Tag: water use (Page 2 of 2)

Effective Utility Management


Guest author Catherine Noyes is an Associate Consultant at Raftelis Financial Consultants.

Through the 1960s, the utility business was all about protecting public health – making sure that technology was in place to ensure safe and reliable water and wastewater service to a growing population.  In the 1970s, the focus on public health was expanded to include the environment.  The EPA was established, and the federal government enacted legislation to protect clean air and water.  With this legislation came large federal grants, which funded expansions to the nation’s water and sewer infrastructure. Continue reading

Financial Health: Running Treatment at Capacity

Dayne Batten is a Research Assistant for the EFC and second year MPA student at UNC-Chapel Hill’s School of Government.


Traditional engineering plans suggest that, when customer demand approaches the maximum daily capacity of a utility’s treatment plant, the utility should make an expansion to its plant sufficient to handle several decades of growing demand. By following such a strategy, utilities will have a significant amount of excess capacity in the years immediately following a plant expansion. Hence, utilities may face a tradeoff between building a treatment plant capable of serving their needs for quite some time, or expanding their plant incrementally to control fixed costs. As part of our ongoing research into resilient business models for water and sewer utilities, we wanted to see if utilities that were using a greater percentage of their treatment plant capacity tended to be in better (or perhaps worse) financial health.

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PeakSet Base: A Pricing Model for Utility Revenue Stability and Customer Conservation

Mary Tiger is the Chief Operating Officer for the Environmental Finance Center and Project Manager for “Defining a Resilient Business Model for Water Utilities” Project funded bythe Water Research Foundation.

Water and wastewater utilities most commonly generate revenue by charging rates against a customer’s water use. When setting these rates, a utility balances multiple and, oftentimes, conflicting, objectives. With their rate structures, most utilities strive to collect adequate revenues for operations and system investment, promote the efficient use of water by its customers, and maintain affordability for basic levels of consumption. In particular, the goals of revenue sufficiency and conservation promotion present utilities with a conundrum[1]: when customers are more efficient with their water use or conserve, a utility’s sales base erodes. The Environmental Finance Center is researching alternatives to the classic water utility retail pricing; alternatives that would better align utility revenue stability and the promotion of efficient water use.

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“One Oar in the Water”

Daniel Kolomeets-Darovsky is an Environmental Finance Analyst with the Environmental Finance Center.

stephen schiller / Free Photos


Defining a resilient business model for water utilities is no easy task in a time of unprecedented economic conditions, scare capital, and increasingly volatile environmental conditions. Everything seems to fly in the face of it, let alone the necessary informational foundation needed to see what’s really going on behind-the-scenes. How do we even know, for instance, that residential water use is declining in a place like North Carolina? What about how well your local utility is running its business, as measured by money it takes in versus money it spends (operating revenues versus operating expenditures)?

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Declining Residential Water Use, Part One: North Carolina

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?

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