The Kentucky Public Service Commission (PSC) has issued a revised form for water utilities under its jurisdiction to use in calculating and reporting water loss.
Under an order issued Friday, jurisdictional water utilities that are under a specific PSC directive to report water loss — at least 28 at present — are required to begin using the new form immediately. All other water utilities are encouraged to begin using the new form immediately, but will be required to do so once the PSC revises its regulations to require its use. PSC records show that Mountain Water District is one of those districts.
The PSC said in a statement that the agency recently has placed greater emphasis on the problem of unaccounted for water loss — water that a utility produces or purchases, but which is neither recorded as sold to customers nor used internally by the utility or by others in accordance with the utility’s terms of service. Most unaccounted for water loss is due to system leaks, line breaks or other operational or infrastructure problems.
PSC regulations cap water loss at 15 percent for purposes of rate calculations. Water loss above that level represents a financial loss to the utility.
When it opened the case in December 2018, the PSC noted that many utilities have difficulty calculating their water loss and that methodologies vary across utilities. The form is intended to make the process more straightforward and provide consistency in reporting, the PSC said today.
While most water utilities in Kentucky report water loss at close to or below 15 percent, a substantial number regularly exceed that figure, with a handful regularly reporting water loss in excess of 50 percent.
“Excessive water loss is a potential warning sign of the deteriorating financial health and well-being of jurisdictional water utilities,” the PSC said in the order. “Water loss is lost potential revenue, and excessive water loss can have many negative effects, from higher rates for consumers to the ultimate failure of a utility.”
Utilities agreed that knowing and monitoring water loss is essential to operating a utility in a safe, efficient and financially sustainable manner, the PSC said.
Over the course of the proceeding, the PSC received comments and suggestions from nearly all jurisdictional water utilities — water districts, water associations and investor-owned utilities. No party to the case requested a hearing, leaving the PSC to make its decision on the basis of the written record.
Comments from jurisdictional water utilities generally supported the reporting form and process proposed by the PSC. Most also stated it would be reasonable to require the form be used in order to bring consistency to how water loss is measured and reported.
A number of utilities proposed that other factors be used in reviewing water loss. The PSC noted that utilities can request exemptions from the 15-percent rule, but bear the burden of proof for showing the deviation is reasonable.
The PSC said it will provide training for water utilities in how to perform the calculations.