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Feature wateronline.com ■ Water Online The Magazine 10 further describes a highly fragmented and complex water sup- ply and regulatory structure. The complexities stem from the sheer volume of regulated community water systems in this country (more than 54,000), as well as the intricate framework of regulatory agencies — often multiple agencies in a given state with varying regulatory jurisdiction, and sometimes agen- cies that regulate water systems across multiple state borders. Further research 6 was conducted by the Alliance for Water Efficiency in 2011-12, revealing that through the network of regulatory agencies, an indication of regulatory momentum is beginning to emerge in the water loss arena. Clearly, there have been significant evolutions in water loss policy and regulation in just the last 10 years. The scope of the research presented in this article is focused on identify- ing where a framework for water loss auditing and reporting exists today, where there are performance targets, and which states or agencies align their requirements with the best prac- tices of the M36 methodology. The research methodology consisted of compilation and review of regulatory texts (exist- ing and proposed), statewide planning documents, sanitary surveys, state funding applications, and policy memoran- dums as available from states across the U.S. Figure 4 above presents the landscape of states where at least some type of framework exists for water loss auditing, reporting, and performance targets. The format of this frame- work varies widely from state to state. In some cases, water loss auditing, reporting, and/or performance targets are required by mandate, with varying degrees of penalty for enforcement. In other cases, water loss auditing, reporting, and/or performance targets are not required, but are otherwise incentivized through priority on state funding applications, consideration for new withdrawal permits, or other means. Figure 5 on page 11 presents those states where that regulatory framework exists, and it directly aligns with or references the best practices of the M36 method for water auditing and loss control. California and Texas were the first states to adopt M36 as the required methodology. Most recently, Georgia, Tennessee, and Wisconsin have joined them in adopting the M36 requirement. Similarly in California, the requirement only applies to those utilities that are part of the California Urban Water Conservation Council (CUWCC). The Delaware River Basin Commission (DRBC), while not a state, instituted a requirement in 2013 for all M36 auditing by most water systems under its regulatory purview — about 300 utilities including Philadelphia, Aqua Pennsylvania, and New Jersey American Water. M36 audit- ing is incentivized in New Mexico via consideration for new permit applications, in North Carolina via priority points for SRF applications, and in South Carolina via incorporation into annual surveys conducted by state inspectors. Among others requiring M36 auditing, only California, Tennessee, Georgia, and the DRBC use the AWWA Free Water Audit Software as the required format for submittal. This software was developed and released by AWWA to provide the industry with a standard format for the water audit, along with a free compiler tool to allow ease of collection and analysis for large numbers of water audits. The current version of the Free Water Audit Software (v4.2) was released in 2010, and the next version (v5.0) is due out in mid-2014. A trend that has been reported by most of the M36 early adopter states is an inherent challenge in the reli- ability of many of the audits submitted, citing examples of errors and anomalies such as water loss greater than 100 percent or less than 0 percent. These challenges are largely attributed 4 to the lack of understanding for the auditing process (as many utilities are conducting these audits for the first time), quality control on the audit data inputs, and the "top-down" nature of the initial audit. The DRBC reported 6 that approximately 100 of the 300 audits initially submitted in 2013 were not suitable for analysis, requiring extensive cleanup of errors and anomalies. In California, the CUWCC reported 7 that among audit Figure 4: States with water loss regulatory or policy framework (2013 statistics) Figure 3: 2011 states scorecard for water efficiency policy Figure 2: 2002 states survey of "unaccounted-for water" standards 8 _ V E R T _ 0 5 1 4 C l e a n w a t e r _ C a v a n a u g h _ D G . i n d d 3 8_VERT_0514 Cleanwater_Cavanaugh_DG.indd 3 4 / 2 1 / 2 0 1 4 2 : 5 7 : 0 7 P M 4/21/2014 2:57:07 PM