TAMRMS#: B06
6.4
Information Item Only
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Non-Revenue Water Update
Presented by: Tim Saunders, Director, Public Operations
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SUMMARY
The following agenda report relates to Non-Revenue Water, commonly referred to as “Water Loss”. Non-Revenue Water is the term used for the volume difference between water produced or purchased from source and the direct volume that is billed to Water Utility rate payers.
ALIGNMENT TO COUNCIL DIRECTION OR MANDATORY STATUTORY PROVISION
Water Bylaw 5/2001 (Amendment 25/2025)
BACKGROUND AND DISCUSSION
Please see below an explanation of what “water loss” means, how it affects the Utility budget, and how it is being addressed in the 2026 Utility Rate Model.
What is Water Loss?
The City of St. Albert purchases all of its drinking water from EPCOR (including a small portion indirectly through the Town of Morinville) as part of the Regional Water Customers Group. The volume purchased is measured by EPCOR meters as water enters the City.
The City then bills approximately 23,000 customer locations based on individual water meters at homes and businesses.
“Water loss” is the difference between:
• The total amount of water purchased (measured at the EPCOR meters), and
• The total amount billed to customers (measured at individual customer meters).
All water utilities experience some level of water loss. It is not unique to St. Albert.
What Causes Water Loss?
Water loss can occur for several reasons:
• Leaks and breaks in underground water infrastructure
• Unmetered municipal uses (such as firefighting, hydrant flushing, sewer flushing, street sweeping, and watering of public spaces)
• Aging water meters that under-report usage
• Unauthorized consumption (e.g., bypassing meters or unauthorized hydrant use)
Impact on the Water and Wastewater Budget
The City pays for every cubic metre of water it purchases from EPCOR, whether it is ultimately billed to a customer or not.
Similarly, the City pays Arrow Utilities to treat wastewater. The rate paid to Arrow is based on the volume of water purchased from EPCOR, not the volume billed to customers.
This means water loss affects both:
• The water utility budget, and
• The wastewater utility budget.
If water loss is not accounted for in rates, the Utility incurs a deficit. To prevent this, a percentage for water loss is built into the Utility Rate Model so that revenues match expenses over time.
St. Albert’s Performance: Very Strong Results
The good news is that St. Albert performs very well compared to industry benchmarks.
Water loss trends in recent years:
• 2016 - 10.0%
• 2017 - 5.5%
• 2018 - 6.4%
• 2019 - 8.6%
• 2020 - 6.7%
• 2021 - 6.5%
• 2022 - 2.7%
• 2023 - 4.0%
• 2024 - 3.9%
• 2025 - 3.5%
St. Albert is currently at approximately 3.5-4% water loss, which is very low by industry standards.
For perspective:
• EPCOR uses a benchmark target of approximately 23% system-wide (North American average), and typically reports 5-8% within the Edmonton system.
• The City of Calgary reported approximately 22% water loss in 2024.
Although our percentage is low, the financial impact is still significant. The City uses close to 6 million cubic metres of water annually. Even 3.5-4% of that volume represents several hundred thousand dollars per year.
Illustrative Example (Simplified)
To clarify how this works in practice:
• The City purchases approximately 6 million m³ of water annually (measured at EPCOR meters).
• Approximately 5.8 million m³ is measured at individual customer meters and billed to customers.
• The difference (approximately 4%) represents system water loss.
If the direct cost of the 5.8 million m³ billed to customers equated to $50 per household per month, that amount would reflect only the water actually recorded at customer meters.
However, the City must pay for the full 6 million m³ purchased. To ensure the Utility recovers the full cost of purchased water and wastewater treatment, an additional amount (say $2 per household per month) would be built into rates to account for the 4% system water loss. This would mean that a customer gets billed $52 per household per month.
In practical terms:
• If actual water loss exceeds 4%, the Utility would experience a financial shortfall.
• If actual water loss is less than 4%, the Utility would experience a surplus (positive variance).
2026 Rate Adjustment
The City began incorporating some water loss into rates in 2023. However, only a small portion was reflected in the rate model.
For 2026, the Utility Rate Model includes 4.0% water loss within the variable water and wastewater rates. This better aligns rates with actual system performance and reduces the risk of budget variance.
Conclusion
Water loss is a normal and unavoidable aspect of operating a municipal water system. The key issue is whether it is well managed and responsibly accounted for in rates. St. Albert’s water loss levels are low by industry standards and have shown consistent improvement. Including 4.0% in the 2026 rate model reflects both prudent financial management and confidence in the continued strong performance of our system.
STAKEHOLDER COMMUNICATIONS OR ENGAGEMENT
N/A
ALIGNMENT TO PRIORITIES IN COUNCIL’S STRATEGIC PLAN
Initiative aligned with Strategic Plan:
Not Applicable
ALIGNMENT TO LEVELS OF SERVICE DELIVERY
C.5.2 Water Supply and Distribution Management - Supply, operation and maintenance of the distribution of drinking water and other water systems within the City of St. Albert.
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Report Date: April 14, 2026
Author(s): Regan Lefebvre, Tim Saunders
Department: Public Operations
Department Director: Tim Saunders
Managing Director: Dinu Alex
Chief Administrative Officer: William Fletcher