howaccuratearethemastermetersuponwhichyourwaterproductionandimportvolumesare
based?Whatisthecostofsuchinaccuracy?
AnAWWAauditisanexcellentwaytounderstandyourwaterlosses.Onceyouunderstandyourwater
losses,youcandeviseandimplementstrategiesthatresultinthefollowingimprovementsin:
Water resources managementby reducing water waste, thereby maximizing the value of
existingsourcesandreducingtheneedfornewsources.
Financial performanceby optimizing revenue recovery, improving ratepayer equity, reducing
wastefuloperatingexpenses,andreducingtheneedforcostlycapitalexpansion.
Operational performanceby improving understanding of the distribution system, reducing

servicedisruptions,andgeneratingreliableperformancedata.
The benefits above can improve relations with the publicboth ratepayers and members of the
financial community, such as rating agencies. In sum, a water audit and the management of water
losses can facilitate a broader adoption of more goaloriented, metricdriven, financiallysensible, and
publiclyaccountablepractices.
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1.2.2 StatewideContext
Beyondtheinternalreasonstoperformawateraudit,there
is increased regulatory pressure to manage water While the DWR requires
efficiently,includingthefollowingdevelopments: submissionofannualwateraudits
at five year intervals, it is
InNovember2009,theCaliforniaLegislaturepassed
SB X77, which set a statewide goal of reducing imperative that utilities actually
urban per capita water use by 20% by 2020, and completetheauditonanannual
requires urban water suppliers to set water use basis,forthefollowingreasons:
targets.i To protect against loss of
historical data and the
CaliforniaStateSenateBill1420wassignedintolaw understanding of historical
inSeptember2014,requiringurbanwatersuppliers data.
toincludeawaterlossauditaspartoftheirUrban To build the organizational
WaterManagementPlan.ii capacity to accurately
Inspringof2015,GovernorBrownmandateda25% completethewateraudit.
statewidereductioninurbanwateruse.Toachieve To utilize the annual water
thisreduction,individualwatersuppliershavebeen audit as a basis for
issued conservation mandates of between 8% and managementdecisions.
36%.
Water auditing is the basis for effective water loss control, which can help utilities achieve these
regulatorystandards.
Additionally,efficientmanagementofwaterlossescanhelp
utilitiesmeetthechallengesposedbyincreasingwatercosts
andwaterscarcity.
1.3 HowtoUseThisManual
This manual is intended to help water utilities complete the AWWA Water Audit on an annual basis,
which shall be submitted to the Department of Water Resources every five years along with their
respectiveUrbanWaterManagementPlans.
Themanualismeanttobeclear,logical,andconsistentwithAWWAwaterauditmethodology.
Themanualproceedsasfollows:
Chapters2and3introducetheconceptofthewaterauditandhowtoapproachit.
Chapters 4 and 5 show you how to complete the water audit using the AWWA Water Audit
Software.
Chapter 6 provides information on how to interpret the results of the water audit, including
performanceindicators.
Itisrecommendedthatyouproceedintheorderthatthemanualiswritten,whichfollowsthegeneral
flowofthewaterauditmethodology.
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2 INTRODUCTIONTOTHEWATERAUDITMETHODOLOGY
2.1 TheWaterBalance
Theheartofthewaterauditisthewaterbalance,whichisagraphicalandintuitiverepresentationofthewater
audit.
Figure1presentsasimplifiedversionoftheAWWAwaterbalance.
Forthetimebeing,donotworryaboutthedefinitionsofallthetermsinthewaterbalance,whichwill
bediscussedlater.Fornow,theimportantthingistograspthemethodologybehindthewaterbalance.
Eachboxrepresentsaspecificcategory,orvolume,ofwater.Forexample,WaterSuppliedrepresentsthetotal
volumeofwaterthatenteredthewatersystemoveraparticularauditperiodforusewithinthedistribution
system.Intheexampleshownin
Figure1,WaterSuppliedis100milliongallons(MG).
Bydefinition,eachboxisequalinvolumetoanotherboxorboxesofequalheight.Forexample,Water
Supplied = Authorized Consumption + Water Losses (100 MG = 88 MG + 12 MG). Similarly, Revenue
Water=BilledMeteredConsumption+BilledUnmeteredConsumption(84MG=82MG+2MG).Boxes
neednotbenexttoeachothertomakecomparisons.Forexample,WaterSupplied=RevenueWater+
NonRevenueWater(100MG=84MG+16MG).
Keepinmindthatthesizesoftheboxesinthewaterbalancedonotcorrespondtotheactualvolumes
theyrepresent.
BilledMeteredConsumption
BilledAuthorized 82MG RevenueWater
Consumption
BilledUnmeteredConsumption 84MG
84MG
Authorized 2MG
Consumption
88MG UnbilledMeteredConsumption
UnbilledAuthorized
1MG
Consumption
4MG UnbilledUnmeteredConsumption
Water
3MG
Supplied
100MG UnauthorizedConsumption
0.25MG NonRevenue
Water
ApparentLosses CustomerMeteringInaccuracies 16MG
WaterLosses 4MG 3.50MG
12MG
SystematicDataHandlingErrors
0.25MG
RealLosses
8MG

Page7
Figure11
Theexercisebelowhelpsyouunderstandthemethodologybehindthewaterbalancewithoutyethaving
toconsiderthecomplexitiesofyourownsystem.
Exercise:Basedontheinformationprovidedin Figure2,determinethevolumesforthemissing
categories.
(Hint:WaterLosses=WaterSuppliedAuthorizedConsumption)
Consumption
BilledUnmeteredConsumption ___MG
___MG
Authorized 2MG
Consumption
___MG UnbilledMeteredConsumption
UnbilledAuthorized
0MG
Consumption
___MG UnbilledUnmeteredConsumption
Water
1MG
Supplied
0.50MG NonRevenue
Water
ApparentLosses CustomerMeteringInaccuracies ___MG
WaterLosses ___MG 3MG
___MG
0.50MG
RealLosses
___MG
Figure2
AnswersareprovidedinSection2.4.
1
VolumesforLeakageonTransmissionand/orDistributionMains,LeakageandOverflowsatUtilitysStorage
Tanks,andLeakageonServiceConnections(componentsofRealLosses)arenotpresentedhere,becausethese
determinationsarenotpartoftheAWWAWaterAuditsoftwaremethodology.
Page8
2.1.1 TheProcessofDeduction
As you may have noticed, some volumes are simply sums of other volumes. For instance, Authorized
Consumption is the sum of Billed Authorized Consumption and Unbilled Authorized Consumption.
However,WaterLossesandRealLossesarededuced,orderived,volumesinotherwords,volumesthat
arecalculatedthroughaprocessofelimination:
WaterLossesarecalculatedbysubtractingAuthorizedConsumptionfromWaterSupplied.
RealLossesarecalculatedbysubtractingApparentLossesfromWaterLosses.
SinceWaterLossesandRealLossesarederivedvolumes,theyarenotenteredbytheauditor.
The AWWA software will automatically calculate them based on the information entered in
otherportionsofthewaterbalance.(Thesoftwarewillbediscussedindetailatalaterpoint).
A primary outcome of the water audit is the determination of the volume of Water Losses and Real
Losses.However,sincethesearederivedvolumes,theyareonlyasaccurateastheaccuracyoftheother
volumesinformingthecalculation.
Forexample,thevolumeofWaterLossesandRealLossesinFigure2wererespectivelydeterminedtobe
10MGand6MG.However,ifthevolumeofWaterSuppliedwasnot40MGbutactually42MGdueto
sourcemeterinaccuracy,thentherespectivevolumesofWaterLossesandRealLossesrespectivelybe
wouldbe12MGand8MG.
This is all to say that an accurate determination of Water Losses and Real Losses relies upon the
accuracyoftheothervolumesoftheWaterBalance.
2.2 PerformanceIndicators
As discussed in the previous section, a complete water balance provides the following pieces of
importantinformation:
Volume of Water Losses: The difference between Water Supplied into the system and
AuthorizedConsumption.
Volume of Apparent Losses: Paper losses, the nonphysical losses associated with water
deliveredbutnotmeasuredorrecordedaccurately.
VolumeofRealLosses:Physicalleakage.
VolumeofNonRevenueWater:Waterthatfailstogeneraterevenuetotheutility.
Whilethisinformationiscertainlyhelpful,thewaterbalanceinitselfisoflimitedvalueforcomparing
managementofwaterlossesbetween systemsand overtime.Youmayaskwhyyoucouldnotsimply
calculate percentages for each volume (e.g. Real Losses as percent of Water Supplied) as a means of
evaluating performance. The reason is that percentages can be very misleading as measures of
performance, particularly with respect to evaluating leakage. (See Appendix B: Limits of the Use of
PercentagesasPerformanceIndicatorsforadiscussionofthis.)
Forthisreason,theAWWAwaterauditutilizesspecificperformanceindicatorsthatprovideadditional
meaningtothewaterbalance.TheseperformanceindicatorsarepresentedinSection6.
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2.3 ApplicabilityoftheWaterAudittoWholesaleWaterAgencies
Wholesalersfacedistinctoperatingconditionsfromretailagencies.Forexample,theinstanceofwater
theftexperiencedbyawholesalerispresumablylessthanaretailagency,becauseawholesalerhasonly
a limited number of customer connections and has infrastructure that is less vulnerable to theft.
Nonetheless, the methodology of the water balance, which is based on a simple massbalance
framework,remainsapplicable.
However, the performance indicators referenced in the previous section were designed for retail
distribution systems, and are of limited value when evaluating performance of wholesale supply
systems,inparticular:
Real Losses per Service Connection per Day: This performance indicator is meaningful only in
systemsthatfeatureaserviceconnectiondensityofgreaterthan32connectionspermile,and
thusisdeemednotapplicableinsystemsof32connectionspermileorfewer.Sincewholesale
suppliers typically feature a small number of service connections, it is expected that this
performanceindicatorwouldnotapply.Consequently,RealLossesperServiceConnectionper
DayperPSIwouldalsonotapply.Instead,RealLossesperLengthofMainperDaywouldbethe
moreappropriateindicator.
InfrastructureLeakageIndex:Thisperformanceindicatorisbasedonacalculatedallowanceof
leakage designed for retail distribution systems. It is not a useful metric for evaluating
wholesalewatersystems.
2.4 AnswerstotheIntroductoryExercise
Consumption
BilledUnmeteredConsumption 29MG
29MG
Authorized 2MG
Consumption
30MG UnbilledMeteredConsumption
UnbilledAuthorized
0MG
Consumption
1MG UnbilledUnmeteredConsumption
Water
1MG
Supplied
0.50MG NonRevenue
Water
ApparentLosses CustomerMeteringInaccuracies 11MG
WaterLosses 4MG 3MG
10MG
0.50MG
RealLosses
6MG

Figure3
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3 HOWTOAPPROACHTHEWATERAUDIT
While the water audit is at its basic level a formulaic procedure, the quality of the water audit and
thereforeitsusefulnessisentirelydependentonthequalityofdata.Anybodycanfilloutawateraudit,
but to complete a water audit that is meaningful and useful typically requires particular habits. The
followingrecommendationsarevaluableforthecompilationofahighqualityaudit.
3.1 Responsibility
Itisadvisedthattherebeadedicatedpersonwhoisresponsibleforcompletionofthewateraudit.
Thispersonshouldbesomeonewhohasageneralunderstandingofhowtheutilityoperatesand,most
importantly, is able to work with the appropriate people from all relevant departments to gather the
necessaryinformation.ThispersonshouldhaveatleastbasicproficiencywithMicrosoftExcelanddata
management, since the water audit will be completed using Excelbased software and requires
compilationofdata.
Whileitisrecommendedthatonepersonberesponsibleforthecompletionofthewateraudit,itisalso
advisedthatallpiecesofsubmittedinformationbesubjecttoscrutinyfrommultiplesetsofeyes.This
will ensure that information is complete, relevant, and accurate. Additionally, such sharing of
informationwilloftenraiseimportantquestionsthatmayhavebeenoverlookedbyanyoneperson.Itis
recommendedthattheutilitysetupaninternalwateraudittaskforceorworkinggroupthatincludes
knowledgeablestafffromtherelevantdepartmentsresponsibleforprovidingauditdata.
3.2 Transparency
By definition, an audit sheds light on organizational practices. As such, utilities will often discover
aspects of their operations that had previously gone unnoticed. Sometimes these findings will be
discouraging. Nonetheless, the completion of an accurate and meaningful audit requires an
organizationalcommitmenttoacultureoftransparency.Withoutsuchacommitment,thequalityof
dataisquestionableandtheaccuracyoftheauditsuffers.Thus,itisimportantthattheutilityfacilitate
anopenenvironmentwheredataandoperationscanbediscussedcriticallyandcandidly.
3.3 ContinuousImprovement
Water auditing is not a onetime event, but a continual process. The important thing is not that the
waterauditbeperfectnoauditeverwillbebutthattheprocessofperformingtheauditbetreated
as an opportunity for continuous organizational improvement. As mentioned previously, utilities may
encounterpreviouslyunknownissuesorrunintothelimitsoftheirownknowledgeofthesystem.For
instance, utilities may ask themselves questions like How do we know how accurate our customer
metersareiftheyhaventbeenthoroughlytestedinthelast10years?orWhatmastermetertesting
proceduresdoesourwholesalerfollow?
Thewaterauditshouldnotbeseenasaonetimeexercisetofinderrorsandfaults,butratherasan
importantmeansbywhichautilitymaycontinuallyassessandimproveuponcurrentpractices.
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3.4 Skepticism
Inordertoachievethehighestpossibledegreeofaccuracyoftheaudit,thoseinvolvedinitscompletion
shouldaskthefollowingquestionswithrespecttotheinformationthatisgathered:
Isitrelevant/representative?Doestheinformationreflectwhatisactuallybeingrequested?For
instance, when calculating Billed Metered Consumption, a utility should make sure to exclude
consumptionofrecycledwaterbycustomers,sincerecycledwaterdoesnotbelonginapotable
wateraudit.
Is it complete? Does the data fully answer what is being requested? For instance, does a
customerconsumptionreportincludeconsumptionbyallaccounts,evenifthoseaccountswere
markedasinactive?
Is it accurate/reliable? How trustworthy is the data, and how do you know? For instance, a
utility may calculate the volume of water entering the system based on an input meter (also
knownasasourcemeterormastermeter)withknownaccuracyissues.Ifthatisthecase,the
datashouldbecorrectedforknownerrororqualified.Evenifautilityisnotabletocorrectfor
specific volumes that have known accuracy issues, it is important that such issues be
documentedfordatavalidityevaluationandguidanceoffutureimprovementefforts.
3.5 Pragmatism
Whiledataaccuracyisessentialinthecompletionofanyaudit,youshouldbepragmaticabouthowyou
focusyourtime.Theuseofstafftimeshouldbeprioritizedinaccordancewiththepotentialimpactof
inaccuracyforaparticularvolumeorcategory.Inotherwords,inaccuraciesforthelargervolumesof
watersuchasWaterSuppliedandBilledAuthorizedConsumptionwillhaveafargreaterimpactthan
inaccuraciesforpresumablysmallervolumessuchasUnauthorizedConsumption(watertheft).Here
areafewordinaryexamplesofpragmatismatwork:
Given limited staff resources, it would be of greater value to spend time evaluating master
meteraccuracythantotrytoperfectlyaccountforconsumptionbytheFireDepartment,since
the former volume will have a potentially large impact on the water balance, while the latter
presumablywillnot.
Given limited staff resources, it would probably be of greater value to spend time conducting
customer meter tests for the sake of calculating customer meter error than to deploy staff in
searchofwatertheft,sincetheformervolumewillhaveapotentiallylargeimpactonthewater
balance,whilethelatterpresumablywillnotinmostutilityenvironments.
3.6 Time
Lastly,awaterauditcantaketime.Eventhoughtheauditrequiresonlyalimitednumberoffieldsto
be completed, the process of compiling, validating, and analyzing information can take a significant
amountoftime,particularlyincomplexwatersystems.Forthisreason,itisadvisedthatyoustartearly
andtackletheauditinmanageableparts.
Byfollowingtheserecommendedpractices,utilitieswillbeabletogetmoreoutofperformingthewater
audit.
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4 OVERVIEWOFAWWAWATERAUDITSOFTWARE
4.1 TheAWWAWaterAuditSoftware
California Senate Bill No. 1420 (SB 1420) requires water utilities that submit Urban Water
Management Plans to calculate annual system water losses using the water audit methodology
developedbytheAmericanWaterWorksAssociation(AWWA).iiiSB1420requiresthatutilitiessubmit
these audits every five years as part of their respective Urban Water
ManagementPlans.
To facilitate userfriendly and consistent water auditing practices, AWWA To access the Free
has developed the AWWA Free Water Audit Software, which is based on AWWA Water Audit
the principles of the AWWA M36 Water Audit methodology. Per iv Software, you must
Department of Water Resources guidelines, utilities should use this register on AWWAs
software to complete the water audit. The software is in the form of a website:
MicrosoftExcelworkbook.Atthetimeofwriting,themostcurrentversion www.awwa.org
v
of the software is Version 5.0, which is available on AWWAs website.
BecausetheinstructionsandgraphicsinthisguidearebasedonVersion
5.0,itisrecommendedthatutilitiesalsousethisversion.Atthetimeofwriting,versions5.0andhigher
willbeacceptedbyDWRforsubmissionpurposes.
UponopeningtheAWWAFreeWaterAuditSoftwareExcelspreadsheet,theuserwillnoticethatthere
are 12 worksheets. Dont be overwhelmedonly three of these worksheets require data entry, and
twoofthosethreerequirelittleinformation(thesheetstitledInstructionsandComments).The
other nine sheets serve a variety of functions, including presentation of performance indicators, the
automaticallypopulatedwaterbalance,andhelpfulbackgroundinformationanddefinitions.
Sections4and5provideaguidetocompletingthesheetsthatrequiredataentry.Othersheetswillbe
discussedlaterinthismanual.
4.2 InstructionsWorksheet
The worksheet titled Instructions provides a general orientation to the software. This is also where
basic audit information should be entered. Figure 4 shows the worksheet filled out for a hypothetical
water agency, the Gold Country Water District. This example agency will be used throughout this
guideforillustrativepurposes.
Cellswithinthesoftwarearecolorcodedinthefollowingmanner:
Avaluetobeenteredbytheuser

Acalculatedvaluebasedondatafromothercells

Containsarecommendeddefaultvalue
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Name of City/Utility: It is important that you enter the same name that is listed in the DWR
1
UrbanWaterManagementPlanonlinesubmittaltool.ThiswillallowDWRtoproperlyaggregate
data.2
Year,StartDate,EndDate:Entertheappropriatewaterauditreportingperiod(auditperiod)
2 here.Intheexample,theagencyhasselectedFinancialYear2015astheauditperiod.
Volume Reporting Units: This is where you should select the units that your agency will be
3 reportinginwithrespecttovolumesofwater.Intheexample,theagencyhasselectedmillion
gallonsasthevolumetricreportingunit.
PWSID/OtherID:Atthetimeofwriting,DWRisintheprocessofdevelopinganidentification
4 system.
3
4

Figure4
2
http://www.water.ca.gov/urbanwatermanagement/dost/
Page14
4.3 ReportingWorksheet
Thisworksheetiswhereyoushouldcompletethewateraudit.Theworksheetfollowsthegeneralflow
Rememberthatthewaterauditpertainsexclusivelytothepotableportionofawatersystem.
Therefore,nonpotablewatervolumessuchasrawwaterandrecycledwatermustbe
excluded.Toproduceaccurateresults,thisneedstobeconsistentlyfollowedforallstepsofthe
wateraudit,includingdeterminationofbilledcustomervolumes.
ofthewaterbalancemethodology.
TherearethreetypesofentriesintheReportingWorksheet:
Entriesthatrepresentorimpactvolumesofwater.Thesearediscussedsequentially,beginning
withSection5.TheyareindicatedinFigure5bytheredbox.
EntriesthatpertaintoDataValidityScoring.TheconceptofDataValidityScoringisintroduced
immediatelybelowandisremarkeduponinfurtherdetailwithrespecttoparticularvolumesof
waterintheensuingsections.DataValidityentriesareindicatedinFigure5bythegreenbox.
Buttons that redirect you to the Comments Worksheet, where you can add comments with
respecttospecificpiecesofdatathatyouhaveentered.Commentscantakenoteofsourcesof
+
dataandmethodologytoensureconsistencyinfutureaudits.Youcanclickonthe tomake
acomment,asindicatedbytheorangeboxinFigure5.

Figure5
4.3.1 DataValidityGrading:AnIntroduction
TheAWWAFreeWaterAuditSoftwarehelpsyouevaluatethevalidityoftheauditbyallowingyouto
grade each component of the water balance. The data validity scoring system describes the level of
accuracyandreliabilityofeachdataentrycontributingtotheaudit.
A detailed guide on how to grade each component is provided in the worksheet titled Grading
Matrix, and you should review this worksheet before assigning grades. Additionally, you can hover
overindividualdatavaliditycellstorevealashorthandguidetodatavaliditygradingfortherespective
category. While the Grading Matrix is very helpful, it cannot account for all of the particularities of
individual California water utilities. As such, you will need to use a degree of discretion in assigning
grades.Rememberthatthepurposeofthegradingsystemisforutilitiestobeabletoreflectupontheir
own practices in order to identify opportunities for improvement. Thus, you should approach the data
validityevaluationwithacriticalmind.
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Toselectthecorrectdatagradingforeachinput,determinethehighestgradewheretheutilitymeets
orexceedsallcriteriaforthatgradeandallgradesbelowit.
5 COMPLETINGTHEWATERAUDIT
5.1 WaterSupplied
ThedeterminationofWaterSuppliedisthefirststepandthefoundationofthewaterbalance.Because
Water Supplied is the largest volume in the water balance, error can have a large impact. Thus, it is
Water Supplied: The volume of treated and pressurized water input to the retail water
distributionsystem.viMathematically:
WaterSupplied=SystemInputVolumeWaterExported
criticalthatyoubeasthoroughaspossibleindeterminingthisvolume.
ItisadvisedthatyoucollectWaterSupplieddatafrommetersthatarelocatedimmediatelyatorprior
toentryintothedistributionsystem.Forexample,iffacedwiththechoiceofusingflowdatafromeither
awatertreatmentplantinfluentoreffluentmeter,theeffluentmeterwouldbepreferable(insofarasit
is in good working order, because the effluent meter captures only the water that enters the
distributionsystemwhereastheinfluentmetermayalsocapturewaterusedforoperationalpurposesat
thetreatmentplant,whichisupstreamofthedistributionsystem).
An excerpt of the water balance is presented in Figure 6 below to illustrate the relationship between
WaterSuppliedandotherkeyvolumes.WaterSuppliedishighlighted.
WaterExported
(correctedforknownerrors)
VolumefromOwn
Sources
(correctedfor
knownerrors)
SystemInput
Volume
WaterSupplied
WaterImported
(correctedfor
knownerrors)
Figure6
Page16
Volume from Own Sources: The volume of water withdrawn from water resources (rivers, lakes,
wells,etc.)controlledbythewaterutilityandthentreatedforpotablewaterdistribution.vii
WaterImported:Bulkwatertypicallypurchasedfromaneighboringwater utilityorregionalwater
authority, which is metered at the custody transfer point of interconnection between the two
utilities. vii Also known as import, purchased or wholesale water. For California utilities, this
couldbewaterfromtheMetropolitanWaterDistrict(MWD),theStateWaterProject(SWP),the
CentralValleyProject(CVP),oranynumberofotherwholesalers.
SystemInputVolume:Thevolumeofwaterthatisintroducedtothewaterdistributionsystemover
theauditperiod.AccordingtotheAWWAM36Manual,itisthevolumeofwaterinputtothatpart
ofthewatersupplysystemtowhichthewaterbalancerelates.viiiMathematically:
SystemInputVolume=VolumefromOwnSources(incl.netchangesinstorage)+WaterImported
WaterExported:Bulkwatersoldtoneighboringwatersystemsthatexistoutsidetheservicearea.vii
Figure7showstheGoldCountryWaterDistrictwatersystem.GCWDspotablewatercomesfromtwo
wells, surface water, and treated imported water. Well water and surface water go to the water
treatmentplantpriortoenteringthedistributionnetwork.Flowvolumesaremeteredaseffluentfrom
the treatment plant. Imported water enters the distribution network directly and is metered at the
interconnectionbetweentheGCWDsystemandtheneighboringsystem.GCWDexportssomewaterto
aneighboringagency,whichismeteredatthesysteminterconnection.
As such, Volume from Own Sources consists of water from wells and surface water, which is
cumulatively metered as treated effluent at the water treatment plant. Water Imported consists of
imported water. Water Exported consists of export water to the neighboring agency. GCWDs auditor
collecteddatafortheauditperiodfromthethreerelevantmeters,indicatedbytheletterM.
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Volumefromownsources WaterImported

Well1 Well2 Surface Imported
Water Water

WaterTreatmentPlant
M

M

StorageReservoir

PotableDistributionNetwork

SystemInputVolume

M M
M
Water Water
Metering Supplied Exported
Figure7
YoumayturntoanumberofdifferentsourcesforWaterSupplieddata.Forexample,yourutilitymay
haveinformationfromanynumberofthefollowingsources:
Monthlywaterpurchasesonbillsfromwholesalers
Monthlygroundwaterextractionvolumesonstatementsfromgroundwaterregulatingagencies
Manualmeterreadings
SCADAmeterreadings
Ultimately,youwillneedtodeterminewhichdatasourcesmostaccuratelyreflecttheactualvolumeof
waterenteringthedistributionsystemandleavingasexports.Thisstepcanbechallenging,andoften
requiresthecollaborationofanumberofstafftodevisethebestapproach.However,athorough
approachwillpayoffintheaccuracyoftheaudit.
Page18
5.1.1 AccountingforChangesinStorage
Bestpracticeistoaccountforchangesinreservoirstoragelevelsoverthecourseoftheauditperiod.ixIf
thevolumeofstoredwaterincreasedbetweenthefirstandlastdayoftheauditperiod,thenthechange
instoragerepresentsawithdrawalofwaterfromthedistributionsystem.Inotherwords,theincreasein
storage represents water that was supplied into the system but then temporarily withheld from
customeruse.Inthiscase,theabsolutevalueofthevolumetricchangeshouldbesubtractedfromthe
calculationofWaterSupplied.Theinverseistrue:ifstoredvolumedecreasedbetweenthefirstandlast
dayoftheauditperiod,thenthechangerepresentsanadditionalsupplyofwatertodistributionsystem,
andtheabsolutevalueofthevolumetricchangeshouldbeaddedtothecalculationofWaterSupplied.
The AWWA Free Water Audit Software does not provide a

separate field for Changes in Storage. As such, Changes in Changes in Storage should
Storage must be applied to either Volume from Own Sources only be accounted for if
or Water Imported, depending on the setup of the system. ix storageislocateddownstream
For GCWD, storage was calculated to have decreased by ofthemeteringpointsthatare
18.850MGbetweenthefirstandlastdaysoftheauditperiod relieduponforWaterSupplied
based on reservoir levels. Therefore, the auditor should add data. If storage is upstream of
18.850 MG to Volume from Own Sources, since it represents those meters, then changes in
anadditionalsupplytothedistributionsystem.Itisimportant storage will already be
tomakeanoteofthespecificvolumeofChangesinStorage accounted for by the meters
that was applied to Volume from Own Sources, using the and will not need to be
CommentsfeatureintheAWWAsoftware. accountedforseparately.
Page19
5.1.2 Compiling&EnteringWaterSuppliedVolumes
The auditor has compiled the following data for the audit
period: Some utilities keep monthly
records of changes in
GCWDWaterSuppliedInputsExample storage, in which case the
Input Volume(MG) storage changes over the
EffluentfromWaterTreatmentPlant 20,714.690 courseoftheyearlongaudit
DecreaseinStorage 18.850 period can be added
ImportedWater 17,975.104 together.Makesurethat+
ExportstoNeighborAgency 385.586 and signs are properly
Table1 takenintoaccount.
Atthispoint,donottakemeteringinaccuraciesordataerrorsintoaccountthesewillbecoveredin
thefollowingsection.Fromthedata,theauditorhascalculatedthefollowingvolumes:
Volumefromownsources =20,714.690+18.850=20,733.540MG
Waterimported =17,975.104MG
Waterexported =385.586MG
Figure8showstheReportingWorksheetgiventheinformationstatedintheexample.

Figure8
Everywatersystemisunique,soyouwillhavetoconsiderthedistinctsetupofyourownsystemwhen
determining how to appropriately calculate Water Supplied. Nonetheless, this checklist can help you
makesurethatWaterSuppliedisaccuratelycalculated:
Didyouaccountforallsourcesofwater?
Didyouensurethatnowaterwasmistakenlydoublecounted?
Didyouaccountforallexportsofwater?
Didyoumakesuretoexcludeallnonpotablewater?
Didyouproperlyincorporatechangesinstorage,ifapplicable?
Page20
5.1.3 MasterMeterandSupplyErrorAdjustments
Thisiswhereyoushouldaccountforanyknownerrorsinmastermeters.Sourcesoferrorincludemeter
inaccuracy(underoroverregistration)anddatagapscausedbyoutagesofthemeterinstrumentation.
Because every utility has a unique combination of master metering setup, testing and calibration
procedures and data management processes, there is no uniform method for calculating master
meter and supply error. You will have to use the available information and your best judgment. For
example,GCWDhasmadethefollowingadjustments,basedontheavailableinformation:
The effluent meter at the water treatment plant underregistered by an average of 1.2% in a
test performed during the audit period. Using this percent error, the auditor determined the
appropriatevolumetoenterintoMasterMeterSupplyandErrorAdjustments(seethesidebar
CalculatingMeterErrorVolumes).
Theimportedwatermeterpassedinstrumentationcalibrationtestsontwoseparateoccasions,
butstaffisnotawareofanyvolumetricorcomparativeteststhathavebeenperformed(seethe
note under the Data Validity Grading portion of this section for an explanation of the
difference between instrumentation calibration and meter testing). In the absence of specific
quantitative information, the auditor did not assign any volumes to Master Meter Supply and
Error Adjustments, but took these uncertainties into account when assigning a data validity
grading.
Theexportmeteroverregisteredby0.5%inthemostrecenttest.Usingthispercenterror,the
auditor determined the appropriate volume to enter into Master Meter Supply and Error
Adjustments.
Because the AWWA Free Water Audit

Softwareincludesasingledatafieldfor CalculatingMeterErrorVolumes
the error associated with each
componentofWaterSupplied(Volume Givenaknownmeterpercenterror,usetheformula
from Own Sources, Water Imported, belowtocalculatethemetererrorvolume:
Water Exported), it is recommended

that the auditor calculate the error
adjustments on a separate
Where istheoriginal,uncorrectedmetered
spreadsheet, as shown in Table 2 for
volume
GCWD below. This is especially true
when data from multiple meters must Where isthetestedpercentaccuracyofthemeter
be added together to determine a (e.g.98.8%means98.8%accurate).x
particular component of Water
Supplied.
Page21
GCWDMasterMeterandSupplyErrorAdjustmentsExample
Uncorrected Master MasterMeterErrorand
MeteredVolume Meter SupplyAdjustment
(MG) Accuracy Volume(MG)
a EffluentfromTreatmentPlant 20,714.690 98.8% 251.595
b DecreaseinStorage 18.850 NA NA
c ImportedWater 17,975.104 NA NA
d ExportstoNeighborAgency 385.586 100.5% 1.918
A=a+b VolumefromOwnSources 20,733.540 251.595
B=c WaterImported 17,975.104 0.000
C=d WaterExported 385.586 1.918
Table2
IntheAWWAsoftware,apositivevalueorpercentageenteredintheMasterMeterandSupplyError
Adjustmentssectionindicatesoverregistration,whileanegativevalueorpercentageindicatesunder
registration. Be careful not to overlook this key aspect of the software methodologyan oversight
couldhavesignificantconsequencesontheaccuracyoftheaudit.Intheexample,theauditorcalculated
themetererroradjustmentvolumesonaseparatespreadsheettoensurethatthesoftwarewouldbe
filledoutproperly.
The auditor then filled in the AWWA Free Water Audit Software accordingly, as shown in Figure 9.
Because the auditor calculated specific error volumesnot percentagesthe Value button was
selected,ascircledinred.

Figure9
Page22
5.1.4 DataValidityGrading
ItisrecommendedthatyouthoroughlyreviewtheGradingMatrixincludedintheAWWAFreeWater
Audit Software when assessing data validity associated with the various volumes making up Water
Supplied.Belowaresomeofthekeyconsiderations:
Aresourcesofwatermetered?
If so, are master meters tested and calibrated? How often? When was the nearest test and/or
calibrationwithrespecttotheauditperiod?
Howaccuratearethemastermeters(specifically,inpercenterrorterms)?
Werecomparativeorvolumetrictestsconducted,orsolelycalibrationofthemeters?
InwhatformataretheproductionvolumesassociatedwithVolumefromOwnSourceslogged?By
handorelectronically?
Howfrequentlyisproductiondatareviewedand,ifnecessary,corrected?
Howarechangesinstoragetakenintoaccount,ifapplicable?Inwhatformataretheylogged,and
howfrequently?
Isthereacomputerizedsystem(e.g.SCADA)thatautomaticallybalancesflowsfromallsourcesand
storage?Isthecomputerizedsystemcalibratedwithmastermeterstoensureminimaldatatransfer
error?
There is a notable difference between accuracy testing of the primary metering device and
calibration of related instrumentation (e.g. a pressure differential cell). A meter test compares
the test meterreadsto eitherareference meterorafixedvolume,whileinstrument calibration
ensuresaccuratecommunicationoftheelectronicsofcertaintypesofmeters.Whilecalibrationof
instrumentationiscritical,itdoesnotguaranteemeteraccuracyinitself.xi
Page23
5.2 AuthorizedConsumption
The determination of the volume of Authorized Consumption is the second major component of the
Authorized Consumption: The volume of metered and/or unmetered water taken by

registeredcustomers,thewatersupplier,andotherswhoareauthorizedtodoso.xii
AWWAwaterbalance.AccordingtotheAWWAM36manual.
Figure 10 below shows the position of Authorized Consumption and its subcomponents within the
simplifiedwaterbalance.3
BilledAuthorized
RevenueWater
Consumption
BilledUnmeteredConsumption
Authorized
Consumption
UnbilledMeteredConsumption
UnbilledAuthorized
Consumption
UnbilledUnmeteredConsumption
Water
Supplied
UnauthorizedConsumption
NonRevenue
Water
ApparentLosses CustomerMeteringInaccuracies
WaterLosses
RealLosses
Figure10
As shown above, Authorized Consumption consists of Billed Authorized Consumption and Unbilled
AuthorizedConsumption,whichcanbefurtherdividedintothefollowingcomponents:
BilledMeteredConsumption:Consumptionthatgeneratesrevenue,thevolumeofwhichisdetermined
byawatermeter.
BilledUnmeteredConsumption:Consumptionthatgeneratesrevenue,thevolumeofwhichis
determinedbyestimationorisnotknown.
UnbilledMeteredConsumption:Consumptionthatdoesnotgeneraterevenue,thevolumeofwhichis
determinedawatermeter.
3
Thismanualusesthetermsimplifiedwaterbalancetorefertotheportionofthewaterbalancethatbegins
withWaterSupplied(therebyexcludingthepresentationofWaterExported).
Page24
UnbilledUnmeteredConsumption:Consumptionthatdoesnotgeneraterevenue,thevolumeofwhich
isdeterminedbyestimationorisnotknown.xiii
It is important to accurately distinguish amongst these categories because they directly inform your
utilitys understanding of revenue and nonrevenue water. Additionally, the process of categorization
canleadtovaluableinsightsastohowtoimprovethereliabilityofdata.
This guide proceeds by describing how to calculate the volumes associated with the four types of
Authorized Consumption and provides examples to clarify how particular uses of water should be
categorized.
5.2.1 BilledMeteredConsumption
It is best practice to keep
Billed metered consumption consists of all uses that generate track of the particular
revenue and are metered. In a utility where most of or all parameters and procedures
customers are metered, consumption by retail customers will thatarefollowedtogenerate
comprise the majority of billed metered consumption, so it is data, so that you can
imperative that you be thorough in the determination of this replicatetheprocessyearto
volume. Any errors introduced at this step will have a relatively year.
large impact on the accuracy of the water balance and the
calculationofreallosses.
Workwithyourbillingdepartmenttogenerateacustomerconsumptionreportthatincludesallclasses
of potable customers that provide revenue to the utility. It is important to include temporary meters
thatgeneraterevenue,suchasmetersusedforconstructionsites.Makesurethattheparametersof
the report be established such that the consumption data best reflects consumption as it actually
occurredwithintheauditperiod,sothatyourcomparisonofwaterinfromsourcemeterstowater
out to customers makes sense. Although every utility conducts billing in a unique manner, here are
someguidelinesthatmostutilitieswillfindapplicable:
1. If your billing system utilizes Advanced Metering Do not confuse exports to

Infrastructure (AMI), you probably have access to actual other agencies with billed
daily consumption data, which allows you to very metered consumption
accurately capture consumption over the audit period. even if such volumes are
Thisisideal. billed and metered! Exports
2. If your billing system does not utilize AMIif your utility should be treated as Water
uses either Automatic Meter Reading or manual Exported in the
readingsthen run a consumption report in which the determination of Water
meterreaddatefallswithintheauditperiod. Supplied. Some customer
billing systems include
3. Ifyourbillingsystemdoesnotallowyoutorunareportby
meterreaddate,thenrunareportinwhich thebilldate records of sales to outside
fallswithintheauditperiod.Forthepurposeofcapturing agenciesifso,makesureto
consumption as it actually occurred in the audit period, exclude them from the
this method is less accurate than using meter read date calculation of Authorized
becausebillsaresentoutlaterthanthemeterreaddate Consumption.
Page25
andlessaccuratelyreflecttheactualtimingofcustomerconsumption.
Thefollowingcheckscanhelpensurethattheconsumptionreportaccuratelyreflectstheparametersof
Doesthedataincludeallbilledmeteredcustomersandexcludeunbilledmeteredcustomers
suchasnonpayingmunicipalaccounts(oratleastidentifythoseaccountssothatyoumay
accountforthemseparately)?
Didyoumakesurethatanysalestooutsideagencieswereexcluded(oratleastidentifiedso
thatyoumayaccountforthemseparately)?
Didyoumakesurethatanynonpotablewatersaleswereexcluded(oratleastidentifiedso
thatyoumayexcludethemyourself)?
Areyousurethattheconsumptiondatareflectsactualvolumetricuse,andnotchangesthat
mayhavebeenmadetobilledconsumptionforthesolepurposeofmakingfinancial
adjustmentstothebill?
thewateraudit:
5.2.1.1 ConsistencyofUnits
Makesurethatvolumetricunitswithin thebilling databaseareconsistent.Someutilities havemeters

that are read in different unitssome may be read in CCF (hundred cubic feet), while others may be
readinKGAL(thousandgallons).Ifthebillingdatabasefeaturesmorethanonevolumetricunit,make
suretomakethenecessaryconversionstostandardizethedata.
5.2.1.2 CorrectforMisalignmentbetweenBillingPeriodandAuditPeriod
IfyouusedOption2or3abovetogenerateaconsumptionreport,itisbestpracticetocorrectforthe
misalignmentbetweenthemeterreading/billingcyclesandtheauditperiod.Thisisapplicablewhen
meterreading/billingcyclesdonotperfectlycoincidewiththeauditperiod.
The following example introduces the concept of correcting for

misalignmentinasimplesituationwherecustomermetersarereadona Correcting for billing
singledayeverymonth.However,theexercisecanbecomequitecomplex period misalignment
withutilitiesthathaveahighnumberofmeterreading/billingcycles.The using the prorating
examplebelowdoesnotshowthespecificcalculationsthatwereperformed method is especially
tomakethecorrectionsformisalignment.Thosecalculationsarepresented important in utilities
inAppendixA:CorrectingforMisalignmentbetweenMeterReading/Billing that bill at less
CyclesandAuditPeriod frequent intervals,
suchasonabimonthly
GoldCountryWaterDistrictreadscustomermetersonthesamedayevery
orquarterlybasis.
month. The GCWD auditor compiled billed metered sales data relevant to
the audit period (7/1/14 6/30/15), as detailed in Table 3 below, plus an
Page26
extra meter read on either side of the audit period in order to correct for misalignment. This data is
shown in the column titled Customer Sales. The final column of Table 3 shows the volume of sales
aftercorrectingformisalignment.
GCWDCorrectingforBillingPeriodMisalignmentExample
CustomerSales
CustomerSales
ReadDate Correctedfor
(MG)
Misalignment(MG)
6/10/2014 3,104.146 0.000
7/10/2014 3,471.978 1,157.326
8/10/2014 3,439.905 3,439.905
9/10/2014 3,068.071 3,068.071
10/8/2014 2,865.882 2,865.882
11/10/2014 2,460.604 2,460.604
12/9/2014 2,422.748 2,422.748
1/10/2015 2,278.897 2,278.897
2/10/2015 2,233.471 2,233.471
3/11/2015 2,278.897 2,278.897
4/12/2015 2,877.013 2,877.013
5/10/2015 2,952.724 2,952.724
6/10/2015 3,202.570 3,202.570
7/10/2015 4,169.549 2,779.699
Total 33,642.876 34,017.808
Table3
TheGCWDauditorfilledouttheReportingWorksheetaccordingly:
AUTHORIZED CONSUMPTION
Billed metered: + ? 8 34,017.808 MG/Yr
The example above shows the value of correcting for misalignment. Without doing so, billed
metered consumption would have been 33,642.876 MG, which is 1.1% less than the corrected
volume.Ifleftuncorrected,this1.1%differencewouldhavebeencarriedthroughtheremaining
steps of the water balance and been accounted for as real losses. The resulting volume of real
losseswouldhavebeencalculatedtobe3,244MGinsteadof2,858MGoverstatedby13.5%.In
other words, make sure to get this step right, because it will impact your understanding of
water losses, real losses, revenue and nonrevenue water, and the resulting performance
metricsforyoursystem.
Page27
5.2.1.3 DataValidityGrading
Itisrecommendedthatyouthoroughlyreviewthe GradingMatrixincludedintheAWWA FreeWater

Audit Software when assessing data validity associated with billed metered consumption. Below are
someofthekeyconsiderations:
Arebillingrecordsmaintainedonpaperorelectronically?
Whatisthemeterreadsuccessrate?
Whatisthefrequencyandscaleofestimates?
Arebillingrecordsaudited,bywhom,andatwhatfrequency?
Whatisthefrequencyandscaleofmetertesting?
WhatportionofmetersarereadusingAMIorAMR?
Whatfactorsinformthedecisiontoreplaceacustomermeter?
Page28
5.2.2 BilledUnmeteredConsumption
Billed unmetered consumption consists of consumption that generates revenue but is not metered.
These accounts are often referred to as flat rate or flat fee customers, since they are assessed a
fixedchargebasedonanestimatedvolumeofuse.
There are a number of means by which consumption can be estimated, such as using a sample of
metered accounts similar in characteristics (e.g. customer category, meter size) and extrapolating
consumption habits from those accounts to the nonmetered population. However, even such an
approach contributes a great deal of uncertainty to the determination of consumption volumes.
Because of the difficulty in accurately determining consumption through estimation, it is highly
recommendedthatallcustomersbeproperlymetered,read,andarchived.xiv
In the example of GCWD, all customers are metered, with the exception of some unmetered
condominiumdevelopments.Theseunmeteredaccountsarebilledanassumedmonthlyusageof8CCF
perhousingunit,whichisbasedonanapproximateaveragemonthlyconsumptionformeteredmulti
family housing units. These accounts are included in the customer billing database and uniquely
identified as flat fee. The total audit period consumption for these accounts was 29.872 MG. When
calculatingbilledmeteredauthorizedconsumption,theauditormadesuretoexcludethoseaccounts.
TheGCWDauditorfilledouttheReportingWorksheetaccordingly:
Billed unmetered: + ? 7 29.872 MG/Yr

AuditSoftwarewhenassessingdatavalidityassociatedwithbilledunmeteredconsumption.Beloware
Whatportionofbilledcustomersinthesystemareunmetered?
Whatisthedegreeofthoroughnesswithwhichconsumptionvolumesareestimated?
RevenueandNonRevenueWater
Youvejustcompletedthenecessaryinformationtobeabletodetermineanimportantmetric:
the volume of revenue (and nonrevenue) water. As shown in the water balance in Figure 10,
revenue water is simply the volume of Billed Authorized Consumption (the sum of billed
metered consumption and billed unmetered consumption). Nonrevenue water can then be
calculated by subtracting Billed Authorized Consumption from Water Supplied. In the AWWA
Software,refertothelinetitledNonRevenueWaterorgotothesheettitledWaterBalance
toseethecalculatedvolumesofrevenueandnonrevenuewaterforyoursystem.
InthecaseofGCWD,revenuewateris34,017.808+29.872=34,047.680MG,andnonrevenue
wateris38,960.23934,047.680=4,528.892MG.
Page29
5.2.3 UnbilledMeteredConsumption
There may be accounts located
Unbilled metered consumption includes all uses that are within the billing database that
metered but do not generate revenue for the utility. In do not generate revenue, such
California, such use is typically associated with metered as metered operational uses by
operational uses by the water utility, such as flushing the water utility. Such
programs that utilize temporary meters to track usage. consumption should be
Unbilled metered uses may be tracked in the billing classified as unbilled metered
system, on operational records, or a combination of the consumption. Make sure to
two, depending on utility practices (see sidebar). Keep in exclude such uses in the
mindthatconsumptionvolumesthatarecalculatedrather determinationofbilledmetered
than meteredsuch as the filling of a fixedvolume water consumption.
truckshould be categorized as unbilled unmetered
consumption,asdescribedinSection5.2.4.
TheauditorforGCWDhasidentifiedthefollowingunbilledmeteredusesandconsumptionvolumesfor
theauditperiod,andperformedtheappropriatelagtimecorrection:
GCWDUnbilledUnmeteredUse
FY15ProRated
Consumption
TypeofUse (MG)
WaterUtilityFacilitiesIndoor 41.464
WaterUtilityFacilitiesIrrigation 2.588
Total Unbilled Metered
44.052
Consumption
Table4
TheauditorhasfilledouttherelevantsectionoftheReportingWorksheetaccordingly:
Billed unmetered: + ? 7 29.872 MG/Yr
Unbilled metered: + ? 7 44.052 MG/Yr
Page30

AuditSoftwarewhenassessingdatavalidityassociatedwithunbilledmeteredconsumption.Beloware
Towhatdegreearethepoliciespertainingtounbilledaccountscodifiedandadheredto?
Whatisthequalityofavailableinformationonthenumberofunbilledmeteredaccounts?
Whatisthefrequencyofmeterreadingandlevelofmeterupkeep?
Inwhatmannerareconsumptionvolumesdetermined(estimation,meterreading)?

5.2.4 UnbilledUnmeteredConsumption
Unbilled unmetered consumption consists of those uses

that are neither metered nor revenuegenerating. Most The AWWA default value for
often, this includes operational uses by the water utility. Unbilled Unmetered Consumption
Because the volumes associated with these forms of is provided in the model because
consumption can be challenging to compile and accurately manyutilitiesdonothaveaccurate
quantify,AWWAprovidesadefaultvaluethatcanbeused records of Unbilled Unmetered
until better information within the utility becomes Consumption. That said, it is best
available.Thedefaultvalueequatesto1.25%ofthevolume practice to develop a system for
of Water Supplied. AWWA recommends using the default tracking such uses. Many utilities
value unless you have reason to believe that the actual have begun doing this as part of
volumemaybesignificantlydifferentthan1.25%ofWater their drought response. Some
Supplied.xv You should be aware that tracking down such utilities find that their volume of
consumption volumes can be timeconsuming and unbilled unmetered consumption
potentiallynotworththeexpensegiventherelativelysmall differs significantly from the
volumeofwatertypicallyinquestion. AWWAdefaultvalue.
The GCWD auditor used the default percentage because
GCWD does not keep thorough documentation of unbilled unmetered consumption, as shown below.
However, the auditor suspects that the actual consumption volume is less than the default value and
has initiated a utilitywide review of all unbilled unmetered uses so that future audits can more
accuratelyestimateconsumption.
Page31
Ifyouchoosetoquantifyunbilledunmeteredusesratherthanusethedefaultvalue,thefollowingtypes
ofusescommonlyfallintothiscategory:
Reservoirdraining
California based utilities should
Wateruseatwaterutilityfacilities(ifunmetered)
integratetheusesmarkedbyan
Waterqualitytesting
asterisk into the billed customer
Water treatment plant operations (if within boundaries baseassoonaspossiblebecause
of water audit, i.e. downstream of the source meters Proposition 218 requires that all
relieduponforWaterSupplieddata) water be charged for at the cost
Flushing water mains (hydrant flushing), storm inlets, ofservice.Utilitywateruseisthe
culvertsandsewers onlyexceptiontothisrule.
Firefightingandtraining*
Fireflowtestsperformedbytheutility*
Streetcleaning*
Landscaping/irrigationinpublicareas*
Constructionsites(shouldbebilledmetered,butsometimesnotenforcedbyutilities)*
*Seesidebaronright.
DataValidityGrading

Audit Software when assessing data validity associated with unbilled unmetered consumption. If you
choosetousetheAWWAdefaultvalue,thedatavaliditygrade isautomaticallyassesseda5.Ifyou
calculateunbilledunmeteredconsumptiononyourown,herearesomeofthekeyconsiderations:
Towhatdegreeareunbilledunmeteredusesknown?
Towhatextentarethereproceduresinplacetotrackunbilledunmeteredconsumption?
Towhatextentareunbilledunmeteredconsumptionvolumesactuallyquantifiedinpractice?
In what manner are unbilled unmetered consumption volumes quantified (time by flow rate
formulae,knownfixedvolumes,othermethodsofestimation)?
Whatisthequalityofrecordkeeping?
WaterLosses
Youvejustcompletedthenecessaryinformationtobeabletodetermineanimportantmetric:
thevolumeofwaterlosses.Waterlosses,whichincludeapparentlosses(paperlosses)andreal
losses(leakage)canbethoughtofsimplyasWaterInminusWaterOut.Asshowninthewater
balanceinFigure11,waterlossesisthevolumeofWaterSuppliedminusAuthorized
Consumption.IntheAWWASoftware,refertothelinetitledWaterLossesontheReporting
WorksheetorgotothesheettitledWaterBalancetoseethecalculatedvolumeofwaterlosses
foryoursystem.
Page32
5.3 WaterLosses
Water Losses consists of Apparent Losses and Real Losses, as shown in Figure 11. First, you will
determine the volume of Apparent Losses, which will in turn determine the volume of Real Losses
which is simply the remainder after the volume of Apparent Losses has been subtracted from the
volumeofWaterLosses.
BilledAuthorized
RevenueWater
Consumption
Authorized
Consumption
UnbilledAuthorized
Consumption
Water
Supplied
NonRevenue
Water
WaterLosses
RealLosses
Figure11
Page33
5.3.1 ApparentLosses
Apparent Losses is one of the two primary components of Water Losses. The determination of the
volumeofApparentLossesisthethirdmajorstepinassemblingtheAWWAwaterbalance.Accordingto
Apparent Losses: The nonphysical losses that occur when water is successfully delivered to
thecustomerbutisnotmeasuredorrecordedaccurately.xvi
theAWWAM36manual:
Figure 12 below shows the position of Apparent Losses and its subcomponents within the simplified
waterbalance.
BilledAuthorized
RevenueWater
Consumption
Authorized
Consumption
UnbilledAuthorized
Consumption
Water
Supplied
NonRevenue
Water
WaterLosses
RealLosses
Figure12
As shown above, Apparent Losses consists of Unauthorized Consumption, Customer Metering

Inaccuracies,andSystematicDataHandlingErrors:
Unauthorized Consumption: Consumption that is not explicitly or implicitly authorized by the utility,
commonlyknownaswatertheft.
Customer Metering Inaccuracies: Inaccuracies in registering water consumption by retail customer

meters.
Systematic Data Handling Errors: Errors caused by accounting omissions, errant computer
programming, data gaps, and data entry; inaccurate estimates used for accounts that fail to produce
meter readings; billing adjustments that manipulate billed consumption so as to generate a rightful
financialcreditinsuchawaythatbilledconsumptiondoesnotreflectactualconsumption.xvii
Page34
ControllingApparentLossescanoffersubstantialopportunitiesforrevenuerecovery,sincesuchwateris
valued at the customer retail cost. In other words, Apparent Losses represent water that is being
delivered but not being billed forthe recovery of which can have significant financial benefits.
ThoroughinvestigationofApparentLossesnotonlyhasrevenuerecoverypotential,butcanalsoshed
light on opportunities for improving operational practices with respect to meter reading, customer
billing,accountmanagement,andmetertestingandreplacement.
ItisimportanttodevelopanaccurateunderstandingofApparentLossesbecauseitsrelationshipwith
Real Losses is zerosum, due to the deduced determination of Real Losses. Any underestimation of
ApparentLosseswillresultinanoverestimationofRealLosses,andviceversa.
This guide proceeds by describing how to calculate the volumes associated with the three types of
ApparentLosses.
Page35
5.3.1.1 UnauthorizedConsumption
Unauthorizedconsumption,alsoknownaswatertheft,caninclude:
Illegalconnections
Openbypasses
Buriedorotherwiseobscuredmeters
Misuseoffirehydrantsandfirefightingsystems
Vandalizedorbypassedconsumptionmeters(metertampering)
Tamperingwithmeterreadingequipment
Illegally opening intentionally closed valves or curb stops on customer service piping that has
beendiscontinuedorshutofffornonpayment.xviii
While Unauthorized Consumption varies from system to system, the total volume of water lost is
typicallyaverysmallportionofthevolumeofWaterSupplied.AWWAhasfoundadefaultestimateof
0.25%ofWaterSuppliedtobesuitableinmostcases.
Because investigating Unauthorized Consumption can be challenging and tedious, and because the
volume of water at stake is typically very small, it is recommended that you use the default estimate
unlessyouhavereasontobelievethatyoursystemexperiencessignificantlydifferentlevelsoftheft. xviii
Thatsaid,investigationofwaterthefthasvaluebeyondthesakeofthewateraudit,sotheavailabilityof
theAWWAdefaultestimateshouldnotbeareasontoneglectproperoversightofwatertheft.
InourexampleofGoldCountryWaterDistrict,theauditorhasselectedtheAWWAdefaultestimateof
0.25%ofWaterSupplied,whichtranslatesto96.441MG.Nonetheless,theauditorhasstartedaworking
group with colleagues to evaluate water theft oversight, including a systematic review of policies,
procedures,andpractices.

AuditSoftwarewhenassessingdatavalidityassociatedwithUnauthorizedConsumption.Ifthedefault
estimateisselected,thedatavaliditygradingwillautomaticallybeassessedata5.Ifyouchooseto
determinethevolumeyourself,youshouldconsiderthefollowingwhengradingdatavalidity:
Levelofawarenessofextentoftheft
Coherenceofpoliciesandprocedurestopreventandpunishtheft
Thoroughnessofestimationprocedures
Page36
5.3.1.3 CustomerMeteringInaccuracies
Customer metering inaccuracies (also called customer metering error) account for the fact that all
meterpopulationsfeatureacertaindegreeofinaccuracyinregisteringcustomerconsumptionvolumes.
Inaccuracies typically reflect meter underregistration due to wearandtear and inappropriate meter
sizing (usually oversizing). Meter overregistration is
possible,thoughlesscommon.
It is simply not practical to inspect and test every single TestingBeforeInstallation

customermeter.Large,highrevenuemetersaretypically
Best practice is to inspect and test
associated with industrial, commercial, and agricultural
all large meters prior to use. While
customers that produce a much larger share of revenue
this is practical for large meters, it
per account than small meters, which tend to be
would be practically challenging to
associated with residential uses. As such, it is
test every meter in a large set of
recommended that the utility annually inspect and test
small meters, so it is advised that
highrevenue meters and a random sample of small
the utility test a random sample of
meters.xix
meters (stratified by relevant
The purpose of this section is to introduce key concepts criteria, such as meter
with respect to the determination of customer metering manufacturer/model/size) prior to
error.Foramorecomprehensiveguideformetertesting, installation.
refer to the AWWA Manual M6, Water Meters
Selection,Installation,Testing,andMaintenance.
SmallMeterTesting
Utilities should test a random sample of small meters Whatisarandommetersample?
(see sidebar on the meaning of random). Ideally, the A random meter sample means that
utility would stratify its small meter population into meters are selected entirely by
different groups, based on any combination of chance and not for any particular
manufacturer, model, and size, and randomly test reason. This can be achieved by
meters within each group. Information on meter age labeling all of the meters with a
and/or total throughput (cumulative water volume unique ID code and using a random
passed through the meter over its lifespan) could be number generator such as that
included for additional analysis. Keep in mind that any offeredbyMicrosoftExcel.Herearea
given sample of a particular meter group should be fewexamplesofsamplesthatarenot
sufficiently large to be meaningfulfor example, three random:
tests of 3/4 Badger meters is not sufficiently large to Test results from meters that
confidently represent the actual performance of the were removed due to customer
entire population of 3/4" Badger meters. The level of complaints
specificitytowhichtheanalysisgoesshouldbeinformed Test results from meters that
byyourutilityscapacitytotestmetersandperformdata wereremovedduetoage
analysis. Test results from meters located
inaparticulargeographicarea
Small meters are typically tested at a number of flow
ratesbecausemeteraccuracyvarieswithflowrate.
Page37
Table5summarizestestresultsforGCWD,whichrandomlyselected100smallmetersfortesting.
GCWDMeterTestingExample
TestFlowRate MeanAccuracy
Low(0.25gpm) 94.60%
Medium (2.0
97.20%
gpm)
High(15.0gpm) 99.20%
Table5
The next step is to identify the volume of consumption

registered at different flow rates. Sometimes, utilities will Investigatehowmetersaretested:
have systemspecific data showing the breakdown of Usingatestbench?
consumption by flow rates, but this is rare. For utilities that Portably,inthefield?
do not have such information at hand, it is advised that the Senttocertifiedthirdparty?
AWWAvolumeweightedstandardsbeapplied.Thesevalues
Assess the reliability of these testing
are shown in Table 6, under column A. The GCWD auditor
forms.Forexample,howdoyouknow
usedthecombinationofAWWAvolumeweightedstandards,
that the meter test bench produces
consumptiondata,andmetertestresultstocalculatemeter
accurate results? Has the test bench
error,asdetailedinTable6.Thedeterminationofcustomer
beentestedorcalibrated?
meter error applies to metered consumption only, so any
unmeteredconsumptionshouldbeexcludedfromthisanalysis.
Stuck meters, or dead meterswhere the register does not turn at all when water is passed
throughshouldbeexcludedfromthisanalysisinsofarastherearepoliciesandproceduresinplaceto
identifydeadmeterspromptly,toreplacethem,andtobillthecustomeraccordingly.
GCWDMeterTesting:AWWAVolumeWeightedStandardsExample
A B C=A*B D E=(C/D)C
GCWDFY15
GCWDFY15Small
Consumption SmallMeter
MeterTotal Mean MeterError
FlowRate Volume Consumption
Consumption Accuracy (MG)6
Distribution4 5 atFlowRate
(MG)
(MG)
Low(0.51.0gpm) 2.0% 26,946.454 538.929 94.60% 30.763
Medium (1 10 26,946.454 17,191.838 97.20% 495.238
63.8%
gpm)
4
Inotherwords,anestimated2.0%oftotalconsumptionbysmallmetersisregisteredatlowflows.
5
Basedonsalesdata.
6
Theformulaformetererrorproducesavalueofoppositesigntotheformulathatwasusedtocalculatemeter
errorforsourcemetersinSection5.1.3.ThatisbecausetheAWWAsoftwareissetupsuchthatnegativevalues
mean underregistration for source meter error, while negative values mean overregistration for customer
meters.
Page38
High(1015gpm) 34.2% 26,946.454 9,215.687 99.20% 74.320

Total 100.0% 26,946.454 26,946.454 97.82%7 600.322
Table6
7
The total mean accuracy of 97.82% is a composite accuracy calculated by comparing the total uncorrected
volumeofsmallmeterconsumptiontothetotalcorrectedvolume[(26,946.454/(26,946.454+600.322)].
Page39
LargeMeters
Asimilaranalysisdescribedaboveforsmallmetersabovecanbeperformedforlargemeters.However,
there is no reliable industry standard for consumption volume distribution by flow rate, since large
meter use is much more unpredictable and variable. If your utility has reliable information on the
breakdownoflargemeterconsumptionvolumesbyflowrange,thatisideal.Ifsuchinformationisnot
available,thenyoucanequallyweightaccuracyatallflowsbyutilizingasimpleaverage.Table7shows
largemeteraccuracyresultsforGCWDfromteststhatwereperformedduringtheauditperiod.GCWD
testsapproximatelyhalfofitslargemeterseveryyear.
GCWDLargeMeterTestExample
TestFlowRate MeanAccuracy
A Low 91.40%
B Medium 96.90%
C High 99.90%
(A+B+C)/3 Average 96.07%
Table7
TheGCWDauditorusedtheaverageaccuracyof96.07%andbillingdatatocalculatelargemetererror,
asshowninTable8.
GCWDLargeMeterErrorExample What if my utility does not have any

A B C=(B/A)B metertestingdocumentation?
GCWDFY15Large If your utility does not have any reliable,
Meter
MeterTotal MeterError representative meter test data available,
Accuracy
Consumption(MG) you should nonetheless estimate meter
96.07% 7,071.354 289.528 accuracy. You should speak with those in
your utility who are most knowledgeable
Table8
about the customer meter stock, and
ForGCWD,totalcustomermeteringinaccuraciesforFY15 consider the following factors when
were889.95MG,asshowninTable9. estimatingaccuracy:
Age distribution of the meter
GCWDTotalCustomerMetering
stock
InaccuraciesExample
Meterinstallationquality
MeterError(MG)
Any miscellaneous test results
SmallMeters 600.322 (e.g.testsonretiredmeters)
LargeMeters 289.528
Total 889.850
Table9
Page40
The auditor then filled out the Reporting Worksheet accordingly by selecting the Value function for
CustomerMeteringInaccuracies:

DataValidityGrading
AuditSoftwarewhenassessingdatavalidityassociatedwithCustomerMeteringInaccuracies.Beloware
Qualityofrecordkeepingoncustomermeterpopulation
Extentandfrequencyofmetertesting
Extentofmeterreplacementprogram,anddegreetowhichtheprogramisstrategicallydesigned
Meansbywhichaccuracylevelsaredetermined
Whetherthirdpartyreviewofcustomermetermanagementisutilized
Page41
5.3.1.4 SystematicDataHandlingErrors
Systematic Data Handling refers to the processes that transmit, archive, and report customer
consumption totals as derived from the meter population. In other words, it consists of the various
processesfromthepointofthemeterreadtotheuseoftheconsumptiondata.xx
To determine the Apparent Losses volume attributable to Systematic Data Handling Errors, you can
either rely upon the AWWA default estimate of 0.25% of Billed Metered Authorized Consumption or
performarigorousreviewofdatahandling.Yourutilitycanbenefitfromthelatteroption,sincesuchan
exercisenot onlycontributestoamoreaccurateauditbutisanessentialpartofqualitycontrol.That
said,theAWWAdefaultestimateisusefulwhentimeandresourcesarelimited.
If you choose to determine the volume yourself, rather than rely upon the default estimate, the
paragraphsbelowcanhelpgetyoustarted.
MeterReading
Meterreadingcanintroduceerrorsorinaccuraciesintothebillingsysteminanumberofways.
Regardlessofthetypeofmeterreadingsystememployed(manualreads,AMR,AMI),acertainnumber
ofreadswillfailtosuccessfullyregister.Thefrequencyoffailedreads(thepositiveequivalentwouldbe
the meter read success rate) should be investigated, particularly in settings where meters are read
manually.
When a successful read is not obtained, estimates are typically made. The frequency of estimates
shouldbeevaluated,aswellasthevolumetricimpactofsuchreads(e.g.2.5%ofvolumetricsaleswere
associatedwithestimatedreads.)Additionally,youshouldlookintothemeansbywhichconsumptionis
estimated, and assess whether such methodology is appropriate. Sometimes estimates are based on
outdatedinformationthatpoorlyreflectsactualconsumption.
Zeroreadsreadswhereconsumptioniszeroshouldbeinvestigated.Sometimesthesereadswill
reflect genuine zeroconsumptionfor example, on an account where the customer has been on
extendedvacationbutothertimestheycanindicatefailedreads,metertamperingortheft,orastuck
meter.Accountsthatfeaturestringsofconsecutivezeroreadsshouldbegivencloseattention.
Billing adjustments, which are made in order to resolve financial concerns, can sometimes interfere
withtheaccuratecalculationofconsumption.Manyutilitieswillmodifybilledconsumptionvolumesto
trigger a financial adjustment, in the process distorting consumption data. Ideally, utilities will either
issuefinancialadjustmentswithoutchangingconsumptionvolumes,orwillkeeptwodistinctfieldsfor
customer consumption: one for registered consumption (actual water use), and another for billed
consumption.xxiIn theabsenceofsuch practices,youastheauditorwouldneedto thoroughlyreview
adjustmentstogetasenseoftheirvolumetricimpact.Oneplacetostartwouldbetoexaminenegative
billedconsumptionvolumes,whichwouldpresumablyreflectacreditissuedtothecustomer.
Page42
PolicyandprocedureshortcomingscancontributetoApparentLosses,includingbutnotlimitedto:
Inefficienciesordelaysinpermitting, metering,orbilling,allowingwaterusetooccurwithout
propertracking.
Poor customer account management, such as accounts that were not initiated, lost, or
transferrederroneously.xxi
The GCWDauditordeterminedthatsuchathoroughreviewwasbeyond thescopeof theFY15water
auditandreliedupontheAWWAdefaultestimate.Itistheauditorsgoaltoperformamanualreviewof
SystematicDataHandlingErrorsforthenextauditinconjunctionwiththecustomerbillingdepartment.
As such, the auditor has filled out the Reporting Worksheet accordingly. The worksheet automatically
calculatedthevolumeofSystematicDataHandlingErrorstobe85.045MG.

DataValidityGrading
Audit Software when assessing data validity associated with Systematic Data Handling Errors. If the
default estimate is selected, the data validity grading will automatically be assessed at a 5. If you
choosetodeterminethevolumeyourself,youshouldconsiderthefollowingwhengradingdatavalidity:
Coherenceandrigorofpoliciesandproceduresgoverningaccountactivationandbillingoperations
Recordkeepingsystem(computerized,paperrecords)
Relationshipbetweenbillingadjustmentsandmeasuredconsumptionvolumes,andunderstanding
ofthatrelationship
Frequencyandrigorofinternalchecksonbillingaccuracy
Utilizationofthirdpartyauditing
Coherenceofpoliciesandprocedurestopreventandpunishtheft
Thoroughnessofestimationprocedures
UponcompletingthethreecategoriesofApparentLosses,theAWWASoftwarewillautomaticallysum
themtodetermineatotalvolumeofApparentLosses,as
shownbelowusingtheexampleofGCWD:
It is important to distinguish between the
topdownmethodofcalculatingRealLosses
and the bottomup, or Component
Analysis, method. The bottomup method
seekstoquantifyvolumesofleakageusinga
combination of leakbreak documentation
5.3.2 RealLosses and engineering modeling. This approach is
At this point, you have entered all of the necessary veryhelpfulforbreakingdownleakageinto
information to be able to determine the volume of Real discrete categories and designing targeted
Losses(leakage).AsdiscussedinSection2.1.1,inatopdown leakage mitigation strategies. For more
information,seeFurtherResources.
Page43
water audit such as this one, Real Losses are derived using a process of deduction or process of
elimination.NowthatyouhavecalculatedthevolumeofWaterSupplied,AuthorizedConsumption,and
ApparentLosses,thevolumeofRealLossesissimplywhatisleftover.
In the case of GCWD, the volume of Real Losses is 2,931.297 MG, as shown in the excerpt from the
ReportingWorksheetbelow.(ThiscanalsobeseenintheWaterBalanceworksheet).
Real Losses (Current Annual Real Losses or CARL)

Real Losses = Water Losses - Apparent Losses: ? 2,931.297 MG/Yr
Congratulations,younowhaveacompletewaterbalanceinplace!Atthispoint,youdonotquiteyet
haveacompletewaterauditthefollowingsectionsdiscussthenecessarypiecesofsysteminformation
and cost data that are necessary to complete the water audit, which provides useful performance
metricsbeyondthewaterbalanceitself.
Page44
5.4 SystemData
To complete a water audit, it is essential to provide key
information about the water system to which the audit pertains. System Data is not used
This information informs the calculation of key performance solely for informational
metrics. Specifically, system data determines the leakage purposes, but is critical to
allowanceforyoursystem.Allsystemsevenbrandnewones the development of a
willinevitablyleak.Theleakageallowancerepresentsthebaseline meaningfulaudit.
volume of leakage that is deemed unavoidable given current
operating conditions. In technical terms, this leakage allowance is referred to as the volume of
UnavoidableAnnualRealLosses(UARL).
The UARL is determined by length of piping, density of service connections, and average operating
pressure.Figure13belowshowstheSystemDatasectionwithintheReportingWorksheetoftheAWWA
Software.
SYSTEM DATA
Length of mains: + ? miles
Number of active AND inactive service connections: + ?
Service connection density: ? conn./mile main
Are customer meters typically located at the curbstop or property line? (length of service line, beyond the property
Average length of customer service line: + ? ft boundary, that is the responsibility of the utility)
Average operating pressure: psi

+ ?

Figure13
PleasenotethattheUARLhasnotbeenprovenfullyvalidforsystemsthatareverysmalland/oroperate
atalowpressure.AsdescribedintheDefinitionstaboftheAWWASoftware,if
A) (Lmx32)+Nc<3,000
WhereLmisthelengthofmains,inmiles
WhereNcisthenumberofserviceconnection
OR
B) Pressure<35PSI
thenthecalculatedUARLvaluemaynotbevalid.Inthiscase,theAWWAWaterAuditSoftwaredoesnot
calculatetheUARLandtheInfrastructureLeakageIndex(ILI)andinsteaddisplaysanN/Amessage.
Page45
5.4.1 LengthofMains
Thisisthetotallengthoftransmissionanddistributionpipelinesinthepotablewatersystemtowhich
theauditpertains.Itdoesnotincludethelengthofservicelines,butitdoesincludefirehydrantlateral
pipethesegmentofpipebetweenthewatermainandthehydrant.Iftheactuallengthoffirehydrant
lateral pipe is not known, an average length can be estimated, and then multiplied by the number of
hydrantsinthesystem.
5.4.1.1 DataValidity
Youshouldconsiderthefollowingwhengradingdatavalidity:
Qualityofprocedurestodocumentnewwatermaininstallations
Typeofrecordkeeping(paperrecords,GIS,assetmanagementdatabase)
Qualityofrecordkeeping
Frequencyoffieldvalidation
5.4.2 NumberofActiveandInactiveServiceConnections
Thisincludesthetotalnumberofcustomerserviceconnectionlaterals,whicharelocatedbetweenthe
watermainandthecustomer.Itdoesnotincludefirehydrantlateralpipe,whichshouldbeaccounted
for in Length of Mains. It is important to note that this statistic reflects distinct piping connections,
including fire connections, regardless of whether the respective account is active or inactive. This
numbermaybedifferentfromthenumberofcustomersoraccounts.
Strengthofpermittingpolicyfornewserviceconnections
Strengthofenforcementandoversightofpermitting
Qualityofrecordkeeping
Typeofrecordkeeping(paperrecords,GIS,assetmanagementdatabase)
Frequencyoffieldvalidation
Resultsoffieldvalidation
Page46
5.4.3 AreCustomerMetersTypicallyLocatedattheCurbstoporPropertyLine?
Thisfieldrequiresayes/noresponse.Thepointofthisquestionistodeterminethelengthofcustomer
owned pipe that is upstream of the meter. If your customer meters at located at the curbstop or the
propertyline,thenthislengthiszero,andyoushouldselectYes.However,ifyourcustomermeters
aretypicallylocatedbeyondthecustomerpropertyline,youwillneedtoselectNo,andthenestimate
theaveragelengthofcustomerserviceline.Ifmostofyourcustomersareunmetered,thenyoushould
selectNoandestimatetheaveragelengthofcustomerservicelinebetweenthepointofownership
transferandthebuildingline.
InCalifornia,mostutilitiescustomermetersarelocatedatthepropertyline(typicallyonoradjacentto
thesidewalk).
For a helpful visual display of the various metering setups, refer to the Service Connection Diagram
worksheetintheAWWAsoftware,aswellasthedefinitionundertheDefinitionsworksheet.
IftheresponsetothisquestionwasYes,thenanautomaticgradingof10isapplied.Iftheresponse
was No, then you will need to assign a data validity score, in which case you should consider the
following:
Clarityofpolicygoverningdelineationofwaterutilityownershipandcustomerownershipofservice
connectionpiping
Basisforestimateofaveragelengthofpiping(numberoffieldmeasurements,statisticalvalidityof
sample)
Qualityofrecordkeepingsystem
5.4.4 AverageOperatingPressure
Theaverageoperatingpressureforthepotabledistributionnetworkplaysacriticalroleindetermining
theleakageallowancevolume(UnavoidableAnnualRealLosses).Thus,itisimportanttobeasthorough
aspossibleindeterminingthisvalue.
Thereareanumberofwaystodeterminethisvalue:
Ifyourutilityutilizesahydraulicmodel,anaverageofthenodescanbetaken.Ensurethatthe
model has been recently calibrated with actual field pressures and that the nodes are
geographically distributed throughout the system. If you do not have a calibrated hydraulic
model,useoneofthefollowingthreemethods:
o If the water distribution system is relatively flat and/or consists of a single pressure
zone, you should take a representative sample of pressure readings, and then simply
averagethosevalues.
o If the water distribution system features significant elevation changes, and/or consists
of multiple pressure zones, the average pressures for each zone should be taken, and
thenweightedaccordingtoeitherthenumberofserviceconnectionsormilesofmains
withineachzone,dependingonthefollowing:
Page47
If there are >32 service connections

per mile of main for the entire The service connection density
system, use number of service for your system is automatically
connections as the basis for calculated by the AWWA
weighting. software on the Reporting
Ifthereare<=32serviceconnections Worksheet,underSystemData.
per mile of main for the entire system, use miles of main as the basis for
weighting.xxii
o Ifyouarecompilingtheauditforthefirsttimeanddonothavetheabilitytoconduct
such testing, the average pressure can be approximated, but with a low data validity
grading.
Regardless of which method is used above, do your best to gain a representative sample of average
system operating conditions. Consider the level of demand throughout the dayit would not be
advisabletousepressuredatafromthemiddleofthenight,whendemandisatitslowestandpressure
is highest, or in the early morning, when demand peaks and pressure is at its lowest. Also take into
accounttankoperationsandhowtheyimpactpressurethroughouttheday.
DataValidity
Meansofgatheringpressuredata
Representativenessofpressuredata
Pressuremanagementsetup
Pressuremonitoringsystem
Qualityofpressurezonemanagement/discretenessofpressurezones(extentofbreaches)
In the case of GCWD, the auditor has assembled system data and filled out the Reporting Worksheet
accordingly:
SYSTEM DATA
Length of mains: + ? 6 1,254.8 miles
Number of active AND inactive service connections: + ? 6 123,560
Service connection density: ? 98 conn./mile main
Are customer meters typically located at the curbstop or property line? Yes (length of service line, beyond the property
Average length of customer service line: + ? ft boundary, that is the responsibility of the utility)
Average length of customer service line has been set to zero and a data grading score of 10 has been applied
Average operating pressure: + ? 7 82.4 psi

Page48
5.5 CostData
A water audit provides more than just an accounting of water over a
givenperiod.Italsoprovidesmeaningfulfinancialinformationthatcan CostDataisnotjustfor
informforwardlookingmanagementdecisions. informational
purposes, but is critical
The AWWA software provides financial performance indicators based to the development of
on three different pieces of information entered by the auditor, ameaningfulaudit.
discussedinthefollowingsections.
Figure13belowshowstheCostDatasectionwithintheReportingWorksheetoftheAWWASoftware.

Figure14
5.5.1 TotalAnnualCostofOperatingWaterSystem
Thetotalcostofoperatingthepotablewatersystem,including,butnotlimitedto:
Operationsandmaintenance(O&M)
Financingcosts(debtservice)
Salariesandbenefits
Insuranceandadministrativecosts
Make sure to include only costs pertaining to the potable water system. Costs associated with
wastewater,biosolids,andrecycledwatershouldbeexcluded.
Typeofaccountingsystem(paper,electronic)
Reliabilityofaccountingsystem
Frequencyandrigorofauditing
Page49
5.5.2 CustomerRetailUnitCost
CustomerRetailUnitCost:Thisrepresentsthechargethatcustomerspayforwaterandservesas
theunitcostthatisappliedtoApparentLosses,sincesuchwaterisdeliveredtocustomersbutnot
billedfor.Additionalchargesforsewer,stormwater,and/orbiosolidsprocessingmaybeincluded,
insofarasthosechargesaredirectlybasedonthevolumeofpotablewaterconsumed.
Todeterminetheappropriatecost,youshouldaskyourself,Ifwefailtocollectpaymentforaunitof
water consumed by a retail customer, how much revenue is lost? Because every utility has a unique
rate structure, often featuring a mix of fixed service fees, variable use charges, tiers, and base
allocations,youwillhavetocomeupwiththemostreasonablewaytodetermineacompositecostfor
the audit period. A simple approach would be to divide total
volumebasedrevenuesbythetotalvolumeofpotablewater If your utility employs the
delivered. services of a professional rate
consultant,theycanbeavaluable
AWWA M36 states that additional charges for sewer, storm
resource in calculating the
water,and/orbiosolidsprocessingmaybeincluded,insofaras
customerretailunitcost.
those charges are directly based on the volume of potable
waterconsumed.Otherwise,suchcostsshouldbeexcluded.
Finally,makesurethatyouselecttheappropriatevolumetricunitinthefieldcircledinredbelow.

The GCWD auditor determined the customer retail unit cost to be $2.55/CCF, based on the following
information:
GCWDRetailUnitCostCalculationExample
A FY15BilledMeteredConsumption(MG) 34,017.81
B=A*1,000,000/748 FY15BilledMeteredConsumption(CCF) 45,478,352.98
C FY15VolumeBasedWaterSales $115,969,800.00
D=C/B CustomerRetailUnitCost $2.55
Table10
Page50
Degreetowhichbillingoperationsaccuratelyreflectratestructure
Meansbywhichthecompositerateiscalculated
Auditingprocedures
Page51
5.5.3 VariableProductionCost
RealLosses(leakage)aretypicallyvaluedattheVariableProductionCost.Inotherwords,theVariable
Variable Production Cost: The cost to supply the next unit of water to the system. This cost is
determined by calculating the summed unit costs for ground and surface water
treatmentandallpowerusedforpumpingfromthesourcetothecustomer.Itmayalsoinclude
other miscellaneous unit costs that apply to the production of drinking water. It should also
includetheunitcostofbulkwaterpurchasedasanimport,ifapplicable.vii
ProductionCostrepresentsthevalueassociatedwithleakage(anditsrecovery).
Determiningthecostofprovidingwatercanbequitecomplex,dependingonthedegreeofdetailthat
youchoosetogointo.
AccordingtotheM36,thecostratedependsonthelocaleconomicandwaterresourceconsiderations
oftheutility.8Ultimately,youwillneedtodeterminethemostaccuratemeansofassessingthecostto
your utility of providing water. The five common approaches below can help inform your
determination:
The AWWA software is set up such

that the reporting of Variable
1. Power & Chemicals: This is a presentoriented
ProductionCostwillbeinwhichever
approach that could be used in a utility where
unit was selected for volumetric
100%ofsupplycomesfromgroundwaterand/or
reporting at the beginning of the
surfacewater,andthesolecostofproductionis
power and chemicals. It does not consider the audit. Make sure that volumetric
value of futureoriented benefits of real loss unitsareproperlytakenintoaccount
reduction, such as avoided expansion of supply whenperformingcalculations.
(e.g.drillingnewwells).
2. Cost of Imports: This would be appropriate in a utility that imports 100% of its water.
Alternatively,itcouldbeusedinautilitythatfeaturesamixoflocalandimportedsourcesbut
whereleakagereductionwouldtranslatedirectlytoreducedimportedwaterpurchases.
3. Cost of Most Expensive Source: This approach is appropriate in a utility where leakage
reduction would translate directly to reduced supply of the most expensive source of water,
whateverthatmaybe(e.g.desalinatedwater).
4. Composite/Average Cost: This approach averages the cost to supply water from the various
sources(e.g.groundwater,surfaceandimportwater).Thisapproachwouldbeappropriateina
utility that does not know how leakage reduction would impact the use of different water
sources.
5. CostofAvoidedExpansionofSupply:Thisisthemostfutureorientedapproach,asitassesses
the value of leakage reduction at the avoided cost of future expansion of supply. It could be
8
Local circumstances can vary considerably. For example, agencies that generate hydropower via distribution
system flows could take into account the value of electricity generation form Consequential Hydropower
GenerationandSelfGeneratedRenewableEnergyinassessingtheVariableProductionCost.
Page52
appropriateinautilitywhereleakagereductionstranslatedirectlytoavoidedexpansionssuch
asnewwellsandtreatmentplants.
Additionally, the AWWA software offers the auditor the option of valuing real losses at the Customer
RetailUnitCostinsteadoftheVariableProductionCost.
DWRasksthatyouprovidecommentaryonhowyoudeterminedtheVariableProductionCost.
YoucandosousingtheCommentsfeatureofthesoftware.DWRsrequestnotwithstanding,this
isagoodideainitselftheinformationwillbehelpfulwhencompletingfutureaudits.
As an example of a starting point, you can add up the direct variable costs associated with water
production and wholesale purchases, and then divide by the total volume of Water Supplied (if
applicabletoyourutility).
Thefollowingcostsshouldbeincluded,whereknown:
Treatmentcosts(chemicals)
Energycostsforpumping,treatment
Wholesale(a.k.a.bulkorimport)purchasecosts
Forexample,theGCWDauditordeterminedtheVariableProductionCosttobe$2,240.87/MG,basedon
thefollowingcalculation:
GCWDVariableProductionCostCalculationExample
A WaterPurchases $55,722,822
B Chemicals $4,146,708
C EnergyTreatment $9,330,093
D EnergyPumping $17,245,376
E=A+B+C+D TotalCost $86,445,000
F WaterSupplied(MG) 38,576.57
G=E/F VariableProductionCost($/MG) $2,240.87
Table11
AWWAsoftwareversions5.0andnewerincludeanoptionalcheckboxthatallowsyoutovalueReal
Losses at the Customer Retail Unit instead of the Variable Production Cost. This option can be
appropriateintimesofconstrainedwaterresourcessuchasdrought,where thevalueof reducing
leakage should be compared to conservation programs that reduce billed customer consumption.
Because reduction of leakage does not reduce customer sales, it can be assessed at the value of
revenuenotlost.
Page53
Reliabilityofaccountingsystem
Thoroughnessofcostallocations(whetherindirectorsecondarycostsareincluded)
Auditingprocedures
Page54
6 HOWTOINTERPRETTHERESULTSOFTHEWATERAUDIT
Based on the information that you have entered into the Reporting Worksheet, the AWWA software
producesanumberofhelpfulmetrics.Tovaryingdegrees,thesemetricscanhelpimprovewateraudit
validity,informwaterlosscontrolplanningefforts,andcompareperformanceovertimeandwiththatof
otherutilities.
OfthemetricspresentedwithintheAWWAsoftware,thefollowingsixareparticularlyimportant.
1. WaterAuditDataValidityScore(ReportingWorksheet)
o This is a composite score that reflects the
Theonlycriteriaforagooddata
qualityofthedataenteredintotheaudit,as
validityscoreiswhetherthescore
determined by your selfreported data
validityscoresforindividualfields.Thescore accurately reflects the quality of
is a volumetricallyweighted average, in data. In other words, a low data
which a lower score reflects less confidence validity score is not in itself a bad
in the accuracy of data, and a higher score thing.Itis better tohavealower
reflectsgreaterconfidence. score that accurately reflects the
quality of data than a higher
o The AWWA software offers general water
score that is less accurate. That
losscontrolguidanceontheworksheettitled
said, once you have established a
LossControlPlanningbasedontheresults
oftheDataValidityScore. trustworthy data validity score,
you should continually work to
2. PriorityAreasforAttention(ReportingWorksheet) improve upon it through concrete
o The audit software identifies priorities areas steps.
for data validity improvement based on the
data validity scores that you entered when completing the audit. These suggestions
offer opportunities to improve the overall data validity score and the reliability of the
performanceindicatorsproducedbytheaudit.Itisimportanttonotethatimprovement
of these priority areas will result in higher data validity, but not necessarily improved
systemperformanceinmanagingwaterlosses.
Figure15showsthesetwometricsfortheGoldCountryWaterDistrict.GCWDscompositedatavalidity
score of 73 out of 100 could be increased by improving the reliability of data that informs Water
Imported,VariableProductCost,andCustomerMeteringInaccuracies.
WATER AUDIT DATA VALIDITY SCORE:
*** YOUR SCORE IS: 73 out of 100 ***

A weighted scale for the components of consumption and water loss is included in the calculation of the Water Audit Data Validity Score
PRIORITY AREAS FOR ATTENTION:
Based on the information provided, audit accuracy can be improved by addressing the following components:
1: Water imported
2: Variable production cost (applied to Real Losses)
3: Customer metering inaccuracies
Figure15
Page55
While the previous two metrics shed light on the quality of the audit, the following performance
indicators (PIs) speak to the performance of the system during the audit period. They are calculated
solelyaccordingtotheactualdatathatyouenteredintothewaterauditandarenotimpactedbythe
data validity scores associated with those entries. These PIs can be located on the Performance
Rememberthatthequalityofwaterauditresultsisonlyasgoodasthedatagoinginto
the audit. Thus, the following performance metrics should be considered in context of
thelevelofdatavalidityofyouraudit.
Indicatorsworksheet.
3. NonRevenueWaterasPercentbyCostofOperatingSystem
o This PI is financial in nature, as it tells you the value of NonRevenue Water as a
percentage of the total cost to run the water system. It should not be deemed an
operational indicator, as it does not specifically speak to the level of Real Losses or
ApparentLosses.xxiiiRememberthatNonRevenueWaterincludesRealLosses(leakage),
ApparentLosses(paperlosses),andUnbilledAuthorizedConsumption.
o Forexample,thevalueofNonRevenueWaterinGCWDssystemwas5.9%ofthetotal
costtooperatethesystemfortheauditperiod,asshowninFigure16below.
4. InfrastructureLeakageIndex(ILI)
o The ILI indicates how well a
distribution system controls Real Changes in performance metrics over
Losses (leakage), taking into account timecanreflectchangesinthequalityof
its key characteristics, namely the data, and not necessarily actual changes
length of water mains, number of in system performance. For this reason,
service connections, and average youareencouragedtopromptlyimprove
systemoperatingpressure.TheILIisa datavalidityasmuchaspossible,sothat
leading benchmark standard for performance metrics can best reflect
evaluating system performance over actualsystemperformance.
time and in comparison to other
utilities.xxiv
o Mathematically,itistheratiooftheactualannualvolumeofRealLossestothelowest
possible volume of Real Losses that can be technically achieved for that water system
givencurrentoperatingconditions(CurrentAnnualRealLossesdividedbyUnavoidable
AnnualRealLosses).Forexample,anILIof2.5indicatesthatthevolumeofRealLosses
within a distribution system is 2.5 times the technical minimum, while an ILI of 1.0
indicatesthatthevolumeofRealLossesapproximatesthetechnicalminimum.
o TheILIdoesnotserveasavalidperformanceindicatorforsystemsthatareverysmall
and/or operate at a low pressure. For additional detail on these thresholds of
calculation, please refer to Section 5.4, where UARL requirements (necessary for the
calculationofILI)areintroducedinthecontextofsystemdataentry.
o Forexample,theILIforGCWDfortheauditperiodwas3.85,asshowninFigure16
below.
Page56
The calculation of the ILI is largely dependent on average system pressure, which
determinestheleakageallowance(UnavoidableAnnualRealLossesorUARL).Assuch,
changes over time in average system pressure can impact the ILI in a way that can
sometimesbemisleading.Forexample,imagineascenariowhereautilityreducesits
average system pressure substantially. Because of the direct relationship between
pressureandleakage,thevolumeofleakageistherebyreduced.However,inspiteof
the overall improvement in leakage management, the ILI could remain the same, or
evenincrease,becauseofthedecreaseintheleakageallowance!

Given an appreciation for the ILIs sensitivity to pressure, it is an extremely helpful
performanceindicatorespeciallywhenasystemskeycharacteristicsarestable.

5. ApparentLossesperServiceConnectionperDay
o This PI normalizes Apparent Losses so that you can evaluate performance over time
evenasthenumberofserviceconnectionschanges.Itisexpressedingallonsperservice
connectionperday.Itishelpfulasameansofcomparingperformanceacrossutilities.
o Forexample,GCWDexperiencedApparentLossesof23.75gallonsperservice
connectionperdayfortheauditperiod,asshowninFigure16onthefollowingpage.
6. RealLossesperServiceConnectionperDay
o This PI normalizes Real Losses so that you can evaluate performance over time as the
numberofserviceconnectionschanges.Itisexpressedingallonsperserviceconnection
perday.Itisoflimitedvalueasameansofcomparingperformanceacrossutilities,since
systems operate at different pressures. A higher pressure system can be expected to
leakmore,andviceversa,duetothedirectrelationshipbetweenpressureandleakage.
Assuch,RealLossesperServiceConnectionperDayperPSIofPressureisamoreuseful
metricforcomparingperformanceacrossutilities.
If your systems service connection density is less than 32 service connections
permileofpipeline,thenthemoreappropriatePIisRealLossesperLengthof
MainperDay.TheAWWASoftwarewillautomaticallypresenttheappropriate
indicatorbasedontheserviceconnectiondensityofyoursystem.
o Forexample,GCWDexperiencedRealLossesof65.00gallonsperserviceconnectionper
dayfortheauditperiod,asshowninFigure16onthefollowingpage.
Page57
Performance Indicators:
Non-revenue water as percent by volume of Water Supplied: 11.7%
Financial:
Non-revenue water as percent by cost of operating system: 5.9% Real Losses valued at Variable Production Cost
Apparent Losses per service connection per day: 23.75 gallons/connection/day

Real Losses per service connection per day: 65.00 gallons/connection/day
Operational Efficiency:
Real Losses per length of main per day*: N/A
Real Losses per service connection per day per psi pressure: 0.79 gallons/connection/day/psi
From Above, Real Losses = Current Annual Real Losses (CARL): 2,931.30 million gallons/year
? Infrastructure Leakage Index (ILI) [CARL/UARL]: 3.85
Figure16
WheredoIfindUnaccountedforWater? Where do I find percent

As discussed in detail in Section 1.1, the concept of losses?
unaccountedforwater has been formally abandoned Most people intuitively want to
by the industry because it has been deemed know what percent of water in
inconsistent and unreliable for the management of the system is lost. However, the
systemlosses.Asyouhaveseen,youhaveaccounted use of percentages can be
for all volumes of water through the water audit, misleading because they do not
leaving no water unaccountedfor. Even better, you allow for proper comparisons of
havebrokendownwaterlossesintothemorespecific performancebetweenutilitiesor
components of Apparent Losses and Real Losses, withinthesameutilityovertime.
whichisfarmoreusefulthansimplywritingofflosses ThePIsmentionedinthissection
asunaccountedfor.xxv are superior to percentages in
these respects. For specific

examples of the limitations of
percentages, refer to Appendix
B: Limits of the Use of
Percentages as Performance
Indicators
Page58
APPENDIXA:CORRECTINGFORMISALIGNMENTBETWEENMETERREADING/BILLINGCYCLESAND
AUDITPERIOD
To properly correct for misalignment between meter reading/billing cycles and the audit period, the
auditorshouldfirstdeterminebilledmeteredconsumptionforeverymeterreadingcycle(bydate).For
smallutilities,theremaybejustafewmeterreadingcycles;forlargeutilities,therecouldbemany.
The examplebelowintroducestheconceptwitha verysimple meterreadingschedule: where meters

arereadonthesamedayeachmonth.
Gold Country Water District staff read customer meters on the same day every month. The GCWD
auditorcompiledbilledmeteredsalesdatarelevanttotheauditperiod(7/1/146/30/15),asdetailedin
Table 12below, plus an extra meter read on either side of the audit period in order to correct for
misalignment.

GCWDMonthlySalesExample
CustomerSales
ReadDate (MG)
6/10/2014 3,104.146
7/10/2014 3,471.978
8/10/2014 3,439.905
9/10/2014 3,068.071
10/8/2014 2,865.882
11/10/2014 2,460.604
12/9/2014 2,422.748
1/10/2015 2,278.897
2/10/2015 2,233.471
3/11/2015 2,278.897
4/12/2015 2,877.013
5/10/2015 2,952.724
6/10/2015 3,202.570
7/10/2015 4,169.549
TotalFY15 33,642.876
Table12
Page59
Theauditorthenmadeadjustmentstobilledmeteredsalesonbothendsoftheauditperiod,basedon
theproratedshareofconsumptionactuallyfallingwithintheauditperiod.ThisisshowninTable13.
GCWDProratedConsumptionExample
ReadDate 7/10/2014 7/10/2015
PreviousReadDate 6/10/2014 6/10/2015
A CustomerSales 3,471.978 4,169.549
B DaysinAuditPeriod 10 20
C DaysofConsumption 30 30
D=A*(B/C) CustomerSalesCorrected 1,157.326 2,779.699
Table13
Table14belowshowsmonthlycustomersalesaftercorrectingformisalignment.
GCWDMonthlyMisalignmentExample
CustomerSales
Customer Correctedfor
Sales Misalignment
ReadDate (MG) (MG)
6/10/2014 3,104.146 0.000
7/10/2014 3,471.978 1,157.326
8/10/2014 3,439.905 3,439.905
9/10/2014 3,068.071 3,068.071
10/8/2014 2,865.882 2,865.882
11/10/2014 2,460.604 2,460.604
12/9/2014 2,422.748 2,422.748
1/10/2015 2,278.897 2,278.897
2/10/2015 2,233.471 2,233.471
3/11/2015 2,278.897 2,278.897
4/12/2015 2,877.013 2,877.013
5/10/2015 2,952.724 2,952.724
6/10/2015 3,202.570 3,202.570
7/10/2015 4,169.549 2,779.699
TotalFY15 33,642.876 34,017.808
Table14
Inreality,mostutilitieshavemorecomplexreadingcycles.Therefore,ameterlagcorrectionshouldbe
used for each meter reading route. This will require that the auditor determine the volume of billed
consumptionforeachmeterreadingroute,andthenmakingthecorrectioninthemannerasdescribed
above.
Page60
APPENDIXB:LIMITSOFTHEUSEOFPERCENTAGESASPERFORMANCEINDICATORS
The use of percentages as performance indicators can be misleading because they are highly
sensitivetothelevelofcustomerconsumptiondespitethefactthatnochangeinlosslevelsmay
have occurred.xxvi (The level of leakage in a system is unrelated to the volume of customer
consumption.)xxvii
Forexample:
AsshowninTable15below,UtilityAhadaWaterSuppliedvolumeof100MGforYear1.Authorized
Consumptionwas90MG.WaterLosseswere10MG,consistingentirelyofRealLosses(noApparent
Losses).Thus,UtilityAhadRealLossesof10.0%forYear1.
Year2wasespeciallydry,andwitnessedincreasedirrigationuse.Asaresult,customersused10MG
more water, while the leakage volume remained the same. Thus, Utility A had a Water Supplied
volumeof110MGandAuthorizedConsumptionof100MGforYear2.JustlikeYear1,WaterLosses
(allRealLosses)were10MG.However,thepercentlossesdecreasedto9.1%suggestingthatthe
utilitysperformanceimprovedwheninfact,thevolumeofRealLossesdidnotactuallychangeat
all.
LimitsofPercentagesasPerformanceIndicatorsExample
Year1 Year2
A WaterSupplied 100MG 110MG
B AuthorizedConsumption 90MG 100MG
C=AB WaterLosses(allRealLosses) 10MG 10MG
D=C/A WaterLosses(allRealLosses) 10.0% 9.1%
Table15
Page61
FURTHERRESOURCES
AWWAFreeWaterAuditSoftware&AWWAWaterLossControlCommittee
http://www.awwa.org/resourcestools/waterknowledge/waterlosscontrol.aspx

AWWAM36:WaterAuditsandLossControlPrograms,ThirdEdition.2009.
http://www.awwa.org/store/productdetail.aspx?productId=6725

AWWA M6: Water MetersSelection, Installation, Testing, and Maintenance, Fifth Edition.
2012.
http://www.awwa.org/store/productdetail.aspx?productid=39311822
Page62
GLOSSARYOFTERMS
Apparent Losses: The nonphysical losses that occur when water is successfully delivered to the
customer but is not measured or recorded accurately. Apparent Losses can result from customer
metering inaccuracies, unauthorized consumption (theft), or systematic data handling error. Often
referredtoaspaperlosses.xxviii
ApparentLossesperServiceConnectionperDay:Aperformanceindicatorthatdescribesthevolumeof
Apparent Losses in a normalized fashion (gallons per service connection per day), for means of
assessmentovertimeandbetweensystems.
Authorized Consumption: The volume of metered and/or unmetered water taken by registered
customers,thewatersupplier,andotherswhoareauthorizedtodoso.xii
Billed Authorized Consumption: All water, metered and unmetered, that is taken for authorized
purposesandgeneratesrevenuetothewatersupplier.
Billed Metered Consumption: Water that is taken for authorized purposes that is both metered and
generatesrevenueforthewatersupplier.
BilledUnmeteredConsumption:Waterthatistakenforauthorizedpurposesthatisnotmeteredand
generatesrevenueforthewatersupplier.
ChangesinStorage:Theannualvolumetricchangeinstoredwaterthatislocatedwithintheboundsof
thewateraudit.
Current Annual Real Losses (CARL): The volume of water lost to all forms of leakage or spillage. The
ratiooftheCARLtotheUnavoidableAnnualRealLosses(UARL)istheInfrastructureLeakageIndex(ILI).
InfrastructureLeakageIndex(ILI):Aperformanceindicatorthatindicateshowwelladistributionsystem
controls Real Losses (leakage), taking into account its key characteristics, namely the length of water
mains, number of service connections, and pressure. The ILI is a leading benchmark for evaluating
system performance over time and in comparison to other utilities. Mathematically, it is the ratio of
CurrentAnnualRealLosses(CARL)toUnavoidableAnnualRealLosses(UARL).
NonRevenueWater:Waterthatfailstogeneraterevenueforthewatersupplierforanyreason.Non
RevenueWaterincludesApparentLosses(paperlosses),RealLosses(leakage),andUnbilledAuthorized
Consumption.
NonRevenue Water as Percent by Cost of Operating System: A financial performance indicator that
assesses the value of nonrevenue water relative to the annual cost ofoperating the water system. It
should not be deemed an operational indicator, as it does not specifically speak to the level of Real
LossesorApparentLosses.
RealLosses:Physicallossofwaterfromthesystemasaresultofleaks,breaks,orspillagethatoccurs
prior to the point of customer consumption (the customer meter in metered systems; in unmetered
systems,itisthepointoftransferofresponsibility).CustomersideleaksarenotconsideredRealLosses.
Page63
RealLossesperServiceConnectionperDay:Aperformanceindicatorthatindicatesthelevelofleakage
in the water system in a normalized fashion (gallons per service connection per day), for means of
assessmentovertime.
Real Losses per Service Connection per Day per PSI: The same as Real Losses per Service Connection
perDay,exceptthatitisnormalizedforpressure,allowingformoreappropriatecomparisonbetween
systemsofdifferentoperatingpressures.
Revenue Water: Water that generates revenue for the utility. It consists of Billed Authorized
Consumption(andBilledWaterExportedintheexpandedversionoftheWaterBalance).
SystemInputVolume:Thevolumeofwaterthatisintroducedtothewaterdistributionsystemoverthe
auditperiod.Itisequaltothewaterproducedbythewatersuppliersownsourcewaters(Volumefrom
OwnSources),plusWaterImported,plusorminusthenetchangeinapplicablewaterstorage(Changes
inStorage).
Systematic Data Handling Errors: A form of Apparent Loss pertaining to customer consumption and
billingdataerrorinthewaterutilitysbusinessprocessesasaresultoflaxoversight,poorprocedures,or
gaps in information programming and archiving. Specifically, it can be error caused by accounting
omissions, errant computer programming, data gaps, and data entry; inaccurate estimates used for
accounts that fail to produce meter readings; and billing adjustments that manipulate billed
consumptionsoastogeneratearightfulfinancialcreditinsuchawaythatbilledconsumptiondoesnot
reflectactualconsumption.viii
UnauthorizedConsumption:Anywaterthatistakeninanunauthorizedfashion,inotherwordswater
theft.Thismayincludeunpermittedwaterwithdrawnfromfirehydrants,illegalconnections,bypasses
to customer meters, meter or meter reading equipment tampering, or similar actions. A form of
ApparentLoss.xxix
Unavoidable Annual Real Losses (UARL): The UARL is a theoretical reference value representing the
technical low limit of leakage that could be achieved if all of todays best technology could be
successfully applied, given the pipeline mileage, service connection density, and average operating
pressure of the system. It serves as the denominator in the ratio that determines the Infrastructure
LeakageIndex.viii
TheformulaforcalculatingtheUARLis:
UARL(gallons/day)=(5.41Lm+0.15Nc+7.5Lc)xP
WhereLmisthelengthofmainsinmiles
WhereNcisthenumberofactiveandinactiveserviceconnections
WhereLcistheaveragelengthofcustomerpiping
WherePistheaveragesystemoperatingpressure
Multiplytheresultby365todeterminetheannualvolume.
Unbilled Authorized Consumption: All water, metered and unmetered, that is taken for authorized
purposesanddoesnotgeneraterevenueforthewatersupplier.
Page64
UnbilledMeteredConsumption:Waterthatistakenforauthorizedpurposesthatismeteredanddoes
notgeneraterevenueforthewatersupplier.
UnbilledUnmeteredConsumption:Waterthatistakenforauthorizedpurposesthatisnotmeteredand
doesnotgeneraterevenueforthewatersupplier,suchassystemflushing.
VolumefromOwnSources:Thevolumeofwaterwithdrawnfromwaterresources(rivers,lakes,wells,
etc.)controlledbythewaterutility,andthentreatedforpotablewaterdistribution.vii
WaterExported:Bulkwatersoldtoneighboringwatersystemsthatexistoutsidetheservicearea.vii
Water Imported: Bulk water typically purchased from a neighboring water utility or regional water
authority,whichismeteredatthecustodytransferpointofinterconnectionbetweenthetwoutilities.
Alsoknownasimport,purchasedorwholesalewater.vii
WaterLosses:ConsistsofRealLosses(leakage)plusApparentLosses(paperlosses).Canalsobederived
bysubtractingAuthorizedConsumptionfromWaterSupplied.
Water Supplied: The volume of treated and pressurized water input to the retail water distribution
system.vi
Page65
ENDNOTES
i
http://www.water.ca.gov/wateruseefficiency/sb7/
ii
http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB1420
iii
http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB1420
iv
AmericanWaterWorksAssociation.M36:WaterAuditsandLossControlPrograms,3rdEdition.2009.
v
http://www.awwa.org/resourcestools/waterknowledge/waterlosscontrol.aspx
vi
AmericanWaterWorksAssociation.M36:WaterAuditsandLossControlPrograms,3rdEdition.2009.p275.
vii
AWWAFreeWaterAuditSoftware,Version5.0,Definitions.
viii
ix
Ibid.p21.
x
Ibid.p21.NotethattheformulainthismanualproducesavalueofoppositesignfromtheformulaintheM36
manual.ThisisduetotheparticularsetupoftheAWWAsoftware.
xi
Ibid.p25.
xii
AmericanWaterWorksAssociation.M36:WaterAuditsandLossControlPrograms,4thEdition.Tobepublished.
Chapter3.
xiii
Ibid.
xiv
Ibid.p28.
xv
Ibid.p30.
xvi
Ibid.p38.
xvii
Ibid.p70,71.
xviii
Ibid.p49.
xix
Chapter3.
xx
xxi
Ibid.p47.
xxii
Chapter3.
xxiii
xxiv
Ibid.p55.
xxv
Ibid.p4,8.
xxvi
Ibid.p52.
xxvii
Ibid.p95.
xxviii
American Water Works Association. M36: Water Audits and Loss Control Programs, 4th Edition. To be
published.Chapter3.
xxix
Page66

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CaliforniaDepartmentofWaterResources:

The concept of unaccountedforwater has been formally abandoned by AWWA as an effective

Operational performanceby improving understanding of the distribution system, reducing

The AWWA Free Water Audit Software does not provide a

Because the AWWA Free Water Audit

Authorized Consumption: The volume of metered and/or unmetered water taken by

1. If your billing system utilizes Advanced Metering Do not confuse exports to

Makesurethatvolumetricunitswithin thebilling databaseareconsistent.Someutilities havemeters

The following example introduces the concept of correcting for

Itisrecommendedthatyouthoroughlyreviewthe GradingMatrixincludedintheAWWA FreeWater

Itisrecommendedthatyouthoroughlyreviewthe GradingMatrixincludedintheAWWA FreeWater

Itisrecommendedthatyouthoroughlyreviewthe GradingMatrixincludedintheAWWA FreeWater

Unbilled unmetered consumption consists of those uses

Itisrecommendedthatyouthoroughlyreviewthe GradingMatrixincludedintheAWWA FreeWater

As shown above, Apparent Losses consists of Unauthorized Consumption, Customer Metering

Customer Metering Inaccuracies: Inaccuracies in registering water consumption by retail customer

Itisrecommendedthatyouthoroughlyreviewthe GradingMatrixincludedintheAWWA FreeWater

It is simply not practical to inspect and test every single TestingBeforeInstallation

The next step is to identify the volume of consumption

High(1015gpm) 34.2% 26,946.454 9,215.687 99.20% 74.320

GCWDLargeMeterErrorExample What if my utility does not have any

Real Losses (Current Annual Real Losses or CARL)

Average operating pressure: psi

If there are >32 service connections

The AWWA software is set up such

*** YOUR SCORE IS: 73 out of 100 ***

Apparent Losses per service connection per day: 23.75 gallons/connection/day

WheredoIfindUnaccountedforWater? Where do I find percent

The examplebelowintroducestheconceptwitha verysimple meterreadingschedule: where meters

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* YOUR SCORE IS: 73 out of 100 *