Economic implications of non-revenue water and long-run marginal cost for Tulcán’s public water utility

Abstract Non-revenue water (NRW) is a persistent global problem generated in municipal systems, causing millions of cubic meters of water to be wasted per year, becoming a financial obstacle for water and sanitation companies, and generating economic losses. The main objective of this study is to determine the NRW in the supply system of the Tulcán canton from information provided by the Empresa Pública Municipal de Agua Potable y Alcantarillado de Tulcán (EPMAPA-T) during the period 2013 to 2020, where the NRW, the Physical Performance Indicator (PPI), which measures the technical and operational efficiency of the water distribution system, and the Return Flow Coefficient, a fraction of the produced water that returns to the sewer system, were analyzed. The estimation of Non-Revenue Water (NRW) and the Physical Performance Indicator (PPI) was based on the comparison of volumetric records, including billed drinking water, water output from the Water Treatment Plant (WTP), and influent to the Sewage Treatment Plants (STPs). They are in a range of 37% to 43% and 57% to 63%, respectively, and with a return coefficient of 0.93. In conclusion, an average NRW of 41% was presented, indicating that not all the produced water enters the sewer system, reflecting a total loss of $ 509,802.69 during the period from 2013 to 2020. In Ecuador, studies on NRW are still incipient but strategic; this work has shown that almost half of the drinking water produced does not generate income, highlighting the magnitude of its losses and cost.