Big Data Could Influence Water Rates In Drought Regions

Experts say the so-called “big data revolution” is providing a lesson for California during the drought.

Data helps companies estimate what the demand will be for certain products. Matthew Kahn, an economics professor at the University of Southern California, recently explained in an opinion piece in the San Francisco Chronicle that this information could benefit water providers as well by enabling them to adjust the cost of water:

Similar to Amazon’s experimentation, water districts could move away from their method of charging all consumers the same price for water and instead engage in a program in which some water consumers are exposed to higher prices when the resource becomes more scarce. Instead of the uniform tiered water structure that many California water customers are used to (and which has been at the center of recent legal challenges), consumers would be able to opt in to a pricing structure not unlike selecting a cable package. This subset of consumers would be alerted ahead of time — via email, snail mail or text — to the price of water per gallon so they would be prepared to change their behavior.

Kahn suggested experimenting with this approach within a group of volunteer customers. He said adjustments in pricing could ease the pressure on customers to conserve.

Some critics say the price of water is detached from the value of the resource. In 2014, the American Water Works Association (AWWA) ranked value-of-water issues among the top concerns of water professionals. Numbers four and five on AWWA's list, respectively, were "public understanding of the value of water resources" and "public understanding of the value of water systems and services."

In fact, some critics say the low cost of water discourages conservation. One sign of the problem: Rates do not vary by the amount of rainfall a region gets.

"In Fresno, which gets less than 11 inches of rain a year, a family of four using 400 gallons a day faces a monthly water bill of $28.26. In Boston, where rainfall exceeds 40 inches, the same family would pay $77.73," according to a New York Times columnist.

In addition, data may help improve water infrastructure as smart meters flood the water management market with information.

“Just as [data] companies have swooped into the energy management marketplace with tools to help building managers, homeowners, hospitals and campuses with detailed and location-based views of their electricity use and potential for energy efficiencies, we're beginning to see [these] strategies for analyzing water infrastructure,” GreenBiz recently reported.

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