Tag: price of water (Page 2 of 5)

Water Rate Increases Among 1,961 Utilities in Six States in the Last Decade

Shadi Eskaf is a Senior Project Director for the Environmental Finance Center at the University of North Carolina, Chapel Hill.

Rising rates image

Our research shows that water rates have been rising faster than CPI inflation in the past few years for hundreds of utilities, particularly after the financial crisis. In some states, however, there were also many utilities whose rates failed to keep pace with inflation.

From a rate-setting perspective, utilities that raised rates more frequently had a double advantage over utilities that raised rates only occasionally or rarely. First: the average annual rate increase was lower than the one-time rate increases of utilities that occasionally raised rates, reducing the rate shock that customers experienced when rates rose. Second: despite the lower average rate increases, utilities that raised rates more frequently accumulated, on average, a larger total increase in rates in a five-year period than utilities that raised rates only occasionally.

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Marketing a Monopoly

Mary Tiger is the Chief Operating Officer of the Environmental Finance Center at the University of North Carolina.

Water is the talk of the town these days – or at least that is what a series of marketing campaigns are hoping. Lately, it seems that almost every water industry association around has a marketing campaign for water.

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Fund Transfer Workarounds

Stacey Isaac Berahzer is a Senior Project Director for the Environmental Finance Center at the University of North Carolina, and works from a satellite office in Georgia.

Water rate increases can get even more controversial when there is the perception that the related increase in revenue is going to fund government activities other than water service.

With the economic downturn, local governments are having a harder time balancing their budgets and the temptation to draw from utility funds becomes harder to resist. Stories are popping up in the press, such as objections over a 59% (utility) rate increase over a 13-year period, in order to hold millage rates steady in one local government. Several factors play into whether this is an unusually high rate of increase. Inflation is one important factor. In the last ten years, the Consumer Price Index (CPI) measure of inflation rose by more than 25%. The power of compounding involved with annual rate increases over the 13 years is also an important consideration. But, if we compared this increase to, say about 2,000 utilities from six states across the country, would the 59% be an outlier?  Continue reading

Water Services are Cheap, Right? Maybe Not for Everyone…

Jeff Hughes is a Faculty member at the UNC School of Government and the Director of the UNC Environmental Finance Center. Jeff is also the Principal Investigator for the Water Research Foundation’s “Defining a Resilient Business Model” Project (#4366).

Conventional wisdom among many water managers is that the price of water and wastewater service is a bargain and customers should not have difficulty paying their bill. Even in areas with higher priced water services, managers seek solace in the fact that the price of water services still tends to compare favorably to the price of non-essential services such as cable. These views can be supported in most service areas by citing the most common affordability metric, the percentage of a community’s annual median household income (MHI) spent on water services over a year.

Despite the challenges in calculating it, percent of MHI spent on water is Continue reading

WaterWise Dividend Model

Mary Tiger is the Chief Operating Officer of the Environmental Finance Center.

Check

How would you like to get a check from your water utility instead of sending them one? This blog has included a few pricing alternatives that would better align a water utility’s objectives of full-cost pricing and conservation incentives. The PeakSet Base Model and the CustomerSelect Model are both comprehensive rate structures and pricing models. This blog post will discuss a slightly different approach; the WaterWise Dividend Model serves as a supplement to a utility’s pricing model rather than a stand-alone structure. It could really be implemented alongside any pricing model.

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