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Unrequited Demand in a World of Fixed Infrastructure

Water_HeartIt can be hard being a water utility when nobody needs you. Or worse yet, when you have to push people away. But the news seems rife with such stories of unrequited demand for service from water utilities that invested so much in the relationship, and the infrastructure, now only to be left kind of empty.

Continue reading Unrequited Demand in a World of Fixed Infrastructure

Touching Down with Affordability of Water and Sewer Bills in Alabama

Football

It’s college football season again, and thoughts among many in the South, and elsewhere, turn to tailgating and touchdowns, hot dogs and sodas, field goals and fun. (Here in Chapel Hill, we like to remember alumnus Andy Griffith’s famous 1953 comical monologue about football, “What It Was, Was Football.”) Meanwhile, those of us at the UNC Environmental Finance Center (EFC) have completed our first-ever Alabama Residential Water and Wastewater Rates Dashboard, which, in fact, ties in with – you guessed it – football! (As well as tying in with the affordability of water and sewer bills by customers in Alabama, of course.) Continue reading Touching Down with Affordability of Water and Sewer Bills in Alabama

Crosswalking between Gray and Green Infrastructure for Budget Officers

GreenRoof2As the green infrastructure (GI) approach to water management gains momentum, the budget process needs to adapt to some of the characteristics that make green distinct from the more traditional gray infrastructure approach. As communities are embarking on GI, shortcomings in the budgeting process can falsely create a bad first impression. When inaugural GI projects are grossly over budget for their installation, or need more frequent maintenance than planned, future GI projects may be blocked before the current project’s vegetation can become established enough to produce the significant benefits for which it was designed. However, considering and planning for certain key attributes of GI can fend off this negative cycle. Continue reading Crosswalking between Gray and Green Infrastructure for Budget Officers

Watershed Finance, Governance, and Beach Houses

 

Beach HouseIt happens almost every year: my family goes to the beach, and we invariably see an amazing house for sale that inspires us to dream. It takes only a few seconds to realize purchasing a beach house by ourselves is not an option, but what if we join forces with family, friends or neighbors? Suddenly the sticker price doesn’t seem so intimidating – we’ve solved the financial barrier to owning a beach house!! But as we start to think about the details, like how exactly we might join up with 6 other families, it doesn’t take long to come up with a long list of obstacles to joint ownership.  What about all the legal issues related to joint ownership? What happens if after a few years, several of the families decide they are sick of the beach? What if one family ends up using the house a lot more than the other families – will they pay more? I’m sure figuring out all these issues is possible, but they seem so daunting it cures me for a least a year of considering buying a beach house.

What does any of this have to do with environmental finance? Going through this yearly personal finance exercise reminds me of one of the critical truths of environmental finance – often paying for an environmental objective has more to do with governance than finding the money.

Continue reading Watershed Finance, Governance, and Beach Houses

What’s the Buzz about NC Electricity Rates?

sunset powerline

Electricity rates and consumer electricity expenditures have wide ranging impacts on critical community and economic development issues in the state. New research from the Environmental Finance Center at UNC Chapel Hill demonstrates how variable pricing is across the state and the large number of factors that influence costs and pricing.  Figuring out why one utility’s prices are higher than another can be difficult.  However, in at least one region, there is general consensus about why prices are relatively high.

Last week big news hit the region: a $1.2 billion deal between the NC Eastern Municipal Power Agency (NCEMPA) and Duke Energy Progress could mean lower energy prices for many communities in the eastern part of the state. Continue reading What’s the Buzz about NC Electricity Rates?

Base Charges Customized Based on Customer Water Use

BaseChargeVaryingByConsumption

 

As mentioned in last week’s blog post, some utilities are creatively setting varying base charges for subgroups of customer classes in order to more equitably distribute the (fixed) costs of the utility among customers with varying demands. One way this is being done is by tailoring the base charge based on each individual customer’s water use levels. No doubt, consumption-determined base charges are rare among water utilities today. However, there are some examples, and these examples demonstrate two methods of determining base charges based on water use.

Continue reading Base Charges Customized Based on Customer Water Use

Less Common Base Charge Structures

Base Charge on a Water Bill

Base Charge on a Water Bill

 

Base charges are critical for water utilities’ finances given that the majority of utility expenses are fixed in the short term and require a stable revenue source to pay for them despite decreasing demands. The most common practice is for utilities to set a constant base charge for each customer class or vary the base charge by meter size. Yet, this assumes that every residential customer with a 5/8″ meter places the same fixed costs on the water system. A few utilities have determined that this was not the case and have structured base charges more creatively, resulting in varying base charges among customers of the same customer class. This post describes some of the less common structures of base charges.

 

Continue reading Less Common Base Charge Structures

Water Funds: Financing FONAG in Ecuador

 

Ecuador_bridgeoverthePastazas2“For many people, food comes from a supermarket and water comes from a tap. But the truth is, the food and water that sustain us come from grasslands, forests, rivers, and lakes that depend on natural processes to be sustained themselves. Setting aside wild places alone are insufficient to protect nature. Lands and waters can sustain people and wildlife; modern conservation is about finding ways to do both.”

-The Nature Conservancy 2013 Annual Report

This post is part of a series following the experiences of students participating in the EFC’s Summer Environmental Finance program in Ecuador. This post was written by Megan Garrett.

The Nature Conservancy (TNC) has initiated a program to conserve the watersheds from which water is sourced, called Water Funds. These water funds exist all over the world, but have become especially popular in Latin America following the success of FONAG (Fondo para la Proteccion del Agua), the first ever water fund, located in Quito. These water funds are an interesting financial tool in preserving our water sources and surrounding environment. Continue reading Water Funds: Financing FONAG in Ecuador

Neutral is the New Green: Financing Carbon Offsets at Duke University

Carbon NeutralIf you’ve been on a college campus lately (or received your annual alumni donation request letter), you know that colleges and universities are increasingly focused on “green” initiatives that improve sustainability and reduce campus-wide energy use. While the EPA’s proposed 111(d) standards will make reducing carbon emissions a household phrase, many colleges have been working towards reducing carbon emissions on campus for years.

More than 675 colleges nationwide have become signatories of the American College & University Presidents Climate Commitment, a network of college and university presidents and chancellors dedicated to promoting sustainability efforts on college campuses.  Today, 22 colleges and universities in North Carolina are part of the commitment including UNC-Chapel Hill, Duke University and NC State.  Many of these colleges have established a goal of becoming carbon neutral and are taking actions to reduce carbon dioxide emissions in order to achieve a zero carbon footprint.  Since no college campus has found a way to reduce the use of fossil fuels on-site by 100 percent, becoming climate neutral on campus must be accomplished through the purchase of carbon offsets – investments in off-campus carbon reduction initiatives.  Continue reading Neutral is the New Green: Financing Carbon Offsets at Duke University

In the News: D.C. Water Considers First-Ever Century Bond by a Public Utility

DC-tunnel-infrastructure-waterThis post originally appeared on June 20, 2014 in GOVERNING Magazine Online.

Written by Liz Farmer

If Washington, D.C. is undertaking a project that will benefit – at minimum – the next three generations, then why make just one generation pay for it?

That question is the impetus for what would be a highly unusual move as D.C. Water and Sewer Authority contemplates offering a century bond this summer to help finance a major infrastructure project already underway. Century bonds, which are paid off over 100 years, are rare in the private sector and are mostly issued by colleges and universities. But it’s unheard of for a public utility to issue such a bond. Continue reading In the News: D.C. Water Considers First-Ever Century Bond by a Public Utility