Non-Revenue Water (NRW)

Non-Revenue Water (NRW) is a critical KPI for water utilities, reflecting the volume of water produced but not billed to customers.

High NRW levels can indicate inefficiencies in operations, impacting financial health and service delivery.

Reducing NRW can lead to significant cost savings and improved operational efficiency, ultimately enhancing customer satisfaction.

Effective management reporting and strategic alignment around NRW can drive better business outcomes.

Organizations that prioritize NRW reduction often see improved forecasting accuracy and better ROI metrics.

Non-Revenue Water (NRW) Interpretation

High NRW values signify substantial losses due to leaks, theft, or inefficiencies in billing processes. Conversely, low NRW levels indicate effective water management and operational efficiency. Ideal targets typically range below 15% for most utilities.

• <10% – Excellent performance; indicates strong management practices
• 10%–15% – Acceptable; requires monitoring and potential improvement initiatives
• >15% – Concern; necessitates immediate investigation and action

Non-Revenue Water (NRW) Benchmarks

We have 7 relevant benchmark(s) in our benchmarks database.

Common Pitfalls

Many utilities overlook NRW as a lagging metric, failing to recognize its impact on financial ratios and operational efficiency.

• Neglecting regular audits of water distribution systems can lead to undetected leaks. Aging infrastructure often harbors hidden issues that escalate costs and waste resources over time.
• Inadequate staff training on billing practices can result in errors. Miscommunication between departments may cause discrepancies, leading to lost revenue and customer dissatisfaction.
• Ignoring customer feedback on service quality can mask underlying problems. Without structured feedback loops, utilities may miss opportunities for improvement.
• Overcomplicating billing structures can confuse customers and hinder payments. Clear, straightforward invoices help ensure timely revenue collection.

Improvement Levers

Reducing NRW requires a multifaceted approach that targets both operational processes and customer engagement.

• Implement advanced metering infrastructure to enhance data accuracy. Smart meters provide real-time insights, enabling quicker detection of leaks and billing discrepancies.
• Conduct regular leak detection surveys to identify and repair issues proactively. Utilizing technology like acoustic sensors can significantly reduce water loss.
• Enhance staff training on customer service and billing accuracy. Empowering employees with the right tools and knowledge fosters accountability and improves customer interactions.
• Engage customers through awareness campaigns about water conservation. Educating the public can lead to reduced consumption and improved payment behaviors.

Non-Revenue Water (NRW) Case Study Example

A leading water utility faced a staggering 25% NRW, resulting in millions in lost revenue annually. The executive team recognized the urgent need for action, initiating a comprehensive NRW reduction program. This program included upgrading aging infrastructure, implementing smart metering technology, and enhancing staff training on customer engagement.

Within 18 months, the utility reduced NRW to 12%, translating to an annual savings of $5MM. The introduction of smart meters allowed for real-time monitoring, significantly improving billing accuracy and customer satisfaction. Additionally, the utility launched community outreach programs to educate residents on conservation, fostering a culture of responsibility.

The success of the NRW initiative not only improved financial health but also positioned the utility as a leader in sustainable water management. Enhanced operational efficiency led to better resource allocation and reduced reliance on external funding. The project demonstrated the value of a data-driven decision-making approach, aligning strategic goals with community needs.

Related KPIs

KPI Categories

This KPI is associated with the following categories and industries in our KPI database: