CAPITAL COST OF RURAL WATER DISTRIBUTION SYSTEMS1

ABSTRACT: The cost of water service to rural residents is very high compared to urban areas. This is true even after subsidization by Farmers Home Administration (FmHA) loans and grants. Capital cost data on 44 projects financed by the Ohio office of the FmHA during the period August 1968 to January 1977 are used to derive cost equations for 26 components of rural water distribution systems. These components represent 92 percent of the capital cost of the pipeline distribution systems studied. The data can be used to economically design rural water supply systems from a capital cost viewpoint. More data are needed on operation and maintenance costs as well as central and cluster well costs before totally economic system designs can be undertaken.     

THE FARM LEVEL EFFECTIVENESS OF SELECTED IRRIGATION POLICY MEASURES1

ABSTRACT: The on-farm economic effectiveness of government capital grants, subsidized interest rates, and the Canadian Wheat Board (CWB) delivery quota levels in terms of adoption and/or expansion of irrigation in Saskatchewan is tested. The annualized net income at 5 and 20 years of three representative farm types - a dryland grain farm, an irrigated grain farm, and an irrigated mixed farm - are used in the analysis. Tradeoffs between income levels and the risks associated with adoption/expansion of irrigation are evaluated using mean-standard deviation tradeoff and stochastic dominance. Risk differences arise due to reduced business risk through higher yields and increased financial risk through higher borrowing when adopting or expanding irrigation. Capital grants and subsidized interest rates are effective policy measures for dryland grain farms adopting irrigation because the farms are left in a similar risk position. However, these grants and interest rates are not effective policy measures in the medium run (5 years) for irrigated grain farms expanding irrigation because they lower the farm's risk efficiency. In the long run (20 years), the capital grants and subsidized interest rates need to be combined with open CWB delivery quotas before the risk position can be improved for irrigated grain farms expanding irrigation. Finally, the grants and interest rates need to be combined with increased irrigated hay production for risk efficiency to increase in both the medium and long run (5 and 20 years, respectively) on irrigated mixed farms expanding irrigation.     

OWNERSHIP AND WATER SYSTEM OPERATION1

ABSTRACT: Two types of organizational systems provide most of the water service in the United States. The investor-owned firm operates on a profit basis generally subject to state commission regulation. The government-owned firm is generally confronted by local control. The comparative efficiency of private versus government firm provision of water services is essentially an empirical issue. Unit costs and other operating statistics are examined for water firms of each ownership form. The analysis shows that private firms tend to have higher operation costs than do government firms, possibly attributable to wage-salary differentials. The analysis also indicates that capital investment in large government firms may result in diseconomies. The analysis creates serious doubt as to whether efficient provision of water services can be better facilitated by large mergers of either ownership form.     

CAN STATE AND LOCAL GOVERNMENTS ASSUME MORE OF THE COSTS OF WATER DEVELOPMENT?1

ABSTRACT As availability of funds in the federal budget for water development has decreased recently, pressure has increased for state and local governments to pay a larger share of the costs. In this situation a difficult question immediately arises-what is the capability of state and local governments to pay a larger share? Of course, there is no easy answer. Expenditures of public funds are policy outcomes of a government's political process in which political, economic, legal and other factors are involved in complex relationships. The traditional sources of capital funds for state and local governments include bond proceeds, tax revenues, and federal financial aid (state aid is also a major source of local government funds). The issuing of bonds is hampered by a variety of legal debt limitations, but there are means for circumventing the limitations. State and local governments vary widely in amounts of taxable resources available and in the extent to which these resources have been tapped. More effective use of revenue resources could be made in some cases. New sources of capital funds for water development ought to be considered-a fee on the use of water per se, for example. Costs associated with water use currently are imposed to cover development costs, but a state might impose additional use fees earmarked for a state water development fund.     

PREDICTING INSTANTANEOUS PEAK DEMAND IN RURAL DOMESTIC WATER SUPPLY SYSTEMS1

ABSTRACT: Many rural areas of the United States still have no public domestic water systems. Typical land use patterns in these areas may require 1/2 mile or more of pipe per farm connection. Public systems serving these areas are economically feasible only if realistic short-term peak demand standards are available for their design. The lack of reliable data upon which to establish such criteria has resulted in a large variation in criteria among state and federal agencies involved in financing and in approving construction of these systems. During the summer of 1975 three distribution laterals of a rural system in Utah were master metered and instantaneous peak flows were recorded for 4 months. The metered lines served 4, 12, and 22 farm houses each. The frequency distribution of peak flows has been analyzed and compared with that developed during similar research in Mississippi and with the existing design standards of the Farmers Home Administration and the State of Utah.     

DISTRIBUTIONAL IMPACTS OF ENVIRONMENTAL MANAGEMENT: FEDERAL GRANTS FOR WATER POLLUTION CONTROL1

ABSTRACT: The income redistribution effects of waste water treatment grants are estimated for each state participating in five federal programs. Both gross and net effects per state and per capita are discussed. The impact of the tax structure used to finance such grants and the grant formulae are investigated.     

USING CONTINGENT VALUATION AND BENEFIT TRANSFER TO EVALUATE WATER SUPPLY IMPROVEMENT BENEFITS1

ABSTRACT: Many water systems in small cities and rural areas throughout the United States are facing water quality and supply problems. These problems are typically not the result of an unexpected event, but are the result of growth trends or decreasing water quality experienced over several years. This analysis uses the contingent valuation and benefit transfer methods to evaluate the willingness to pay for a rural water system in northcentral Montana. Both of the procedures resulted in similar values, ranging from about $4.05 to $7.50 per household per month for urban residents and $5.40 to $11.50 per household per month for rural residents, which is equal to 11 percent to 23 percent of current average water costs. The willingness to pay estimates do not include non-household water users. This analysis shows that useful planning information can be obtained from relatively inexpensive contingent valuation mail survey data and the benefit transfer method as long as the limitations of the data are understood. The willingness to pay for ensuring good quality rural water supplies in the future is likely to be low compared to the costs of extensive diversion and treatment systems. Willingness to pay estimates provide decision makers with information that can be used to avoid building a large water supply system that water users do not want to connect to because of high costs.     

WHO GETS CLEAN WATER? AID ALLOCATION TO SMALL WATER SYSTEMS IN PENNSYLVANIA1

ABSTRACT: Research on the condition of drinking water provision in the United States documents the inequitable financial impact of environmental regulations on small water systems (those serving 3,300 or fewer people). While a variety of federal and state financial assistance programs are available for water systems, few quantitative analyses have evaluated the success of these programs in alleviating the problems of small systems. A case study of the largest aid initiative for water supply infrastructure in Pennsylvania provides the empirical framework through which to analyze government funding opportunities for water systems. This study examines the allocation practices of the Pennsylvania Infrastructure Investment Authority (PENNVEST) to water systems of varying sizes. Utilizing data from PENNVEST applications and the Pennsylvania Department of Environmental Protection, the distribution of PENNVEST award recipients and denied applicants by size characteristics are compared. The study indicates that very small water systems (those serving 500 or fewer) do not apply for or receive funds with the same frequency as their larger counterparts. Understanding the allocation of awards from PENNVEST offers insight into the ability of small communities to access capital for water supply infrastructure.     

Value of arsenic-free drinking water to rural households in Bangladesh

Using contingent valuation survey data for about 2700 households in rural Bangladesh, and applying a multinomial logit model, the paper estimates the value of arsenic-free drinking water to the rural people. The estimates indicate that the rural people in arsenic-affected areas of Bangladesh place a low value on arsenic-free drinking water. It is about 10-14 percent of the amount they are willing to pay for piped water and only about 0.2-0.3 percent of the average household income. The implication of the result is that robust but costly arsenic reduction technologies such as activated alumina technology may find little social acceptance, unless heavily subsidized.     

Immersion frying for the thermal drying of sewage sludge: an economic assessment

This paper presents an economic study of a novel thermal fry-drying technology which transforms sewage sludge and recycled cooking oil (RCO) into a solid fuel. The process is shown to have significant potential advantage in terms of capital costs (by factors of several times) and comparable operating costs. Three potential variants of the process have been simulated and costed in terms of both capital and operating requirements for a commercial scale of operation. The differences are in the energy recovery systems, which include a simple condensation of the evaporated water and two different heat pump configurations. Simple condensation provides the simplest process, but the energy efficiency gain of an open heat pump offset this, making it economically somewhat more attractive. In terms of operating costs, current sludge dryers are dominated by maintenance and energy requirements, while for fry-drying these are comparatively small. Fry-drying running costs are dominated by provision of makeup waste oil. Cost reduction could focus on cheaper waste oil, e.g. from grease trap waste.     

A Comparison of Decentralized Minigrids and Dispersed Diesels for Irrigation Pumping in Sahelian Africa

A key ingredient in the expansion of agricultural output in many developing countries is the availability of reliable and cost-effective energy supplies for irrigation. Such supplies are also fundamental to any strategy to stimulate rural economic development. This paper compares the costs of water pumping through the use of commonly-used, small diesel-driven pumpsets versus a decentralized generator connected to a small electrified grid. An example representative of irrigated cropping systems found in the Senegal River Basin is used to compare costs. The results show that pumping costs from a decentralized power supply and minigrid are roughly comparable with those of direct-drive diesel pumpsets. Further, excess capacity would be available to provide power for small industries and other rural needs. In many sparsely populated rural locations where low capacity factors make central grid extension uneconomic, a minigrid with a guaranteed load of irrigation pumping can be an attractive alternative for providing power for rural development.     

Addressing Declining Appropriations for Bureau of Reclamation Infrastructure: Policies Needed for Enabling Private Finance

Western water infrastructure was funded in the early and mid‐20th Century through federal financing through the Bureau of Reclamation. Over the past 30 years, federal financing has been less forthcoming, which has been commensurate with an increase in the need for financing rehabilitation and replacement of western irrigation infrastructure. As federal appropriations have declined, there has been increased interest in alternative approaches to infrastructure including public–private partnerships (P3s), loan guarantees, or title transfer of federal infrastructure. However, two of these approaches — P3s and loan guarantees — are precluded by existing federal budgetary policies, particularly Office of Management and Budget (OMB) scoring practices. If the OMB changed its policies for P3s or loan guarantees, private capital could play an important role in recapitalizing aging Reclamation infrastructure.     

Financing investments in water supply and sanitation

Financing investments in water supply and sanitation has been a perennial problem in all countries of Latin America and the Caribbean. The contribution to capital funding derived from the income of operating companies has been very small, a direct consequence of unrealistically low tariffs. The situation has worsened with the increasing need to provide sewage treatment to reduce the gross pollution of most water bodies in the vicinity of large cities. This paper, on the basis of recent studies conducted in EC LAC, explores the practicability of the self-financing of water supply and sanitation services, including sewage treatment, through the income derived from tariffs. If this is to be achieved then it is important that the entire population pays for services, an issue of some importance given the unequal distribution of income in most cities of the region. The conclusion reached is that on the basis of the available information on costs, together with the experience of some countries, financing through tariffs is feasible, particularly if subsidies are provided to the poorest households. Tariff based financing is probably the only means of achieving universal coverage by the year 2000 as well as sewage treatment, the rehabilitation of existing systems, maintenance and the necessary institutional development .     

A RATIONALE FOR THE REGIONALIZATION OF PUBLIC WATER SYSTEMS1

ABSTRACT. A rationale is set forth for requiring and/or encouraging the consolidation or regionalization of all systems beneath certain population size levels based on the small water systems’ capability to produce an adequate supply of safe drinking water at a reasonable cost to customers. Estimates for basic costs of water service including personnel, other operation and maintenance and capital are made and a range of water rates is suggested based on reasonableness and acceptability to customers. Guidelines are then drawn for a moderate rate of $10.00 per month and an upper limit rate of $15.00 per month to show the sizes at which public water systems might be expected to achieve fiscal viability. Finally, recommendations are made to State and Federal governmental agencies concerning possible legislation, plans and programs to achieve better public water service through the regionalization or consolidation of small public water systems.     

An Assessment of U.S. Stream Compensatory Mitigation Policy: Necessary Changes to Protect Ecosystem Functions and Services

Compensatory mitigation of impacted streams and wetlands has increased over the past two decades, with the associated industry spending over US$2.9 billion in aquatic restoration annually. Despite these expenditures, evaluations by the National Research Council and U.S. Government Accountability Office have provided evidence that compensatory mitigation practices are failing to protect aquatic resource functions and services, and vague federal policy and inadequate evaluation of compensatory mitigation projects are to blame. To address these weaknesses, an update to federal regulations on compensatory mitigation was released in 2008. Additionally, the 2012 Reissuance of Nationwide Permits, some of which affects compensatory stream mitigation, was recently published. Current policy, as reflected in these documents, still uses nonspecific language to direct compensatory stream mitigation leaving most implementation decisions to the local U.S. Army Corps of Engineers district. The majority of federal mitigation policy has focused on wetland compensation, with other aquatic resources receiving less attention (e.g., streams). In this article, weaknesses of current policy are discussed, as are suggested policy changes to minimize the loss of stream ecosystem functions and services. Compensatory mitigation policy should clearly define key terms, incorporate adaptive management procedures, and provide guidelines for determining mitigation costs and compensation ratio requirements.     

EFFICIENCY PROBLEMS FROM USER FEES IN MUNICIPAL WASTEWATER TREATMENT1

ABSTRACT: The Environmental Protection Agency administers a construction grant program to encourage abatement of wastewater pollution by sharing with municipalities the costs of wastewater treatment facilities. The enabling legislation (P.L. 92–500) specifies that EPA's cost share will be 75% of construction costs. It further requires municipalities to collect user fees from industrial users of the facilities to repay that part of the federal grant allocable to the treatment of industrial wastewater. The municipality must return half of the user fees collected to the U.S. Treasury; the municipality is allowed to retain the remaining half. Retention by municipalities of these user fees lowers their effective cost shares and results in the following consequences: (1) a bias for municipalities to select certain kinds of abatement techniques regardless of whether or not they are the least-cost techniques from the national perspective; (2) a bias for municipalities to select larger-than-optimal scales of abatement facilities; (3) a hidden federal subsidy to industry; and (4) grants that favor industrial communities. This article examines the legislative and regulatory requirements for user charges, derives the algebraic expressions for calculating the real federal, municipal, and industrial cost shares with user fees; computes municipal cost shares for selected values of the determinant factors; evaluates efficiency and other consequences of current user fee arrangements; and concludes that the efficiency distortions brought about by the impacts of user fees on cost sharing could be eliminated by requiring that all user fees collected from industry against the federal cost share be returned to the U.S. Treasury.     

PEAK PERIOD DESIGN STANDARDS FOR SMALL WESTERN U.S. WATER SUPPLY SYSTEMS1

ABSTRACT: In order to determine design capacities for various components of municipal and rural domestic water supply systems, engineers must estimate water requirements for an entire year (water rights), for the peak season (reservoir storage), for the peak day (pump or treatment plant size), and for peak hour (pipeline sizes). Historically, per capita water use rates have varied greatly between systems, particularly in semiarid regions where outdoor demands are large. The resulting uncertainty in design capacity estimates can cause either inadequate capacities or premature investment. In order to minimize that uncertainty multiple regression and frequency analyses were made of the various water demand parameters mentioned above for 14 systems in Utah and Colorado. Specifically, demand functions are reported for average month, peak month, and peak day. Peak hour demands were also studied but are reported in a different paper. The independent variables which were significant for monthly and daily demands were price of water and an outdoor use index which includes the effect of variation in landscaped area and accounts for use of supplementary ditch or pressure irrigation systems. The demand functions were developed with data from systems varying in size from very small low density rural systems to Salt Lake City's water system. The correlation coefficients (R²) vary from 0.80 to 0.95.     

Traditional water bodies and ecosystem services: Empirical evidence from West Bengal,India

Traditional water harvesting systems are multi-functional in nature and provide a variety of ecosystem services that contribute to the overall wellbeing of local people. This study aims to identify and analyze the factors influencing the variations in the level of awareness across households residing around three selected traditional water bodies in the Indian state of West Bengal. Ordinary least square (OLS) regression models have been used to identify and analyze the determinants of household perception on ecosystem services from tank water bodies. Results show that while a majority of households have strong perceptions on the provisioning and cultural ecosystem services of the tanks, the household perceptions on regulating and supporting services of the tank is found to be relatively weak. Households belonging to lower caste and poor are likely to be more dependent on ecosystem services from tanks than upper caste and rich households, and hence they have better perceptions of provisioning ecosystem services. Households’ awareness about provisioning ecosystem services is negatively related to their level of education and wealth. It is observed that household awareness about regulating and supporting ecosystem services is positively associated with the level of education of the households, ownership of tube well and private tanks. While it is essential to consider household perception on all the ecosystem services for sustainable use and management of traditional water harvesting systems, incorporating the local norms, customs and preferences in policy design are critical for achieving effective conservation outcomes.     

RURAL HOUSEHOLD RESPONSE TO WATER CONTAMINATION IN WEST VIRGINIA1

ABSTRACT: About one-third of all West Virginians obtain domestic water from private water wells. In this research, mail and telephone surveys were used to investigate household responses to bacteria, mineral, and organic chemical contamination of domestic water supplies. Of households who were informed of contamination and acknowledged the problem, over 85 percent took action to avoid exposure to water contamination problems. The most common action was to clean and/or repair the water system (55.9 percent of valid surveys). Approximately 45 percent of households made investments of either a water treatment system, a new water source, or correction of contamination source. The average, annual economic cost of rural household actions was $320 for bacteria, $357 for minerals, and $1,090 for organic contamination. These economic costs represent a lower bound estimate for rural household willingness-to-pay (WTP) for a reduction in domestic water contamination from government action. On average, investment actions had lower annual economic costs than noninvestment actions of boiling and hauling water so that households who undertook investment actions in response to water contamination would have a lower WTP for government action to reduce water contamination. When effectiveness of water treatment systems was evaluated, treatment systems which require minimal household maintenance were found to reduce exposure to water contamination to safe levels as households intended when they installed the system. Treatment systems which were commonly ineffective included those which required continual maintenance (e.g., chiorinators) or were not designed to solve the contaminant problem for which they were purchased (e.g., filter systems for bacteria).     

A City Wide Assessment of the Financial Benefits of Rainwater Harvesting in Mexico City

We assess the potential financial benefits of rooftop rainwater harvesting (RWH) in Mexico City from the perspective of property owners and entrepreneurs. A bottom‐up approach was followed by evaluating RWH at individual buildings and aggregating the results to a borough/city level. We consider sector‐specific water demands, potable and nonpotable uses, and user‐specific water tariffs. We find that RWH is economically most beneficial for nondomestic users rather than for small domestic users, who are often the target of RWH interventions. Based on a net present value analysis, a potable RWH system is not favored for most domestic users under the current subsidized municipal water tariff structure. Our analysis only considers capital and maintenance expenses, and not other benefits related to increased access to water and reliability, or social benefits from a switch to a RWH system. If the initial capital expense for RWH is partly financed by transferring the water subsidy to an entrepreneur, then RWH becomes financially attractive for a wide range of domestic users. To improve water access in Mexico City, RWH is attractive in the most marginalized boroughs where water use is currently lower and precipitation is higher. For domestic users relying on trucked water, RWH can have great financial benefits. Our approach provides quantitative data with high spatial specificity, highlighting the places and types of users that would benefit most from RWH.