Customer-Side Water Leaks: Achieving the best outcome

By Callie Smith (Winter Intern @ Valor Water Analytics) and Janani Mohanakrishnan (Chief Delivery & Product Officer @ Valor Water Analytics)

The average city water utility in the United States loses up to 30% of their water through leaks and unbilled usage, according to Navigant Research. Many of these leaks are on the customer-side. Given this high annual water and revenue loss, why do some leaks go unfixed even when they’re identified? What additional role can utilities play to achieve the best outcome of none to very few customer leaks.


Let’s first consider the system in which we’re operating. Water leaks can occur on the utility side (transmission and distribution networks) or on the customer side. Water utilities are typically responsible for any leaks leading up to the retail water meter (assuming the water meter is curbside), whereas customers are responsible for leaks that occur within the bounds of their property. Accountability for customer-side leaks becomes more convoluted when factoring in the customer classification, e.g. multi-family residential buildings or mobile homes. The duties of owners and tenants can vary by state, and lease contracts are highly variable.

Split ownership can interfere in the resolution of known issues, as exemplified by a water quality issue that occurred in Providence, Rhode Island, last summer. Prompted by the lead water crisis in Flint, Michigan, North Providence & Providence Water announced last summer that they would reduce the number of lead water lines serving residential properties. The water utility was responsible for replacing lead lines from the water main in the street to the curb, but was not allowed to spend ratepayer funds on private property. The North Providence program was set up to finance replacement of the pipes from the curb to the water meter. As the program was unable to pay for any old plumbing ‘behind the water meter,’ residents were faced with potentially paying for customer-side lead service line replacements and any other internal lead fixtures, a cost ranging from $3,000 to $10,000, as estimated by the EPA. Many customers could not pay these amounts, and since the risk of partial lead replacements could actually increase levels of lead contamination in the water, the Providence Water Board halted the lead pipe replacement program.


So how can we bridge this ownership gap when it comes to customer leaks? There appears to be three main reasons why customer leaks continue unchecked: (a) lack of leak data analysis and notifications, (b) lack of information on customer responsibilities (especially in apartment/landlord/tenant cases), and (c) lack of financial programs or incentives from water utilities or cities for quick resolution.

Many utilities conduct customer leak analysis – either in house or through an external partner. Leak information, once available, needs to be packaged in a way that then inspires customers to action. Valor Water Analytics provides leak detection through our Hidden Revenue Locator solution, for 10+ clients across the USA. We notice that >50% of customer leaks self-resolve in a day or two, and have determined that it is more valuable for customers to be alerted only of ‘longer drips’ or ‘major leaks.’ In addition to reducing the amount of notifications, the mode of communication also plays an important role in inspiring action. The average water utility customer still likes to be notified of leaks via phone.

East Bay Municipal Utility District conduced a social study to test customer response to a home water report service that integrated water use data, norm-based evaluations, and educational suggestions about water use. The study found that those using the customer portal were more likely to conserve water and participate in the municipality’s rebate and audit programs. The study did not specifically consider customer response to leaks; however, it did find that more digestible notifications and evaluations resulted in improved customer action.

Since utilities have intimate knowledge of customer water consumption, utilities could easily provide information on customer responsibilities, while sending out leak notifications. Let’s say a major leak was detected from water meter readings for a rented home. Responsibility between the tenant and landlord depends on state laws and lease agreements, a fact that could be mentioned to the resident upon notification of the leak. The utility could also offer information on leak severity (in gallons and dollars), and a survey for the resident to narrow down the potential location of the leak within their property. Additionally, utilities could provide customers with a list of plumbers, typical costs, and information on any financial programs applicable to their situation. Water utilities with conservation targets have taken the lead in providing some of these supplementary measures for customer-side leaks. It will be interesting to see if this becomes a standard for all water utilities in the future.


In conclusion, there is a multitude of factors – economic, environmental, social — that influence how customers respond to water issues. Knowledge is the first step towards addressing these issues, however, policy changes and a shift in our thinking around water use can be a great help in reducing customer-side leaks. Valor Water Analytics is helping this goal by partnering with utilities to provide information to residents, in a way that will incentivize people to take action on their customer-side leaks, and save them from expending a precious resource.