Author: Shadi Eskaf (Page 2 of 5)

SOG Environmental Finance Ctr

Four Trends in Government Spending on Water and Wastewater Utilities Since 1956

According to data collected and published by the Congressional Budget Office (CBO), federal, state and local governments in the United States spent more than $2.2 trillion in the last 59 years on operations, maintenance and capital infrastructure of water and wastewater utilities. That equates to more than $4,131,000,000,000 in 2014 dollars, adjusting for inflation of infrastructure-specific costs. Following our earlier blog post demonstrating that federal spending on water and wastewater utilities decreased since the 1980s, we analyzed the data and identified 4 more trends in how government spending on utilities changed between 1956 and 2014.

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Solving the Puzzle: Understanding Customers through their Water Use History

Last week, I posted a graph of my household water use for the past few years and challenged our readers to identify as many interesting characteristics about my household as they can. Often, the only data a water utility has on their customers are what they have in their billing records. Other household characteristics, such as size of household, income, age, house and lot size and features, water use behavior and preferences, etc., are very difficult to obtain for each customer. However, as demonstrated by my own personal example, mining the billing data alone can reveal much about each household. Here is what my water use history reveals about my household, and the application of this exercise in water resources and utility finance management.

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What Can You Tell About My Household Based on Our Water Use History?

Are you up for a challenge? I have disclosed in this graph my own household’s water use between June 2006 and December 2014, as reported on my water bills. Without any more information about my household’s characteristics (except that it is residential, on a single 5/8″ meter, and using drinking water and wastewater service from one utility), this is the extent of knowledge that my utility has about my household. Yet, my water use data – which are present in the utility’s billing records – reveal much about my household. My challenge to you is to look at this graph and identify as many  interesting characteristics about my household as you can. Think about it, too, from the perspective of how the utility should interact with my household. Here are a few questions to consider to get you started:

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Small Water Systems with Financial Difficulties are More Likely to Violate EPA Regulations

One hazard that water utilities with financial difficulties face is an increased risk of falling out of compliance of federal requirements and drinking water regulations. Violating regulations often triggers enforcement actions (and sometimes fines) by the state primacy agency, adding to the time and expense of running the water system. This can be extra troublesome if those utilities are already financially constrained. We analyzed national and regional data and found that unfortunately, there is statistical evidence that correlates small water systems’ financial difficulties and some types of violations.

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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.

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