At the peak of this year's record drought, the city of Houston lost more than 18 billion gallons of water through a system that was leaking like a sieve, amounting to tens of millions of dollars wasted in potential revenue.

The largest losses occurred in September and October, when more than 9 billion gallons — about one-fourth of all the water produced during those two months — leaked from a system riddled by countless pipe breaks, according to recently released city records.

"Water is a valuable resource, and we're blowing it right and left," said Katie Molina, general manager of the Citizens' Environmental Coalition in Houston. "We have to ask why we have so many leaks. Is it all drought-related, or did we let our infrastructure fall into such a state of disrepair that it is now coming back to haunt us?"

The value of Houston's lost water and the cost of making thousands of repairs is hard to measure, city officials say.

However, they acknowledge that during the last fiscal year (July 2010 to July 2011), the city earned an average $2.81 for every thousand gallons sold. At that rate, the water lost from June through October (18.1 billion gallons) could potentially have been sold to users for $50 million.

When projected over the last fiscal year, the city lost 30 billion gallons - 18 percent - of the water it produced, city records show. That means, using the average rate for every thousand gallons sold, Houston could have earned about $85 million from users - at a time when the city has been forced to make layoffs because of budget constraints.

However, Alvin Wright, the city's public works spokesman, said it is impossible to put a price tag on the water lost.

Revenue down the drain

City officials don't see water like "some product sitting on a shelf," but as a resource held in reserve for which residential and commercial customers pay varying rates, said Houston mayor's assistant Janice Evans.

Wright said the only value that can be placed on the lost water was the costs spent producing and treating it, which averages about 25 cents per 1,000 gallons. So that would mean the 30 billion gallons of lost water carried a $7.5 million price tag.

The Texas Commission on Environmental Quality's manager over drinking water, Elston Johnson, said the state has no standard on the average amount of water that leaks from a municipal system.

"But conservation is a definite priority for any water system," he said. "Loss of water translates into loss of revenue."

City officials said their budget tracks only the amount spent on maintenance, not specifically what is spent on fixing busted pipes.

However, the city acknowledged being forced to spend $13.3 million beyond what was in the maintenance budget to repair gushing pipelines just between June and October.

Rates won't go up

The city said it will not have to increase water rates — after Houston's residential rates experienced 30 percent increase a year ago — to cover the extra cost for leak repairs or treatment of lost water.

Record sales of water during the drought will provide the water department with $19.8 million more than had been anticipated in the budget, officials said.

Yet just as Houston experiences these record water sales and leaks, the city is being warned that it cannot afford to waste what is becoming an increasingly scarce commodity.

Sandra Wegmann, with the Center for Houston's Future, noted that studies project the demand for water in the Houston area will exceed supply by 35 percent by 2060.

"Additional population growth will mean additional demand for water and the further need to update water infrastructure and pipelines," Wegmann said.

Houston has 7,000 miles of water lines that on average are used 20 years before they are replaced or upgraded under the city's capital improvement plan, said Roberto Medina, a city public works spokesman.

"But some of the pipelines date back to the 1960s," he said.

City officials blame the drought, which caused the ground to shif,t for creating the unprecedented number of leaks.

From June to Dec. 5, the city hired extra crews to repair more than 11,000 pipeline breaks. Yet records show many leaks still took more than three weeks to plug. The municipal chart mapping the repairs with colored dots looks like a cluster of growing cancer cells spreading in every direction.

No 'limitless supply'

The need for improved conservation, some environmentalists say, became even more apparent when Houston was forced to ration water by limiting days lawns could be irrigated. The city also had to withdraw water from its emergency reserve, stored in Lake Conroe, from August to Nov. 30.

As a result, Lake Conroe, already depleted from the drought and searing temperatures, dropped to an all-time record low of 9 feet below its normal level.

"Clearly, conservation will be a huge priority for the future. It needs to be included in the plans. I had no idea that much water was leaking," said Wegmann, at the Center for Houston's Future.

Molina, with the Environmental Coalition, agreed: "A lot more attention will be put on conserving, because of the drought and wildfires. Our water is precious and growing scarce. It's not that limitless supply that we used to think."

cindy.horswell@chron.com