After droughts and in light of future concerns over water resources, the topic of conservation has risen in importance. While regional differences in supply concerns exist across the United States and even on a smaller scale, within states, there have been consistent pushes on a federal-level to move towards more efficient use without customer behavior change. Most research suggests that behavior change is “hard,” but by addressing use at the fixture, consumers can continue flushing and showering just as much and use less water.
In addition to this push towards more efficient appliances, the rise in the water and wastewater rates across the US and more specifically, in North Carolina, have put additional incentive on users to conserve, as they are continually sent a strong pricing signal. Weather and household size can also have profound impacts on water use, but the regionality of weather and general trend towards population growth across the country make it harder to assess the impact on total use. Despite all of the factors that impact total demand, federal and state leaders remain interested in how demand is changing over time and what that means for communities strapped for supply and communities struggling to bring in sufficient revenues to cover rising expenses. Continue reading
Almost two years ago, we wrote a blog post revealing that average residential water use is declining in the State of North Carolina. Similar trends have also been identified in other states and across the country, driven by several factors. It turns out; it’s not just average residential water use that is declining. Despite growing service populations, many utilities have noticed that total demand is falling.
Mary Tiger is the Chief Operating Officer of the Environmental Finance Center at the University of North Carolina.
A few months ago a group of over 20 utility managers from some of the largest water utilities in the country convened in Denver, Colorado to discuss strategies that are working (and not working) to mitigate and master issues facing their individual utilities. Beyond having size in common, it was a diverse group, representing a spectrum of ownership and service models, as well as geographical and service characteristics. As such, the impact of common trends in the industry (as projected in the Water Research Foundation report “Forecasting the Future: Progress, Change, and Predictions for the Water Sector”) varied greatly between them. Continue reading
Mary Tiger is the Chief Operating Officer of the Environmental Finance Center.
We have written about a number of alternative rate designs for water utilities on this blog in the past year (see posts on PeakSet Base Model and CustomerSelect Rate Plan). Admittedly, we have a lot of fun at the EFC thinking through creative models, linking those models to utilities’ underlying cost structures, and testing out the ramifications on utility finance, customer demand and affordability. But in practice most governing boards and utility managers are hesitant to blaze a trail, especially on an initiative that significantly alters the way revenue is earned. In a Peer2Peer virtual exchange in December, we asked eighteen utility officials what hurdles would need to be cleared before moving forward with an overhaul to their utilities’ pricing model. Their responses communicated the challenging, but not insurmountable, process of transforming a utility’s business practices.
Jeff Hughes is the Director of the Environmental Finance Center.
I’ve come to the opinion that rate structures, particularly those that are designed to promote conservation and water efficiency, may be getting a bad rap or at least getting more than their fair share of the blame for utility budget woes. The stories and complaints tend to go like this – “We changed our rate structure a few years ago and ever since have seen budget shortfalls that have required unplanned for rate increases. Our board is unhappy, our customers are unhappy, the papers are making fun of us and we still don’t have the revenues we need. Damn rates!!”