NONREVENUE WATER - Current and Future Remedies Gary Harstead Director – Asset Management United Water NARUC Winter Meet

1. NONREVENUE WATER - Current and Future RemediesGary HarsteadDirector – Asset ManagementUnited WaterNARUC Winter MeetingFebruary 2013

2. UNITED WATER TODAY • Water and Wastewater Services • Approximately 5.7 million people served in 21 states • Drinking water provided: 955 million gallons per day • Wastewater treated: 1,205 million gallons per day • 2,300 employees • $3.0 billion in total assets • $800 million in revenues • Wholly owned subsidiary of Suez Environnement since 2000

3. UNITED WATER IN THE US • Water and Wastewater Services • Approximately 5.7 million people served in 21 states • Drinking water provided: 955 million gallons per day • Wastewater treated: 1,205 million gallons per day • 2,300 employees • $3.0 billion in total assets • $800 million in revenues • Wholly owned subsidiary of Suez Environnement since 2000

4. Presentation Summary • Description of the problem • Definitions: Nonrevenue Water, not just Unaccounted for Water • How do the losses occur? • Some solutions • A case study • Plans for the future

5. NRW Reduction Drivers • NRW is a business issue • Lost revenue • Increased operating expenses • NRW is a “Sustainable Development” issue • Waste of water resources • Waste of energy and chemicals • NRW is a Reputation Management issue • NRW is easy to understand for people. It becomes an overall rating of a utility’s competencies • NRW reduction methods • Usually costly and difficult to implement • Have minimal impact as they address one component of NRW at a time • Often require “change” for employees and customers

6. NRW Definition: The percent of water introduced to the distribution network that does not produce revenue: NRW = 1 - Billed Consumption System Input OR NRW = 1- System Input – (Real Losses + Apparent Losses + Unmetered Use) System Input “Unaccounted for Water” does not subtract “Unmetered/unbilled Use” The percent of water introduced to the distribution network that does not produce revenue NRW = 1- System Input – (Real Losses + Apparent Losses + Unmetered Use) System Input Real Losses: Water lost from the network that is not used by a customer, e.g. network leaks, main breaks Apparent Losses: Water that is successfully delivered to the customer, but, for various reasons is not recorded or measured accurately and is subsequently unbilled Unmetered Use: System flushing, fire fighting and other authorized unmetered uses OR NRW = 1 - Billed Consumption System Input

7. Components of NRW NRW = 1- System Input – (Real Losses + Apparent Losses + Unmetered Use) System Input • Real Losses: Water lost from the network that is not used by customers or the utility, e.g. network leaks, main breaks • Apparent Losses: Water that is successfully delivered to the customer, but, for various reasons is not recorded or measured accurately and is subsequently not billed • Unmetered Use: System flushing, fire fighting and other “authorized” unmetered uses that is not billed.

8. Real Losses – Locating and Repairing Leaks • Water system characteristics vary widely due to age, geology, geography, materials and maintenance history. • Leak detection success depends on above AND personnel abilities. • “Traditional” sounding methods most widely used but have limitations. • Advanced leak detection methods are very expensive and application success will vary based on the utility’s distribution system characteristics. • Reactive repairs are expensive and pipeline replacement often due to other drivers, e.g. break frequency, hydraulics and water quality issues. DSIC Programs Help!

9. Apparent Losses – Causes and Solutions Vary • Meter Inaccuracy • Unmeasured Low Flow • Fire Service Line Use • Meter Tampering • Unauthorized taps • Data handling/”Lost” Customers

10. United Water’s Use of “AquaCircle” – A software tool developed by Suez Environnement to identify components of NRW and to make forecasts on NRW reduction based on SE’s worldwide experience of various methods of NRW reduction strategies. PROS • Standardize Methodology – Based on IWA/AWWA Method • Sound Analytical Approach to NRW Assessment and Forecasting • Once up to speed, time-savings on analysis • Established data to judge impact of NRW reducing tasks • Scenarios for NRW reduction and action plan priorities CONS • Detailed & Comprehensive Data Required • Standard Data often needs to be customized to meet tool input needs • May not be ideal for smaller systems • Relatively long “Learning Curve”

11. AquaCircle Assessment Results Table

12. UWNJ Apparent Loss Investigation (Summer 2012) Theft: • Meter Tampering – Data analysis from AMI Van • No Record of Service – Geocoding + field investigations • Illegal Use of Fire Services – Field investigations • Improperly Connected Irrigation Systems Billing Discrepancies: • Lost Meters/RFs – Data analysis and comparison with CC&B • Stopped Meters • Meter Inaccuracies

13. Results of Apparent Losses Investigations • Meter Tampering – 2.5 % • No Record of Service – 0.07% • Illegal Use of Fire Services – 1.0 % • “Lost” Meters/RFs – up to 0.4% • Meter Inaccuracies – 3.5 to 4.0% • Irrigation Systems – 0% Total % of potential revenue that is not billed = 7 to 8%

14. Short and Mid-Term Plan Highlights Apparent Losses: • Expand Apparent Losses Investigations • Advance AMI and MDM software • Improve Meter Age Program where applicable Real Losses: • Continue Enhanced Leak Detection Methods • Create District Metering Areas • Reduce Leak Discovery to Repair Time