Water Use & Efficiency

Why It Matters

Water Use & Efficiency is key to American Water’s business—both within our own operations and our customers’. Some of our greatest opportunities to reduce environmental impacts while also saving money include: optimizing water use, investing in technologies to prevent leaks and increase the efficiency of water infrastructure and educating consumers. Water efficiency measures reduce operating costs, energy consumption, and the need for water infrastructure expansion, as well as the demand on the planet’s limited water supply—all benefiting our customers by helping to keep rates affordable.


Our Approach


The Safety, Environmental, Technology & Operations Committee of the Board of Directors assists the Board in the oversight and review of environmental policies and practices. The committee reviews and monitors significant environmental strategies as well as policy and planning issues related to our operations—including matters before environmental regulatory agencies, compliance with environmental laws and regulations and environmental performance. Additional committee responsibilities include overseeing programs and policies regarding the protection of the environment, water conservation and greenhouse gas emissions. Our Senior Vice President,

Chief Environmental & Operational Excellence Officer oversees our business performance and reports to the Safety, Environmental, Technology & Operations Committee quarterly on our Water Use & Efficiency and Energy & Emissions performance.

To further drive behavior toward efficient use of natural resources, we link all employee incentive compensation—including our union-represented employees—to operational efficiency through our O&M ratio. Efficient water and energy usage positively affects our O&M ratio by reducing operating expenses, allowing us to focus our spending on capital investments for the benefit of our customers. Every dollar saved in O&M expense allows for $8 in capital investment without affecting customer bills.


Environmental Policy

Our Environmental Policy outlines the requirements for us to operate in a manner that protects public health while promoting environmental stewardship and maintaining our brand.

The policy outlines our commitment to:

  • Comply with all relevant environmental laws, regulations and standards;
  • Sustain the environment through responsible business practices that promote environmental stewardship with a holistic approach to pollution prevention; and
  • Use natural resources effectively and efficiently.

We review the policy every three to five years and update it as needed. We are in the process of revising our Environmental Policy to develop more comprehensive functional responsibilities.

Leak Detection

Leak Detection Technologies in New Jersey

New Jersey American Water boasts state-of-the-art acoustic leak detection technology. We operate 5,000 nodes including hydrant-mounted leak detection caps that listen for water leaks and help us identify where we need to dig when targeting a leak fix. In this area, from June 2015 through July 2018 Non-Revenue Water rates decreased from over 29% to 19%. Because of this success, we expanded permanent acoustic leak detection and continue to seek opportunities to deploy this technology. Leak detection helps us preserve our most precious natural resource.

Supplier Environmental Expectations

Our Environmental Policy states that we will strive to do business with vendors that:

  • Have not incurred violations related to the environment within the past seven years;
  • Have an Environmental Policy or similar commitment focused on sustaining the environment through responsible business practices;
  • Publish a Corporate Responsibility Report and/or invest in the community; and
  • Show they have adopted other environmentally friendly/environmentally sustainable practices.


Technology & Efficiency

American Water makes a significant investment in technology and resources to keep our water loss to a practical minimum. We replace the water mains most susceptible to breaks and leaks (approximately 300 miles of water main replaced per year) and renew old valves and service connections to minimize leakage of treated water. In addition, we use a variety of technologies including advanced metering systems, a smarter water grid, pressure management and leak detection programs. These efforts all help drive efficiency by minimizing the withdrawal of limited freshwater supplies, reducing power demands associated with pumping and treatment and using less chemicals and other resources throughout our processes.

  • Continuous Acoustic Monitoring of Water Mains via Hydrants: Leak detecting sensors record sound patterns in the distribution system. Trained staff use specially designed software to analyze the noise for leaks. These sensors can detect small leaks before they visually surface as larger leaks.
  • Satellite and Sensor Technologies: Satellite imagery is used in specific service areas to detect leaks via a particular spectral “signature” typical to drinking water and our prototype drones use infrared and spectral technology to spot changes in ground temperature or moisture indicative of leaks. Additionally we are testing other electronic sensors, such as in-pipe drones or probes, which are inserted into water mains and travel a planned route to identify cracks, deterioration or weaknesses in the pipe.
  • Improved Pressure Control: Reducing and minimizing pressure fluctuations within pipelines lowers leakage and reduces the stress on pipes. Additionally, more carefully managing pressure within the distribution system can optimize pumping efficiency, resulting in lower power demands while still providing customers with the reliable supply they need.
  • Smart Distribution Systems: Installation of automated flushing devices optimizes the frequency and duration of flushing, which minimizes water loss and improves water quality within our distribution systems.
  • Advanced Metering Infrastructure (AMI): We are working with state utility commissions on the importance of AMI and are integrating real-time water usage data into our planning tools as well as our work and customer management technology platforms. This information helps us identify usage trends and properly identify leaks and resources needed to address potential issues. We will also be able to leverage this data to better understand rate design and cost of service calculation.
  • Zero Discharge: We also operate innovative and efficient backwash practices at surface water plants to improve efficiency.

Customer Conservation & Efficiency

We work closely with many of our customers and a few state utility commissions to encourage water conservation. We communicate conservation programs via bill stuffers and our websites educate customers about the efficient use of water. While our programs vary by state, some of our conservation initiatives and water efficiency improvement efforts include:

  • Tiered-rate structures
  • High-efficiency fixtures and rebate programs
  • Leak detection kits
  • Water-saving hints and tips on our websites and in social media
  • Educational literature and events for customers
  • Partnerships with the EPA and other organizations on public education
  • Events such as Fix-A-Leak Week
  • Alliance for Water Efficiency membership, which offers progressive research support, educational information and tools for the utility customers

As a promotional partner of the EPA’s WaterSense Program, American Water helps to raise awareness about the importance of conserving water and promoting the use of WaterSense products. The Water Efficiency Technical Committee represents American Water with EPA WaterSense and the Alliance for Water Efficiency to maintain our promotional partnership and membership, respectively. In 2018, American Water reported over 15,000 giveaways or rebates for Water Sense-labelled, high-efficiency fixtures or appliances, with the majority of these program offerings in California and Pennsylvania.

We also are in the process of migrating customers to AMI, providing our customers with better visibility into their water usage. In the future, this technology will allow us to notify customers via text message or email of unusual water consumption patterns.

Reception office

Overall, in recent years, our residential customers have saved about 1,100 gallons per customer per year—or 3.3 billion gallons annually, about 12.5 million cubic meters—through conservation and efficiency measures. Among the initiatives contributing to these savings are:

  • California American Water’s leading conservation program efforts totaled about 100 million gallons in water savings in 2018.
  • In 2018, New York American Water embarked on a conservation study that included a detailed evaluation of water use patterns and a customer survey about water consumption habits that identified the water savings opportunities.

In 2019, we will offer options such as discounts on smart irrigation controller devices for residents to help them use water more efficiently outdoors, including a water use calculator on our websites and irrigation audits.

In 2018, American Water introduced Major Account Managers for large accounts, who work closely with our larger customers to address concerns about water use and implement conservation programs. Please see our Doing Good for Our Customers section for more information.


Revenue Stabilization Promoting Efficiency

A few of our jurisdictions have adopted RSMs and adaptive tariffs, which permit us to collect state utility commission-authorized revenue for a given period, which is not exclusively tied to the volume of water sold during that period. These mechanisms not only reduce the size and frequency of general rate cases but also promote water efficiency, which translates into lower power costs and, in the long-term, avoids the need for additional capital investment.

Both at Corporate and state utility levels, we advocate for RSMs that separate water sales from revenues. Currently, the way rates are set in certain states, if our water customers use less water, our earnings will decline because our revenues will drop. This makes it more difficult to invest capital. The idea behind the RSM is that it is inappropriate to “penalize” the company or its subsidiaries for improving water efficiency. Implementing this alternative regulatory mechanism will remove a disincentive to promote water efficiency and will support earnings that permit continued water infrastructure resiliency and efficiency investments.

As a promotional partner of the EPA’s WaterSense Program, American Water helps to raise awareness about the importance of conserving water and promoting the use of WaterSense products.

Operational Eco-Efficiency

While we work to promote efficiency across our systems and for our customers, we implement similar measures at our own facilities: we complete audits and promote and engage in efficient irrigation practices that we encourage our customers to use. As an electricity intensive industry we have been able to maintain our energy consumption ratio per thousand gallons (kGal) over the past 10+ years, while acquiring systems that typically require significant investment in infrastructure and are typically less efficient at time of acquisition. Further, our new corporate office utilizes sustainable building design to minimize our environmental impact. For more details, see the section below titled American Water's LEED Headquarters.

Reducing Water Loss

At American Water, “Non-Revenue Water” represents the sum of specific types of water loss and any authorized, unbilled consumption that occurs within water distribution systems. An accurate, reliable system for Non-Revenue Water reporting is critical to document operations, financial disclosure and the budget process; manage customer needs; track business growth; and plan capacity. To standardize and ensure the quality of our reporting, our Non-Revenue Water Practice helps employees accurately record and report Non-Revenue Water. It also describes the information systems used to maintain data and specifies the tools used for reporting. In 2018, American Water developed a Non-Revenue Water reporting practice that recommends all state subsidiaries conduct an annual water audit using AWWA water audit software. We will use this data to identify and prioritize areas for needed water loss investment. We update this practice every three to five years or when policies and practices change. The most recent update occurred in July 2019.


Our Performance

chart non-revenues total water losses

chart revenues from rate structures

1The Non-Revenue Water rates above represent leakage (real losses) and “apparent losses” (meter inaccuracies, theft, etc.) and “unbilled authorized consumption” (water main flushing, fire fighting, etc.). These values are determined based on difference between water production and water sales. We are not able to provide an accurate “water leakage” value.

2Percentage of water utility revenues from rate structures designed to promote conservation and revenue resilience

American Water’s LEED Headquarters

We reinforced our dedication to being an environmental leader by attaining LEED Platinum Certification for our new headquarters—both the core and the shell of the building—and earning all possible points within the Sustainable Site credit category. Our headquarters on One Water Street in Camden, New Jersey has committed to offsetting electricity demand for a minimum period of two years, with the option to renew. Of the many features that make our Headquarters a place we are proud to call home, these are some highlights:

  • 40.8% of the total site area is dedicated to open space.
  • Roofing technologies, energy and atmosphere efficiencies reduced our HVAC cost by 30%.
  • We reduced potable water usage for sewage conveyance by 95.7% by using rainwater, low-flow water closets, low-flow faucets and waterless urinals.
  • We reduced flush and flow fixtures water use by 77.3% compared to an office space with typical fixtures. A major contributor to this reduction was the installation of waterless urinals.
  • We diverted 88.4% of the construction waste from landfills and appropriately recycled.

See this case study for more about our headquarters’ sustainability features.