Water loss is a prevalent issue for many Tennessee cities that operate water utilities. Typically, municipalities purchase or treat more water than they bill to customers, resulting in unaccounted-for losses. These discrepancies can arise from various factors, including system leaks, meter inaccuracies, and unauthorized usage.

Financial and Operational Implications

Every gallon of water produced but not billed represents a direct financial loss. Municipalities incur costs for labor, chemicals, energy, and infrastructure maintenance for water that doesn't generate revenue. Over time, these losses can strain budgets, leading to higher rates for customers and potential financial instability for the utility.

Regulatory Oversight

The Tennessee Board of Utility Regulation (TBOUR), operating under the Tennessee Comptroller of the Treasury, is responsible for monitoring and addressing water loss issues. According to Tennessee Code Annotated § 7-82-702, a utility system is considered to have excessive water loss if non-revenue water exceeds 40% by volume. Utilities that surpass this threshold are required to develop and implement a water loss mitigation plan, which may include leak detection studies, infrastructure repairs, and system upgrades.

Failure to comply with water loss reporting requirements or to reduce excessive water loss can result in referrals to TBOUR for further action, including potential sanctions or oversight.