Economic Leak Loss Model

Project: Using multidisciplinary research, CWEE developed an economic model to support California’s development of water loss performance standards that also evaluates the cost-benefit analysis of the model. Researchers analyzed the model’s performance using data from over 800 utilities across four U.S. states to evaluate the potential of leak loss reduction as a cost-effective tool for urban water management compared to more traditional management methods. The research focused on what a leak loss standard would require to produce in order to achieve an economically efficient benefit for specific utilities.

Preliminary results: CWEE’s economic model found that on average, urban water utilities report 17% of their water is lost before reaching end users. Identifying, mitigating, and repairing leaks can be costly if done without an analysis to maximize net benefits. Preliminary research results show water loss reduction is more economically beneficial than traditional water management tools (e.g., conservation or developing a new water sources), but the quantity of water conservation that can be beneficially reduced varies across utilities. This model has been compared to five others including one developed by the State Water Resources Control Board.

Next Steps: CWEE is seeking funding from stakeholders to perform its economic model analysis specific to California water utilities. Comparing all models, our researchers will identify the cost of maintaining a water loss standard, conduct a sensitivity analysis, calculate the aggregate water savings on a statewide level, calculate the distribution of water loss standards, and discuss model structure and the impact of leak loss standards and costs.

Geographical location of study: California