The water industry is facing unprecedented capital needs, needs which will largely be recovered through increased rates. Sitting between public utilities and the public are governing boards trying to make the right decision for their community and the utility. What information do governing boards need to approve a water rate increase? What are the most effective methods of communicating the need for a rate increase?
Non-residential water customers use nearly 43% of public water supplied in the United States[1]. In fact, their portion of public water demand has increased over the past twenty years as water efficiency in the residential sector has improved. Studying customer behavior has become an essential management strategy for most businesses. Yet this group of water customers is largely understudied by utilities, in large part because it is an extremely diverse customer classification[2]. There are many ways to slice-and-dice the data. This blog post describes one way of identifying the big changes that big customers make.
The study: Over the past year, the Environmental Finance Center has worked with the North Carolina Urban Water Consortium and Valor Analytics to develop meaningful and feasible metrics to track non-residential water customers’ behavior. Utilities can incorporate these metrics into their practices to better understand and anticipate non-residential water customer water use and revenue impacts.
Meaningful metrics: One such metric is called the plateau: a significant and sustained change in water use behavior.
The road goes on forever, and the party never ends. ~Robert Earl Keen
The Environmental Finance Center has partnered with Arcadis, Raftelis Financial Consultants, ICMA, and Stratus Consulting to get to the bottom of what meaningful communication between water utilities and their governing boards regarding rates and finances looks like. What do the boards want to know? How do they want to know it? It’s easy in a research project to want to focus on measurable results. If you do ‘x’, then you’ll achieve ‘y’. But it’s not that easy with communication.
We spent a week interviewing water utility staff and their governing board members in the Southeast last month, and their insight on the topic should be no surprise to anyone that has been involved in any relationship. Below are some of the insights shared by board members on effective strategies about how staff can foster their support for rate increases.
It can be hard being a water utility when nobody needs you. Or worse yet, when you have to push people away. But the news seems rife with such stories of unrequited demand for service from water utilities that invested so much in the relationship, and the infrastructure, now only to be left kind of empty.
This morning, legislation sits on the President of the United States’ desk that will advance policies and funding for the nation’s water infrastructure. Assuming he signs it, the Water Resources Reform and Development Act (WRRDA) of 2014 will authorize funding for existing and new water, wastewater, and stormwater infrastructure finance programs, as well as waterway and port projects. The water and wastewater infrastructure industry has been eagerly awaiting passage of this uniquely bipartisan bill (Passed the House 412-4; Passed the Senate 91-7), specifically its update to the Clean Water State Revolving Loan Program and its creation of a Water Infrastructure Finance Innovations Authority.
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