If a fish could write your water bill

Would these fish approve your water bill? Photo of Rio Grande chub (Gila pandora) courtesy of the U.S. Fish & Wildlife Service.

By Lauren Kuehne

A few months ago, I wrote a blog post Why the mayor wants you to have a green lawn: The dark side of water conservation where I “exposed” the open secret of declining support for water conservation programs. Water districts and utilities end up with a big problem when conservation – to put it bluntly – starts cutting into revenues generated by water consumption, forcing a rise in rates for the same water. This leads to bewildered and betrayed consumers and increasingly strapped public utilities who literally can’t afford conservation. At the end of that article, I promised a follow-up post on water rate structures (aka, what you see on your monthly bill) that utilities can use which promote conservation and meet revenue-for-infrastructure needs. It’s taken me a while to follow up, partly because every time I started researching and writing about water rate structures I found myself inexplicably dozing off. Luckily, once I sat down to it, the breakdown isn’t that complicated, so I am hopeful that it’s possible to stay awake for the exciting conclusion (yes, there is one!).

Some background

Your (very local) water district: colored areas are distinct water utilities in the county surrounding Seattle, WA. Source: King County, Washington.

Think for a minute about your water bill. If you live in a big city, it comes from a utility named something like “City Name Water & Sewer”. If you live out of the city limits, it will say something like “Unincorporated Area Name Utilities”. The point is that water delivery and billing is often very localized – for reference, check out the map of water districts in a single county in Washington State (the area around Seattle). While districts are generally cooperating to some extent, even adjacent districts can easily differ in where the water comes from, metering, and rates.

How hard can it be to bill for water?

Think for another minute about how water gets to your house. Easy – through pipes (A+). Slightly more difficult – how far did your water travel? If you live in a small town, it possibly comes from local underground wells. On the other hand, if you live in San Diego, it’s pumped 250 miles from the Colorado River. Either way, there are costs involved in obtaining the water and getting the water to your house. Utilities can mostly divide these costs into two types: fixed (won’t change with consumption) and variable (depends on consumption). See figure below of different fixed and variable costs. Naturally, there are exceptions to every rule, meaning some don’t fit neatly into one category or the other, but it’s close enough to move on.

Costs involved in obtaining and delivering water. While the ratio varies, 80% fixed:20% variable[1] is a good rule of thumb for how costs settle out for water utilities.

Seems simple – what’s the problem?

While the ratio of fixed to variable costs naturally differs from district to district, 80% fixed: 20% variable is a pretty good general estimate[1]. But for historical reasons which can (and have) filled dissertations, water is often billed at a fixed: variable ratio which is too low; for example, your water bill might be 50% fixed or base rate and 50% consumption based. For a real example, Las Vegas Water District has 72% fixed costs, but customers are billed so that fixed rates only cover 18% of those costs[2]. In some sense, this system is fair, because high water users pay the most. On the other hand, if everyone starts conserving water, the revenue will drop faster than costs[3]. As I covered in my last blog post, this forces utilities to raise rates, consumers to complain (“I conserved, now I pay more?!?”), and political heads roll.

I’m no economist, but even I can see these don’t add up well

Where do the fish come in?

Hoover Dam: Fish are not huge fans. Photo by Gordon Wrigley.

Through years of studying fish, I have concluded that fish like water; a good guideline is “more is better”. They also generally are not fans of dams, pumping stations, pipelines, or diversions associated with tapping new water sources [Note: people cannot actually create water – if you hear about a new water source being “created” it means that it’s either been taken from somewhere else or manipulated into a storable form like a reservoir]. So fish not only prefer that more water stays in lakes, rivers, and deltas, but that new infrastructure is kept to a minimum. Both of these ends can be achieved by aggressive and consistent emphasis on efficiency and conservation.

But in order to do this, utilities really do need their rates to reflect their fixed and variable costs. A model which is being increasingly held up for emulation was forged by Irvine Ranch Water District in Orange County, CA in 1991. In water management lingo, it’s an “allocation-based conservation rate structure”. More simply, they separate their fixed and variable costs very strictly. Fixed costs are covered through a combination of property taxes, connection fees, and service charges. Actual water use is billed so that (after a basic allocation threshold) very high rates kick in, which encourages conservation beyond basic use. Utilities that follow some version of this model have the option of putting that money from water guzzlers into conservation programs (for more information than you can shake a stick at on the ‘Irvine Model’, see refs 2,3,4).

How can I help?

Educate yourself about where your water comes from and how it’s billed – you know that sleep-inducing newsletter your utility sends you every quarter or year? Read it. For extra credit, check out their website. Water utility companies are often accused of doing a poor job of communicating why rates may need to change. But, let’s face it, are we clamoring for the information? Your water company might be trying to tell you something. After a bunch of research, I ended up on my own water utility’s website and found this simple, poignant plea:

Please conserve water. Our water supply is pumped from aquifers below us, replenished by local rains. We do not get our water from the Olympic or Cascade Mountains. As water demand increases and as more area is developed, protecting our aquifers becomes even more important.”

Okay, so I might have lied a little about the exciting conclusion, but really, how hard is that? I mean, a fish could probably write it.

References:

  1. Circle of Blue: “The Price of Water 2012”
  2. Circle of Blue article “U.S. Urban Residents Cut Water Usage; Utilities are Forced to Raise Prices”: section ‘The Irvine Model’
  3. David Zetland (water economist, author of Aguanomics) in Forbes magazine: “The Water Shortage Myth”
  4. Irvine Ranch Water District website: Conservation rate structure

Additional reading:

National Geographic: Calculate your water footprint

Circle of Blue: Experts Name the Top 19 Solutions to the Global Freshwater Crisis

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3 thoughts on “If a fish could write your water bill

  1. Great post, Lauren. I never thought water bills could be so riveting! Do you know if there are drawbacks to the “Irvine Model,” and if not, why aren’t more districts adopting it? Is it really just a matter of creating the political will?

  2. Thanks Kristin! Good question – no, it’s not just political will, but that’s a big part of it. There are a few drawbacks and criticisms..or at least hurdles to allocation-based systems. For one thing, it does need some good data on how much water a typical household uses because in order to allocate a reasonable amount you have to know what that amount is. Not all water districts have that data (not all water is metered for instance), and people often don’t like their water company getting nosy about how many people live there. That “reasonable amount” is going to vary at least regionally, so it’s hard to generalize at say, a state or national level. Also, one hurdle I’ve read is that deciding whether the allocation should include outdoor water use is tough. Another one – which was surprising to me until I thought about it – is that it usually involves significant changes in billing systems. This doesn’t seem like a big deal at first, but water management is so local that asking every single utility to upgrade their billing (and maybe metering) systems can be an expensive and daunting proposition.

    A really good summary of drawbacks and criticisms is this article from Groksurf in San Diego. The city has been seriously looking at an allocation-based system since 2009, and the article discusses some of the results of their pilot/research studies, public opinion, and hurdles to implement: http://groksurf.com/2011/04/25/can-san-diego-live-with-a-water-budget/

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