Water rates

From Water Wiki

The retail price of water is called the "water rate." In N.C. this price is often set as a dollar amount per thousand gallons of potable water delivered to the customer--ready to drink, flush, clean, irrigate or waste at the turn of a valve in one's kitchen or bathroom. There is no statewide or other standard for setting rates, however, so other units may be used locally, such as a price per cubic foot of water. The UNC Environmental Center (EFC), working with the N.C. League of Municipalities, has collected and published water rates in North Carolina. The EFC also has produced a nice tool for comparing rates across different water systems. Public water systems in North Carolina are almost entirely unregulated in their rate setting; they are only required by state law not to set different rates for similar classes of service, and they may be required by lenders to meet rate criteria to ensure payback of loans.

At a January 2008 meeting of the N.C. City-County Managers' Assocation, Jeff Leinberger of Duke Energy gave a good, easy to grasp, and startling comparison that illuminates water rates.  He pulled out a $5 bill and asked what it would buy. With a $5 bill in 2008, one can get a large fastfood sandwich with fries and a drink; about two gallons of milk; about four 20 oz. bottles of bottled water; or  2500 gallons of drinking water delivered to your doorstep. Given that comparative pricing, he noted, it is hard to explain to consumers and elected officials why it is so important to worry about water use. This is the modern paradox of value when it comes to water. Fast food sandwiches and dairy products are paradigms of highly subsized products (through sugar and dairy commodity price supports and other farm bill programs). Yet public drinking water still seems much cheaper. How many public water supply systems do you think are setting rates to fully cover their costs, including the costs of repairing and replacing worn out distribution lines and equipment? The reality in 2008 is that many water systems still set their rates in comparison to other systems, and with the goal of attracting businesses to locate in their jurisdiction. In other words, the price of water often bears little or no relationship to the economic cost of withdrawing, treating and distributing that water. And it is very hard to make good decisions (private consumption decisions, private investment decisions or public policy decisions) about things that have no meaningful price signal associated with them.

In the 20th century North Carolina and other southern states had abundant and cheap water resources, energy and land. Drought, rapidly growing population, and a warming climate are ending the era of abundant and cheap water. However, most of our public and private utilities are still using a 20th-century business model that depends upon selling gallons of water to pay capital, operating, and maintenance costs. That  model worked well in the 20th century, when water was abundant. It failed in the drought, when water was scarce. Most water systems delayed maintenance and capital projects during the drought because of reduced revenues.

Our utilities need to change their business model for the 21st century to sell water services instead of gallons. Customers wnat water services -- hot showers, clean clothes, clean dishes, sanitation, and healthy landscapes -- not gallons.

If our utilities help us become more efficient, we may pay more per gallon, but we will use less and keep our bills reasonable. Increasing efficient use of water also increases efficient use of energy. Pumping, treating, heating, and cooling water requires vast amounts of energy.

Cooling coal and nuclear-fired power plants requires vast amounts of water. Increasing energy efficiency reduces demands for cooling water. Installing, operating, and maintaining more efficient fixtures, appliances, toilets, and landscapes saves water and energy, requires skilled labor

, and creates opportunities for new companies and trades.

Utilities could help us (residential, institutitional & commercial)

finance water efficiency improvements. 

During the drought, we stopped irrigating our gardens and landscapes with drinking water. We flushed our toilets with drinking water less frequently. We began to ask, why are we using highly treated, valuable drinking water to flush our toilets, water our lawns, cool our buildings and wash our cars?

Shouldn't our utilities provide us with a new water service and

help us capture and reuse the water running off our rooftops and driveways for irrigation? In the 20th century stormwater was an expensive water quality problem (and a source of flooding). In the 21st century stormwater (see stormwater article) should become another water resource.

Shouldn't our utilities provide us with treated wastewater or

reclaimed water for industrial processing, cooling and lawn and golf course irrigation -- instead of drinking water?  Treated wastewater or reclaimed water (see reclaimed water article) should also become a resource in the 21st century. 

Global competition for water, energy, materials and land/food & fuel is increasing. We must apply new technologies, markets and policies to transform the way we use these resources to sustain both our environment and our economy.