The Key to Thwarting Non-Revenue Water? Understanding It

water faucet with dollar sign

By Jeff McCracken

Non-revenue water loss is among the biggest challenges facing the water industry and the world. Nearly one-third of all water, amounting to $39 billion annually, is lost before it ever reaches a customer, according to a report from Frost & Sullivan. Water scarcity will proliferate with the aging water infrastructure, rapid urbanization and worsening disaster seasons throughout the world.

Bodies like the U.S. Environmental Protection Agency (EPA) are doing their part to make strides toward improved infrastructure. Earlier this year, the agency announced the availability of $2.7 billion in funding to support infrastructure projects that help protect surface and drinking water. However, with AWWA’s estimated cost of more than $1 trillion to manage water infrastructure over the next 25 years, the responsibility must fall to the industry to understand these challenges and prepare a strategy to understand and respond to them.

Battling Aging Infrastructure

A majority of water infrastructure in North America is more than half a century old. As a result, leaks are all too common and major contributor to the non-revenue water problem. The external stressors of rapid urbanization and population growth additionally weigh on our already outlived infrastructure.

According to the American Society of Civil Engineers, an estimated 56 million or more new users are expected to be connected to centralized treatment systems in the next two decades. In tandem, regulatory bodies will likely continue to increase requirements around water conservation.

Between the high cost of reacting to pipe leaks associated with dispatching crews and physical water loss, the cost of regulatory non-compliance, and the still much higher cost of replacing infrastructure entirely, our best option as an industry is optimized asset management. Real-time insights across the water distribution system enabled by sensor and data analytics technology assist water utilities in making informed decisions about management and reacting more instantaneously to issues as they crop up. In one example, an Itron customer was able to identify a million-gallon water tank draining rapidly and subsequently lower their water losses from 22 percent to just 5 percent with data analytics and management.

Especially with consideration for longer and stronger drought, fire and hurricane seasons, a granular and continuous level of insight and management capability should be the baseline for every water utility – and the benefit doesn’t stop at preventing revenue loss.

Understanding Usage Patterns

Beyond physical water loss prevention, improved analytics provide the added value of deepening understanding of water use within a utility’s customer base. The ability to understand usage has massive implications, both from a revenue and customer service perspective. Similar to aging infrastructure challenges, the stakes are significantly heightened by rapid urbanization throughout the world.

According to the United Nations, “Urban areas are expected to absorb all of the world’s population growth over the next four decades…the vast majority of these people will be living in overcrowded slums with inadequate, often non-existent, water and sanitation services. Therefore, extending these services to the millions of urbanites currently unserved will play a key role in underpinning the health and security of cities, protecting economies and ecosystems and minimizing the risk of pandemics.”

With that knowledge, understanding usage patterns is two-fold. First, it will be critical to maintain operational efficiency and sustainability to keep up with demand in urban areas. Second, it will allow for utilities to properly service and bill their residents, which works bidirectionally to improve customer relationships and to keep the utility abreast of any apparent losses resulting from failure to accurately bill for water use, whether that be negligent or due to theft.

Identifying Theft

Water theft’s costs are significant to a utility’s bottom line, to the environment, and to the safety of communities at large. When a water flow is illegally diverted, costs are often passed on to other customers through higher rates, increasing their bills. Further, accessing water without authorization through a fire hydrant or tapping into a sprinkler system can cause physical damage that creates larger public safety issues or even reduced water pressure enough that fire departments are unable to effectively do their jobs: this is a major concern as fire seasons across the globe increase in severity. Additionally, in regions where water scarcity is a pressing threat, water theft only serves to accelerate the resulting public health crisis.

Data analytics combined with smart sensors able to detect sound frequencies can “listen” to water’s movement to help disaggregate water loss. This in turn helps utilities to discern negligent water loss from apparent theft. With this information in hand, utilities have more insight into how these losses transpired to help curtail theft or misuse—enabling safer communities and preservation of costs and resources in the process.


The price of failing to solve non-revenue water loss is already very high. Challenges contributing to revenue loss here are rising by the day with continued climate change, population growth and increased regulatory scrutiny.

With that said, the utility industry must not lose sight of the fact that the challenge of water scarcity transcends the question of finances. Water loss is a human issue. Thankfully, with a commitment to adoption of modern strategies supported by the technology advancements of cloud-based infrastructure, utilities can forge ahead to solve this great challenge, and perhaps become smarter and better equipped partners to their communities in the process.

Jeff McCracken is director of operations management outcomes at Itron. He provides global leadership for software and services solutions that incorporate big data technology, industry expertise and advanced algorithms to deliver business intelligence and predictive analytics to Itron’s utility customers.

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