It’s difficult to accurately assess how much of the water that is pumped into a utility’s distribution system is lost before it is metered, but the Environmental Protection Agency puts the number at 16%, and some experts’ estimates are even higher. In any case, there are basically two ways to lose water before it is metered. One is through leaks in the distribution system, called real losses. The other is through water that is consumed but not paid for, called apparent losses.
Real losses drive up production costs and force water utilities to pump more water than customers need. This drives up the costs of operations by forcing the utility to pour money into infrastructure repairs.