Jeff Hughes is the Director of the Environmental Finance Center and the Principal Investigator for the Water Research Foundation project mentioned in the post.
A recent report estimated that water utilities across the country will need $1,000,000,000,000 (count the zeros…) to cover their infrastructure needs. All signs indicate that most of this revenue is going to come from selling water services, and that as the needs of the industry rise, so too will the need for strategies to increase revenue in a predictable and sustainable manner. A recent analysis of rate and revenue trends indicates that relying on simple price increases on the amount of water sold may be neither a predictable nor sustainable revenue strategy.
Shadi Eskaf is a Senior Project Director for the Environmental Finance Center at the University of North Carolina.
Imagine yourself to be the C.E.O. of a company that produces a high quality product. That product doesn’t really face competition from other substitutes in your local market. You meet with your staff and your Board, and scratch your head over this perplexing fact: your customers are buying less of your product. In fact, they’ve been buying a little less of it each year.
In the business world, this is very troubling. In the water industry, it’s actually supposed to be a good thing, except that it hurts your revenues as well. We will be exploring this challenge for water utilities in future blog posts. For now, let’s start by asking the first question: are customers using less water?