Non-revenue water is one number that hides two problems with completely different remedies. Reporting it as a single percentage is how a utility spends five years fixing the wrong one.
The split
Real losses are water that left the network through a hole. Apparent losses are water that arrived at a customer and was not billed for — under-registering meters, unmetered connections, estimation in place of reading. Both show up in the same subtraction.
Real losses want pressure management and active leakage control. Apparent losses want a meter replacement programme and a billing audit. Neither remedy touches the other problem at all.
Showing the arithmetic
Start with system input volume. Subtract billed metered consumption and billed unmetered consumption to get non-revenue water. Then split it: unbilled authorised consumption is what you gave away knowingly, apparent losses are metering and billing error, and what remains is real loss.
The last figure is the only one a leak team can act on, and on most networks it is between a third and a half of the headline number.
What it is worth
Value real losses at the marginal cost of production, because that is what you stop spending. Value apparent losses at the retail tariff, because that is revenue you failed to collect. They are different numbers, and the second is usually larger per cubic metre — which is why a meter programme often pays back faster than a leak survey.