News | January 31, 2013

Results From Workshops On Water Rates Highlight Strategies For Success

“Need To Know” Briefs Address Conservation and Revenue Stability,Demand Forecasting, Affordability, and Communication

Water service providers face key challenges in forecasting and preparing for future water demand, staying fiscally solvent while providing fair prices, incorporating conservation and efficiency, and communicating clearly to customers about rates and service. The Pacific Institute conducted an extensive survey and series of workshops on water rates and finances to better understand how water is priced by more than a thousand different water service providers in California, both public and private – and to help agencies identify effective rate-setting strategies. The resulting “Need To Know: Water Rates” series includes four briefs: Conservation and Revenue Stability, Demand Forecasting, Affordability, and Communication and Education.

Comprehensive water supply planning is required by law in California. Supplying water to customers is a business, and as in any business, water sales revenues need to be accurately forecasted and balanced against current and long-term future water supply and treatment costs. California water service providers must be particularly diligent when planning a rate-setting process. The Pacific Institute “Need To Know: Water Rates”
series, released in partnership with the Alliance for Water Efficiency and the Community Water Center, highlights strategies that help water service providers cope with the “new normal” or an era of decreased water demand due to a variety of factors from weather to the economy to increased conservation and efficiency.

“For California, guaranteeing long-term, sustainable delivery of safe, reliable drinking water includes prioritizing conservation and efficiency, a recognized way to effectively reduce long term costs, and often the most cost-effective ‘new water supply’ option available,” said Dr. Juliet Christian-Smith of the Pacific Institute. “However, for water agencies, reconciling a conservation message with revenue stability, as well as concern about costs from customers, are key issues.

”The “Need To Know: Water Rates” series includes pointed information and strategies to help water managers plan water rates for conservation pricing and affordability – and to communicate with their customers for best results. Of primary importance is considering the ability of different customers to pay for water. The brief on affordability highlights strategies a number of agencies are already successfully employing to ensure service to low-income customers – such as using existing eligibility requirements from other utilities to automatically enroll customers into assistance plans, with a number of ways to cover the cost of such assistance.

“A commitment to water affordability is rooted in both human rights and public welfare,” said Christian-Smith. “But water is a rising cost industry as a result of expanding regulations, deteriorating infrastructure and water quality, and the increasing operations and maintenance costs. Effectively communicating to customers about the reasons and implications of their water usage and water rates is critical.”

The “Need To Know: Water Rates” series of briefs on Conservation and Revenue,Demand Forecasting, Affordability, and Communication and Education can be downloaded free of charge from the Pacific Institute website at www.pacinst.org/reports/water_rates. A full report on the Water Rates Survey and research will be available in spring 2013.

About Pacific Institute
The Pacific Institute, based in Oakland, California, is a nonpartisan research institute that works to create a healthier planet and sustainable communities. Through interdisciplinary research and partnering with stakeholders, the Institute produces solutions that advance environmental protection, economic development, and social equity – in California, nationally, and internationally.For more information, visit www.pacinst.org

About Community Water Center’s
The Community Water Center’s mission is to create community-driven water solutions through organizing, education, and advocacy in California’s San Joaquin Valley. For more information, visit  www.communitywatercenter.org.

About Alliance for Water
The Alliance for Water Efficiency is a North American-based non-profit organization dedicated to the efficient and sustainable use of water. For more information, visit www.allianceforwaterefficiency.org.

SOURCE: Pacific Institute

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