The Real Cost of Real Loss

Cost of water main breaksPotentially recoverable real losses in water systems cost real money.

As a water community, we have adopted some general practices for estimating that cost and calculating the approximate economic level of real losses. The focus, however, has been on the production cost of water; applying the logic that real losses do not influence sales and to that end should be viewed economically as an increase to the production cost. The latest thinking incorporates more thoroughly the direct and indirect costs of production. As the aging infrastructure pandemic spreads, so will the geographic footprint of real losses and the costs associated with them.

A problem that utilities have in establishing the cost of real losses is that they have traditionally been understated. It was not until recently that the indirect costs associated with production were integrated as part of the calculation. While it is now acceptable for leakage to be valued at retail cost when conservation measures are in effect, the real cost has continued to remain elusive. Just today, we are beginning to recognize that the cost of water main breaks themselves should be included in the calculation. By including the cost of the consequences of water main failures, the direct and indirect cost of production we are moving toward the real cost of real losses.

The cost of water main breaks, however, can be difficult to estimate. The reason for this is that there are soft societal costs, which are not paid by the utility such as, the cost of, lost productivity due to traffic delays or damage to property that is paid by the owner?s insurance. In fact, the bulk of societal costs are related to property damage caused by flooding. However, AwwaRF (now the Water Research Foundation) noted that while there were weak correlations between pipe size and the total cost of the water main break, there was a stronger relationship between total cost of water main breaks and the time to contain them (duration). They went on to note an even stronger relationship between gallons lost and the total cost.?

For any given water main break, the duration of the event is directly proportional to gallons lost. This means that reducing the duration of water main breaks will have a corresponding effect; reducing the total cost of the water main break. One way to reduce the duration of water main breaks is to be very good at responding to them. There are several measures as to quantifying a utility?s ability to respond to these events and they range from ingestion of the call to dispatching of the valve crew with the right tools to knowing which valves are usable.

A good response is characterized by how well the utility interacts with the valves and the business systems they use to manage them.

Valve Systems
Valves are usable when they can be located, accessed and mechanically operated. Most utilities have varying degrees of usability as a percentage of the total population of valves, which would be used to isolate pipe segments. When the percentage of usable valves is high, the average footprint of water main breaks is smaller. Subsequently there are fewer valves required for operation which reduces the duration and cost of water main breaks. When valves are not usable, utilities have to decide whether it is necessary to repair or replace them. However, in the meantime, simply knowing which ones are usable and which ones are not has a positive effect reducing the duration of the event by preventing valve crews from going to valves that are not usable for isolation.

Conveying valve usability to field crews requires a usable business system. That is to say, one that is complete with system wide coverage, current, accurate, adequately detailed, integrated with systems it shares information with and accessible to everyone who needs it. Few systems are perfectly usable, but finding an acceptable level of usability is important to the decision making process. Faster decisions about the tools that are needed, knowing specifically where to go and the order of field operations during the isolation saves time. As a result, it reduces the duration of the event. Under ideal circumstances, field crews isolate water mains without going to valves that are known to be inaccessible or have mechanical problems.
It can be difficult to prioritize the repair or replacement of valves that are not usable but in general, the necessity of usability can be determined by examining the isolation of pipe segments connected on either side of the valve in two states; when the valve us usable and when it is not. When changing the state causes a substantial change in the isolation, then the usability of the valve is more necessary. When the necessity of usability for a given valve is high and when the probability of a connected pipe?s failure is high, it is necessary to take some action to either repair or replace the valve. Valves should be replaced when the normalized cost (the cost of the repair divided by the probability of its success) is approaching the cost of replacement.

Real Losses
Real water losses in the system are symptomatic of aging infrastructure and water main breaks. As the infrastructure leakage index (ILI) raises, in many utilities, so does the consequences of water main failures. In other words, given the relationship between gallons of water expelled in failures and the cost of water main breaks, higher ILI can mean higher costs per event. Water main breaks in the system can be approximated as: ILI2 x miles of pipe/100. This is to say that lower leakage means fewer water main breaks, fewer consequences and lower costs.

A challenge with active leakage control is that it typically relies heavily on the human ear. Even when ambient noise levels are low, there are inaudible leak sounds. A new focus for active leakage control programs to focus on a broad acoustic spectrum using loggers and correlators, while seemingly expensive, tend to return better results and may be necessary in critical areas. Some pipe failure modes are not prone to leakage before catastrophically failing, placing an emphasis on the need to mitigate the consequences of those failures through active valve and information usability improvement programs. The design of these programs should also be focused on the criticality of pipe segments and pressure boundaries. Pipe criticality is coincidental with the cost of water main failures as the potential for heavy direct and societal costs are high in those areas.

The real cost of real water loss encompasses the all-in cost of production and water main breaks. Those costs can be controlled by reducing the probability of failures through active leakage control, pressure management and pipeline replacement. They can be further reduced by interacting with the water distribution system valves and business systems in such a manner as to allow for better response to events when they occur. In an operating environment where infrastructure is reaching its useful life at a greater quantity annually than it is being renewed, actively controlling the cost of real water losses carries a greater importance today than ever before, and a good first step is understanding those costs.

Dave Lewis is senior accounts manager at Wachs Water Services.

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