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3.1 C-27 In calculating total system water demands, we factor m a 4% increase to reflex unaccounted for water in the distribution system; it equals the difference between the water put into the water disn%ution system and total billed water use. For the calendar year 2000, this muss balance accounting shows unaccounted for water use equals 4.4%. For the future years, the forecast calculation assrtntes unaccounted water use wi0 be 4.0%. Having an unaccounted for factor of about 4.0 is relatively good. Comparable water systems typically experience unaccounted water from S to 10• /a 5. Sensitivity Analysis This section explores how variations in assumptions = impact the base case point estimates generated in Appendix A Specifically, we looked at water use intensification and weather variation. 5.1 Water Use Intensification Increasing residential and commercial space costs can lead to intensification of use at an existing site. Apartments, for example, can see more persons per unit as higher rent costs cause more people to live together to make the rent. Similarly, business owners are financially motivated to put more employees per square foot to manage coats. We tested the hypothesis of intensification by comparing FY 1997198 water use to FY 2000101 water use. We found that water use did increase by about 8 percent on a water use per bill basis for both multiple family and commercial customers. This held me for winter as well as annual water use (weather is not likely to cause this change). Although this evidence su ° 8 pports water use intensification over the 4 -year period, it does not necessarily mean it will continue in the future. In fact, prices in the real estate market have decreased in recent months. Therefore, for the purposes of forecasting, we assume that the intensification levels experienced in 2000 will remain constant over our 20 -year planning horizon. 5.2 Weather Variation RW C's annual water demand only varies by about +/- 2 percent as a result of weather. This conclusion is drawn from analysis of statistical regression models of monthly water purchases as a function of weather between 1975 and 2001. Note weather can significantly impact RWC's water supplies via the Hetch Hetchy water system; shortages in supply can consequently require RWC to take actions to.cut water demands (e.g., 1991). Absent supply shortages, however, RWC's annual water demand does not vary greatly because of local weather. This lack of variability in annual water use is largely a function of the lack of variability in annual temperatures. Over tin 1948 to 2001 period, about 70 percent of the time Page 7