PSC opens investigation of utilities with high water loss

Utilities can’t account for more than 35% of water they produce or purchase

Kentucky Public Service Commission has set new base rates for the two largest electric providers in Kentucky.

FRANKFORT, Ky. (WTVQ) – The Kentucky Public Service Commission says it has opened a case to investigate the operations and finances of water utilities that are unable to account for 35 percent or more of the water that they produce or purchase.

In an order issued Tuesday, the PSC directed a dozen utilities – ten water districts, one water association and a division of one investor-owned utility – to provide extensive information regarding their operational practices and efforts to reduce water loss.

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The PSC says that water loss is defined as the difference between the quantity of water that a utility produces at its own treatment plants or purchases from another producer and the total amount of water that is sold, used by the utility, used for fire protection or otherwise accounted for. Leaks in the system, line breaks, theft, unauthorized usage and metering inaccuracies all contribute to water loss.

A water loss of no more than 15 percent is considered acceptable under PSC regulations. Utilities are allowed to factor only a loss of 15 percent or less into their rates, meaning that water loss above that level represents a financial loss to the utility.

In Tuesday’s order, the PSC noted that it is placing a greater emphasis on reducing water loss and that it views “excessive water loss as a potential warning sign as to the financial health and operational well-being of water utilities.”

The PSC has, in recent rate orders, directed utilities with excessive water loss to take reasonable actions to address the problem.

Two utilities – Martin County Water District and Cannonsburg Water District – are the subjects of current PSC proceedings that include investigations of their excessive water loss.

Tuesday’s PSC order includes a list of 45 questions that the utilities must respond to by April 12. In addition, those utilities that buy or sell water at wholesale must provide copies of the applicable contracts and related documents by March 22.

Tuesday’s order is available on the PSC website, The case number is 2019-00044. Records in the other cases are also on the PSC website. The case numbers are 2014-00267 (Cannonsburg Water District), 2016-00142 (Martin County Water District), and 2018-00394 (water loss reporting).