Water Loss Thresholds

For additional information, please contact TWDB's Water Loss Audit team at WLA-Group@twdb.texas.gov or 512-463-0987.

What is the history on water loss thresholds?

The 83rd Texas Legislature passed HB 3605 (2013) requiring the TWDB to establish water loss thresholds for utilities applying for financial assistance for drinking water projects. Utilities whose water loss meets or exceeds its threshold must use a portion of the funding to implement water loss mitigation measures, such as leak dection survey or pipe or meter replacement. Additionally, the 84th Texas Legislature passed House Bill 949 (2015) authorizing the TWDB to waive this requirement if, at the utility's request, TWDB determines that the utility is satisfactorily addressing its water loss.

TWDB established thresholds for both apparent loss (unauthorized consumption, meter inaccuracies, billing data errors) and real loss (leaks, overflows, and other physical losses from the distribution system such as mainline, storage tanks, and service connections).

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When were the first water loss thresholds approved?

The TWDB approved the initial water loss thresholds in 2014 based on statewide data from 2010 water loss audits and industry-standard water loss metrics available at the time. The thresholds were later reevaluated using quality-controlled statewide data from 2015 to 2020 water loss audits and updated performance indicators developed by the American Water Works Association Water Loss Control Committee, a group of water industry leaders in water loss. These updated indicators and methods, which primarily affect real loss calculations (water loss due to leaks and breaks, including unknown loss), were incorporated into the revised rules and threshold methodology.

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What are the current water loss thresholds?

The TWDB revised its water loss thresholds in 2023, replacing the population-based approach adopted in 2014 with a methodology based on service connection density. Using quality-controlled water loss audit data from 2015 through 2020, TWDB determined that separate thresholds for low-density and high-density systems provided a more equitable and streamlined approach to evaluating real water loss. These changes also addressed concerns that some utilities with high volume of real loss who were not previously affected by the thresholds. Large wholesale water volumes sold to another retail water provider continue to be considered when calculating a utility’s real loss threshold.

The current thresholds, approved by TWDB in February 2023, and applicable to retail public utilities seeking financial assistance for a water supply project after July 1, 2023, are:

    Service connection density  

    		 Apparent water loss threshold  Real water loss threshold  

    >= 32 connections per mile 

    		 A system-specific calculation based on customer meter accuracy limit of 94.7 percent and default values for unauthorized consumption and data handling error volumes.  30 gallons per connection per day 

    < 32 connections per mile 

    		 A system-specific calculation based on customer meter accuracy limit of 94.7 percent and default values for unauthorized consumption and data handling error volumes.  57 gallons per connection per day 

How is apparent water loss thresholds calculated?

The apparent loss threshold estimates the amount of water that may be lost through meter inaccuracies, unauthorized consumption, and data handling errors under normal operating conditions. It is expressed in gallons per connection per day and is calculated using utility-specific data.

    L_(Am )=((0.053×V_m )+(0.0025×V_i )+(0.0025×V_i ))/(365×N_c )

Where:

  • V_m (Billed Metered Volume): The volume of water that is metered and billed to customers. The factor 0.053 assumes customer meters are 94.7% accurate, allowing for an estimated 5.3% under-registration of billed consumption.
  • V_i (System Input Volume): The total volume of water entering the distribution system. It is used to estimate:
    • Unauthorized consumption, assumed to be 0.25% of system input volume; and
    • Systematic data handling errors, assumed to be 0.25% of system input volume.
  • N_c (Number of Connections): The total number of service connections in the utility's system. Dividing by the number of connections and by 365 days converts the allowable annual apparent loss volume into a daily loss per connection.

Together, these components establish a utility-specific apparent loss threshold based on industry-standard assumptions for meter accuracy, unauthorized consumption, and data handling errors.

How is real water loss thresholds calculated?

For real loss, a utility's service connection density determines the applicable threshold. The thresholds were developed using quality-controlled water loss audits submitted from 2015 through 2020 and are based on the median real loss for utilities with 32 or more service connections per mile and those with fewer than 32 service connections per mile. These categories provide separate thresholds for high-density and low-density systems.

How is wholesale adjusted for in thresholds?

Because some utilities sell significant volumes of water wholesale to other water providers, TWDB applies a wholesale adjustment when calculating real loss. This adjustment recognizes that a portion of the water entering the system is delivered to wholesale customers and is not associated with the utility's retail service connections.

For utilities with wholesale water sales, adjusted real loss is calculated as:

    L_R = (1 – WF) x L(Rn )

Where:

  • L_R= Adjusted Real Loss (gallons per connection per day)
  • WF= Wholesale Factor
  • L_Rn= Normalized Real Loss (gallons per connection per day)

The wholesale factor is calculated as:

    WF=Total Wholesale Water Sales /(Corrected Input Volume + Water Purchased)

By reducing normalized real loss according to the proportion of water sold wholesale, the adjustment helps ensure that utilities with substantial wholesale deliveries are evaluated more equitably when determining compliance with real loss thresholds.