Public Versus Private: Does It Matter for Water Conservation? Insights from California

This article asks three connected questions: First, does the public view private and public utilities differently, and if so, does this affect attitudes to conservation? Second, do public and private utilities differ in their approaches to conservation? Finally, do differences in the approaches of the utilities, if any, relate to differences in public attitudes? We survey public attitudes in California toward (hypothetical but plausible) voluntary and mandated water conservation, as well as to price increases, during a recent period of shortage. We do this by interviewing households in three pairs of adjacent public and private utilities. We also survey managers of public and private urban water utilities to see if they differ in their approaches to conservation and to their customers. On the user side we do not find pronounced differences, though a minority of customers in all private companies would be more willing to conserve or pay higher prices under a public operator. No respondent in public utility said the reverse. Negative attitudes toward private operators were most pronounced in the pair marked by a controversial recent privatization and a price hike. Nonetheless, we find that California’s history of recurrent droughts and the visible role of the state in water supply and drought management undermine the distinction between public and private. Private utilities themselves work to underplay the distinction by stressing the collective ownership of the water source and the collective value of conservation. Overall, California’s public utilities appear more proactive and target-oriented in asking their customers to conserve than their private counterparts and the state continues to be important in legitimating and guiding conservation behavior, whether the utility is in public hands or private.     

THE POLITICAL INFLUENCE OF RESIDENTIAL CONSUMERS ON WATER RATES1

ABSTRACT: The regulatory process such as that for water rates can be viewed as a bargaining process between regulators, utility management, and consumers. This bargaining process involves both political and economic influences. In an attempt to empirically verify that utility rates are a product of both economic and political factors, a sample of publicly-owned water utilities was subjected to regression analysis. As expected, cost and cost-related factors were positive and significant determinants of residential water rates. Using an admittedly imperfect measure of residential user political influence, there was evidence that increased political activity results in lower water rates. Furthermore, the political influence and water rate linkage is more evident in small water utilities than in larger suppliers.     

The influence of the operational environment on the efficiency of water utilities

Adjusting for the operational environment in studies of performance measurement is very important, otherwise the analysis may lead to unrealistic scores, especially when its influence on costs is high, such as in the water utilities. In this paper, we study the influence of exogenous variables on the water utilities performance by applying conditional efficiency measures based on the order-m method and its probabilistic formulation. We use a sample of 66 water utilities operating between 2002 and 2008, representing about 70% of the Portuguese population. Our research suggests that inefficiency of Portuguese water utilities is substantial for some utilities: several exogenous variables might influence it considerably. For example, regulation has a positive influence on efficiency but when drinking water supply and wastewater services are provided by the same utility or when the wholesale and retail activities are provided together, the performance is lower. The effect of ownership is inconclusive and the variables residential customers, water source, peak factor, and density of customers have a mixed influence on performance which varies according to their scores.     

Development of performance indicators for small Quebec drinking water utilities

This study presents a comparative performance analysis of small drinking water utilities in Quebec (Canada). The investigation bears on 10 utilities that use surface water or groundwater under the direct influence of runoff and apply chlorination as the only treatment before distribution. The utilities under study were divided into two groups: four utilities that had never or rarely provided water violating provincial drinking water microbiological standards (relating to fecal and/or total coliform bacteria), called nonproblematic utilities, and six utilities that quite often violated the standards, designated as problematic utilities. The objective of the study is to develop utility performance indicators capable of explaining current and historical distributed water quality. Indicators are based on operational, infrastructure, and maintenance characteristics of utilities that are integrated using a multivariable weight-based index. Results show that utility performance indicators are systematically better for the nonproblematic group of utilities as compared to the problematic group. Disinfection-related, infrastructure, and maintenance variables are those that most contributed to indicator values. Sensitivity analyses served to assess the impact on indicator results of excluding variables and changing their weights.     

Regulation and private participation in the water and sanitation sector

Private-sector participation is widely perceived to be the solution to the failure of many publicly owned and managed water utilities to operate efficiently and make the investments required to meet community needs. However, there are no guarantees that privatisation will actually yield the desired performance improvements. Simply converting a public-sector monopoly into a private one provides no competitive incentives for the utility to operate efficiently, make appropriate investments or respond to consumer demands. Likewise, privatisation per se need do little to improve sector performance if governments are unwilling or unable to tackle such underlying problems as overmanning, uneconomic water pricing policies, financing the provision of public and merit goods, and restricting over-intrusive political intervention.
Given the characteristics of the water and sanitation sector it is inevitable that some form of continued public regulation of the private companies will be necessary. The regulatory burden can be reduced by adopting a competitive form of privatisation, choosing a more competitive sector structure and devising an appropriate regulatory regime. However, it has to be recognised that there will be a trade-off between making a venture attractive to private firms and introducing a notionally 'ideal' regulatory system. Regulation, in practice, is as much about creating the conditions under which private firms can operate effectively and efficiently as it is about protecting specific customer and public interests.     

AN ASSESSMENT OF WATER UTILITY INFORMATION SYSTEMS AND THEIR USE OF COMPUTERS1

To provide an overview of water utility information systems and the extent of computer use, a direct mail survey of all water utilities serving populations of 2,000 or more in the tri-state area - Ohio, Indiana, and Kentucky - was conducted. The following was determined: 1) utility profile information, e.g., public/private ownership, age, number of accounts, etc.; 2) an assessment of the degree of computerization presently in place to perform various functions; and 3) an assessment of any plans that the utilities may have for future computerization. To analyze the data, an index of computerization was defined as the number of departments or major activity areas of each utility that presently have some computerization. The relationship between the degree of computerization (measured by this index) and a utility's profile in terms of population served, annual revenue generated, and the number of customer accounts is discussed for each state in the survey. Discriminant analysis revealed strong significant differences between utilities that plan to use computers and those that do not. The differences were identified by the authors. Survey results revealed a rather limited use of computers in the tri-state area. Enormous potential exists in small and medium sized utilities for computerization to improve operational efficiency.     

MODELING WATER UTILITY FINANCIAL PERFORMANCE1

ABSTRACT: The purpose of this paper is to present a theory and model for assessing the financial health of public water systems. Using financial information from 25 water utilities in Georgia, the paper seeks to identify the causal relationships between the financial performance of a water utility and its fiscal position. The need for a theoretical understanding of water utility financial health is the result of the increasingly stringent performance requirements under the Safe Drinking Water Act (SDWA). The issue has become particularly important for small water systems that will be exposed to significant financial demands. A set of financial ratios were developed and tested in a model that was based on liquid asset theory. The model contained five variables designed to account for the size of liquid assets, current debt, cash-flow, and the level of expenses. The variables fit the need of water utilities: to provide an adequate level of operation and maintenance to meet current and future system needs as well as SDWA standards.     

Water resources issues of small island developing states

The water resources of most small island developing states (SIDS) are often very limited and require special consideration to ensure that they are developed and managed in a sustainable manner. Many small islands, typically located in the humid tropics, have no surface water resources and rely on limited groundwater resources in the form of thin freshwater lenses. The exposed location of small islands makes them particularly vulnerable to natural disasters such as cyclones, floods and droughts. Pollution from population centres and from agricultural and other activities is an increasing problem. This article provides an overview of the water resources of small islands, and the main problems and issues related to water resources. Some suggested solutions, based on practical experiences, are offered for water resource assessment and monitoring programmes, and water resource development. Water resource policy, planning and management issues are also addressed, and suggested approaches for resolving some of the major water resource problems presented.     

ENSO: EXTREME CLIMATE EVENTS AND THEIR IMPACTS ON ASIAN DELTAS1

ABSTRACT: Proxy climate data for the last 500 years collected from the archives of counties in the Yangtze River Delta, China, were analyzed to identify the occurrence of extreme climate events, the pattern of such occurrences and their relationships to El Nino-Southern Oscillation (ENSO). This study identified the cycle periods of 3.5, 5.5 and 8.6 years for floods and 18.5 years for droughts in the Yangtze River Delta during the last 500 year period and noted 16 regional (delta wide) extreme events during this period. All regional (delta wide) extreme climate events during the last 500 years (since 1500 A.D.) occurred either during or immediately after ENSO (5–6 year) activities. Hydrological impacts of extreme climate events, such as major floods and droughts, on human systems have long been among the foremost concerns of the Pacific Rim countries. Management of systems increasingly dominated by humans, such as Asian delta regions, should, therefore, include consideration of major climate variability, ENSO events and the extent of climate changes, as well as consideration of the trends associated with human growth and institutional changes.     

Ten Years After Mar del Plata

This paper describes the main conclusions of the Interregional Symposium on Improved Efficiency in Water Resources Management: Follow-up to Mar del Plata, which was held in New York in January 1987. The group of 70 water specialists came up with suggestions for governments and international organizations to speed up water resources development in the coming decade. Major issues covered were efficiency in the management of financial resources; human resources; technology; water quality; and natural hazards, consisting of floods and droughts.     

Nonstationary Water Planning: An Overview of Several Promising Planning Methods1

Waage, Marc D. and Laurna Kaatz, 2011. Nonstationary Water Planning: An Overview of Several Promising Planning Methods. Journal of the American Water Resources Association (JAWRA) 47(3):535‐540. DOI: 10.1111/j.1752‐1688.2011.00547.x Abstract: Climate change is challenging the way water utilities plan for the future. Observed warming and climate model projections now call into question the stability of future water quantity and quality. As water utilities cope with preparing for the large range of possible changes in climate and the resulting impacts on their water systems, many are searching for planning techniques to help them consider multiple possible conditions to better prepare for a different, more uncertain, future. Many utilities need these techniques because they cannot afford to delay significant decisions while waiting for scientific improvements to narrow the range of potential climate change impacts. Several promising methods are being tested in water utility planning and presented here for other water utilities to consider. The methods include traditional scenario planning, classic decision making, robust decision making, real options, and portfolio planning. Unfortunately, for utilities vulnerable to climate change impacts, there is no one‐size‐fits‐all planning solution. Every planning process must be tailored to the needs and capabilities of the individual utility.     

A 576‐Year Weber River Streamflow Reconstruction from Tree Rings for Water Resource Risk Assessment in the Wasatch Front,Utah

We present a 576‐year tree‐ring‐based reconstruction of streamflow for northern Utah's Weber River that exhibits considerable interannual and decadal‐scale variability. While the 20th Century instrumental period includes several extreme individual dry years, it was the century with the fewest such years of the entire reconstruction. Extended droughts were more severe in duration, magnitude, and intensity prior to the instrumental record, including the most protracted drought of the record, which spanned 16 years from 1703 to 1718. Extreme wet years and periods are also a regular feature of the reconstruction. A strong early 17th Century pluvial exceeds the early 20th Century pluvial in magnitude, duration, and intensity, and dwarfs the 1980s wet period that caused significant flooding along the Wasatch Front. The long‐term hydroclimatology of northern Utah is marked by considerable uncertainty; hence, our reconstruction provides water managers with a more complete record of water resource variability for assessment of the risk of droughts and floods for one of the largest and most rapidly growing population centers in the Intermountain West.     

Universal access to water and sanitation: Why the private sector must participate

Against the background of the current state of provision of drinking water and sanitation in the world — with one billion lacking safe water, and 2.2 billion not having adequate sanitation — this article argues that private participation is necessary. The most important issues for the management of water utilities in the 21^st century are identified as mobilizing investment for the highly capital intensive operation of water supply and sanitation infrastructure, and achieving efficiency in the delivery of services. The article highlights the issues that need to be raised if private investment is to be seriously considered as an alternative. Case studies, especially from Latin America (Argentina, Chile, Peru, Bolivia), illustrate different modes of private participation, and possible reasons for successes and failures are discussed. The article stresses that regardless of the modality of private sector involvement, on‐going government regulatory responsibility in the water sector is crucial. It suggests that regulatory policy must go beyond just setting tariffs, to develop standards for drinking water quality and waste treatment, as well as other standards. In conclusion, the article recognizes that numerous and increasingly difficult challenges face utilities in fulfilling their responsibility to deliver drinking water of adequate quality, in sufficient quantity, and at affordable prices, as well as safe and sustainable disposal of wastewaters for members of urban and rural communities.     

Integrated urban water resources management

The paper focuses on the organizational and institutional issues of water resources management strategies. It considers both as cross-sectoral issues, and in terms of the communication and coordination of activities among all levels of sector agencies. It concentrates heavily on the economic aspects of planning for urban and other water use. Over the past few decades tremendous progress has been made in providing basic water supply and sanitation to the people of the world. Nevertheless, much remains to be accomplished. The only way of resolving this problem appears to be to make the current utilities more effective economically. The single most important policy improvement would be to ensure that each utility covers its operating costs as well as its capital costs by the economic pricing of water use.     

An Experiment in Making Water Affordable: Philadelphia’s Tiered Assistance Program (TAP)

The ability to pay for water and wastewater services is a growing issue in the developed world. To this point in time, utilities have helped customers grappling with affordability issues using different types of customer assistance programs (CAPs). Income‐based billing approaches differ from CAPs in that bills are structured so as to be affordable for customers at the outset. Recently, the City of Philadelphia implemented an innovative program to work towards resolving the affordability problem in their city using income‐based billing. This tiered assistance program or TAP structures bills for water, wastewater, and stormwater services to program enrollees’ income. Given the innovative nature of the program, this paper describes the rollout of TAP and assesses the impact of the program on customers and utility revenues. The paper closes with a critical assessment of TAP and considerations for utilities evaluating the implementation of similar programs.     

Is Standardized Precipitation Index (SPI) a Useful Indicator to Forecast Groundwater Droughts? — Insights from a Karst Aquifer

The study sought to understand the relationships between meteorological and groundwater droughts on water levels and spring discharges in Edwards Aquifer, Texas. Standardized Precipitation Index (SPI)‐styled Standardized Groundwater Index (SGI) was used to quantify groundwater droughts. SGI time series signal was delayed and damped, while SPI was volatile. SGI values correlated well with SPI values that were observed five to eight months ago. Dynamic regression models with lagged SPI terms and autoregressive integrated moving average errors indicated a statistically significant yet weak relationship between Lag‐1 SPI and SGI. The utility of SPI for groundwater drought forecasting was minimal in this aquifer. Nonseasonal and seasonal autoregressive terms played an important role in forecasting SGI and highlighted the need for long‐term, high‐resolution monitoring to properly characterize groundwater droughts. Spring flows exhibited stronger and quicker responses to meteorological droughts than changes in storage. In aquifers with spring discharges, groundwater monitoring programs must make efforts to inventory and monitor them. Groundwater drought contingency measures can be initiated using SPI but this indicator is perhaps inappropriate to remove groundwater drought restrictions.     

Basic principles and ecological consequences of changing water regimes on nitrogen cycling in fluvial systems

Understanding the environmental consequences of changing water regimes is a daunting challenge for both resource managers and ecologists. Balancing human demands for fresh water with the needs of the environment for water in appropriate amounts and at the appropriate times are shaping the ways by which this natural resource will be used in the future. Based on past decisions that have rendered many freshwater resources unsuitable for use, we argue that river systems have a fundamental need for appropriate amounts and timing of water to maintain their biophysical integrity. Biophysical integrity is fundamental for the formulation of future sustainable management strategies. This article addresses three basic ecological principles driving the biogeochemical cycle of nitrogen in river systems. These are (1) how the mode of nitrogen delivery affects river ecosystem functioning, (2) how increasing contact between water and soil or sediment increases nitrogen retention and processing, and (3) the role of floods and droughts as important natural events that strongly influence pathways of nitrogen cycling in fluvial systems. New challenges related to the cumulative impact of water regime change, the scale of appraisal of these impacts, and the determination of the impacts due to natural and human changes are discussed. It is suggested that cost of long-term and long-distance cumulative impacts of hydrological changes should be evaluated against short-term economic benefits to determine the real environmental costs.     

How does the operational environment affect utility performance? A parametric study on the waste sector

The urban waste treatment service has been a sensitive issue for the Portuguese governments in the past decades. Among other measures, the environmental and economical issues led to the creation of a sector-specific regulator for the waste sector. Considering this atypical circumstance in the worldwide context it is worth studying the external factors that may influence the waste utilities efficiency along with the regulation role. In this regard, we applied the parametric approach of the stochastic frontier analysis to evaluate the influence of the operational environment on the urban waste services performance. The sample included 32 utilities responsible for the waste treatment service in Portugal. The results showed a negative influence of factors, such as the existence of regulation, the distance to the waste treatment facilities and the provision of other services on utility performance. We also observed some benefits from privatisation and incineration, although these options have some particular features.     

APPLICATION OF ADVANCES IN FLOOD FREQUENCY ANALYSIS1

ABSTRACT: Flood frequency analyses are frequently being made using widely available computer programs. Serious errors can result from blind acceptance of such results. Visual interpretation of observed flood series can be used for evaluation on frequency paper with compatible scales. Such frequency papers are presented in the paper. In ephemeral streams, more infrequent floods may constitute a separate set from the more frequent floods because (a) runoff producing storms cover only a portion of the contributing area, (b) transmission losses in the normally dry streambed may reduce the peak flow, and (c) some runoff may be stored in stock water ponds which therefore leads to partial area runoff. The Cunnane plotting position used in this paper is superior to the more widely used Weibull equation, having a mathematically sound basis for locating observed floods on an assumed probability.     

Resolving strategy paradoxes of water loss reduction: A synthesis in Jakarta

This paper intends to serve as a ‘thought’ piece, by opening scope for re-framing the issue of water loss reduction. The paper presents an exploration about what the term ‘strategy’ contributes to water loss reduction, through a literature review. The paper considers 10 strategic paradoxes and uses these to structure a discussion of utilities’ approaches to reducing water losses and the assumptions underlying the development and deployment of strategies to this end. The paper uses a case study of an Indonesian utility (and also draws evidence from other developing countries) to exemplify how strategies and their underlying assumptions may lead to suboptimal approaches to reducing water losses.