Re-examining the water affordability: A comparison of alternative measures

Water affordability is determined by the percentage of income households that must allocate to municipal water services, while factoring in essential or basic needs water use. With the rise in water prices reported in most areas of the country along with somewhat stagnant income growth—a combination that suggests ceteris paribus—more of a household's disposable income is being spent on water services. This paper adds to the discussion in three ways. First, given the lack of a consistent definition for “affordability” and the subjective connotation associated with such a term, we develop and compare five different water expenditure ratios, including two different measures of water for essential needs, as well as measures for indoor, efficient, and actual water use. Second, because of the granularity of our data, we illustrate how such “affordability” measures can vary significantly within a water district and thus highlight how using district- or county-level income measures can mask the degree to which affordability is an issue for households living in low-income block groups. Our results indicate that the choice of income measure and type of water service use can influence affordability measures substantially.     

Residential Water Demand Management: Lessons from Aurora,Colorado1

Abstract: Residential water demand is a function of several factors, some of which are within the control of water utilities (e.g., price, water restrictions, rebate programs) and some of which are not (e.g., climate and weather, demographic characteristics). In this study of Aurora, Colorado, factors influencing residential water demand are reviewed during a turbulent drought period (2000‐2005). Findings expand the understanding of residential demand in at least three salient ways: first, by documenting that pricing and outdoor water restriction policies interact with each other ensuring that total water savings are not additive of each program operating independently; second, by showing that the effectiveness of pricing and restrictions policies varies among different classes of customers (i.e., low, middle, and high volume water users) and between predrought and drought periods; and third, in demonstrating that real‐time information about consumptive use (via the Water Smart Reader) helps customers reach water‐use targets.     

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.     

Conservation‐Induced Wastewater Flow Reductions Improve Nitrogen Removal: Evidence from New York City1

Abstract: Water resources are under increasing pressure to meet potable supply needs while sustaining aquatic ecosystems and fisheries. Growing populations and enforcement of the Total Maximum Daily Load provisions of the Clean Water Act present public water and wastewater utilities with costly options to meet potable water demands and reduce pollutant discharges into receiving waters. This paper documents that New York City’s comprehensive water conservation program – designed to extend the city’s safe yield of potable water—has also resulted in reduced nitrogen discharges from the city’s water pollution control plants during a period of population increases. This paper demonstrates and quantifies the effects that wastewater inflow volume reductions have on increased nitrogen removal, controlling for plant process changes. Conservation programs have saved the city billions of dollars in delayed or avoided capital improvements to both water and wastewater treatment plants, and have enabled the city to meet interim effluent discharge standards.     

A Watershed Approach to Improve Water Quality: Case Study of Clean Water Services’ Tualatin River Program1

Cochran, Bobby and Charles Logue, 2011. A Watershed Approach to Improve Water Quality: Case Study of Clean Water Services’ Tualatin River Program. Journal of the American Water Resources Association (JAWRA) 47(1):29‐38. DOI: 10.1111/j.1752‐1688.2010.00491.x Abstract: Over the last five years, Clean Water Services developed and implemented a program to offset thermal load discharged from its wastewater facilities to the Tualatin River by planting trees to shade streams and augmenting summertime instream flows. The program has overcome challenges facing many of the nation’s water quality trading programs to not only gain consensus on the frameworks needed to authorize trading, but also provide a broad range of ecosystem services. This paper compares the Tualatin case study with some of the commonly cited factors of successful trading programs.     

A SURVEY OF STATE WATER CONSERVATION PROGRAMS IN THE U.S.1

ABSTRACT: Adequate water supplies are critical to the maintenance of a community's health and economic well-being. Across the nation communities are struggling to meet an expanding demand for water from municipal, industrial, agricultural, recreation, water quality, and power generation users. As the demand grows and communities actively compete with one another for a limited water supply, states are being called upon to help solve the problem. One possible solution that is being used in many areas is the development and implementation of a water conservation program to stretch the limited supply as far as possible. using a mailed survey, state water conservation programs and some of the characteristics of the different programs were documented. Responses to the nationwide survey were obtained from all 50 states. The specific water conservation program elements on which information was received from the survey included laws and restricted use, community assistance, education, research, and other services. Recommendations for states developing or considering the development of a water conservation program are outlined.     

NONPRICE WATER CONSERVATION PROGRAMS AS A DEMAND MANAGEMENT TOOL1

ABSTRACT: Water providers nationwide are implementing nonprice conservation measures such as education, public information, appliance retrofit and ordinances, with the expectation that these programs will reduce residential water demand. However, little empirical information exists on the effectiveness of nonprice conservation programs in reducing water demand. Previous econometric studies indicate these programs have had minimal impact. We examine the types and number of major nonprice conservation programs that have been implemented during an 11-year period in seven cities in the southwestern United States. A cross sectional, monthly time series residential water demand model, with parameters to control for variation in prices, temperature, precipitation and other factors, was used to empirically investigate the effectiveness of nonprice conservation programs in reducing water demand. We found significant reductions in use ranging between 1.1 percent and 4.0 percent per program. Because of the lack of information, we were unable to distinguish the effectiveness of individual or specific types of programs. Beyond finding that nonprice programs can be effective in reducing demand, questions regarding the efficiency and benefits to be achieved by conservation remain. As a step towards separating and evaluating the effects of individual programs, program benefits and efficiency, we recommend that utilities maintain more detailed and consistent information regarding the implementation of their nonprice programs.     

Where Did the Agricultural Nonpoint Source Trades Go? Lessons from Virginia Water Quality Trading Programs

Governmental agencies, nongovernmental organizations, and agricultural organizations promote water quality trading programs as an innovative policy to engage agricultural producers in conservation activities. Cost analyses suggest regulated sources can reduce compliance costs by purchasing agricultural nonpoint source credits. Yet, such “point‐nonpoint” trades are rare. This article assesses the demand for agricultural nonpoint sources in well‐developed nutrient trading programs in Virginia for industrial and municipal wastewater treatment plants, municipal stormwater programs, and land developers. Evidence suggests nutrient trading programs in Virginia will not stimulate investments in pollutant reduction practices on working agricultural lands. The lack of demand for agricultural nonpoint source credits can be attributed to a substantial degree to the design features and incentives present in multiple overlapping regulatory programs. The legal setting that dampens regulated source demand for nonpoint source credits in Virginia is broadly representative of conditions found elsewhere in the United States.     

ECONOMIES ASSOCIATED WITH SIZE OF WATER UTILITIES AND COMMUNITIES SERVED IN NEW HAMPSHIRE AND NEW ENGLAND1

ABSTRACT. This study investigates economies associated with size of New England water utilities. Regression analysis techniques were applied to annual water cost and production data reported in the American Directory of Water Utilities (1968-1969). Modest economies of size in the production of water were found. Because in large communities more water is used per person, total cost increases at a slightly faster rate than population increases, but per unit costs of producing water decline. Substantial economies occurred when the number of customers was held constant and volume of water per customer increased. This study indicates possible economies when two or more of the many very small utilities combine activities to form a larger unit and by encouraging present customers to use more water.     

Water Quality Model Uncertainty Analysis of a Point‐Point Source Phosphorus Trading Program1

Kardos, Josef S. and Christopher C. Obropta, 2011. Water Quality Model Uncertainty Analysis of a Point‐Point Source Phosphorus Trading Program. Journal of the American Water Resources Association (JAWRA) 47(6):1317–1337. DOI: 10.1111/j.1752‐1688.2011.00591.x Abstract: Water quality modeling is a major source of scientific uncertainty in the Total Maximum Daily Load (TMDL) process. The effects of these uncertainties extend to water quality trading programs designed to implement TMDLs. This study examines the effects of water quality model uncertainty on a nutrient trading program. The study builds on previous work to design a phosphorus trading program for the Nontidal Passaic River Basin in New Jersey that would implement the watershed TMDL for total phosphorus (TP). The study identified how water quality model uncertainty affects outcomes of potential trades of TP between wastewater treatment plants. The uncertainty analysis found no evidence to suggest that the outcome of trades between wastewater treatment plants, as compared with command and control regulation, will significantly increase uncertainty in the attainment of dissolved oxygen surface water quality standards, site‐specific chlorophyll a criteria, and reduction targets for diverted TP load at potential hot spots in the watershed. Each simulated trading scenario demonstrated parity with or improvement from the command and control approach at the TMDL critical locations, and low risk of hot spots elsewhere.     

BENEFITS OF ITERATIVE WATER SUPPLY FORECASTING IN THE WASHINGTON,D.C., METROPOLITAN AREA1

The three largest water utilities in the Washington, D.C., metropolitan area (WMA) rely on the Potomac River and its reservoirs for water supply. These utilities have committed to a periodic review of the system's adequacy to meet future demands. In 1990, 1995, 2000, and again in 2004 (for publication in 2005) the utilities requested that the Interstate Commission on the Potomac River Basin (ICPRB) conduct a 20‐year water demand and resource adequacy study to fulfill this need. The selection of the five‐year interval provides multiple benefits. It allows regular updates and incorporation of recent demographic forecasts, and it increases visibility and understanding of the adequacy of the region's water resources. It also provides adequate time to conduct research on the physical system and to incorporate modifications based on this research into subsequent studies. The studies and lessons learned are presented in this case study of the WMA. The work has been a natural outgrowth of a long history of cooperative water supply planning and management among the main WMA water utilities and ICPRB.     

NUTRIENT CONTRIBUTION OF NONPOINT SOURCE RUNOFF IN THE LAS VEGAS VALLEY1

ABSTRACT: A Geographic Information System (GIS) based non‐point source runoff model is developed for the Las Vegas Valley, Nevada, to estimate the nutrient loads during the years 2000 and 2001. The estimated nonpoint source loads are compared with current wastewater treatment facilities loads to determine the non‐point source contribution of total phosphorus (TP), total nitrogen (TN), and total suspended solids (TSS) on a monthly and annual time scale. An innovative calibration procedure is used to estimate the pollutant concentrations for different land uses based on available water quality data at the outlet. Results indicate that the pollutant concentrations are higher for the Las Vegas Valley than previous published values for semi‐arid and arid regions. The total TP and TN loads from nonpoint sources are approximately 15 percent and 4 percent, respectively, of the total load to the receiving water body, Lake Mead. The TP loads during wet periods approach the permitted loads from the wastewater treatment plants that discharge into Las Vegas Wash. In addition, the GIS model is used to track pollutant loads in the stream channels for one of the subwatersheds. This is useful for planning the location of Best Management Practices to control nonpoint pollutant loads.     

EFFECTIVE WATER PRICING1

ABSTRACT: When the goal of water pricing is elevated from mere cost recovery to deriving the greatest value from scarce water and associated nonwater resources, conventional rate regimes are found to be deficient. To address the challenge of creating rates that are both efficient and budget-balancing, several theoretical and practical aspects of rate-making are considered. Purposeful selection of rate parameters for a specific billing system is demonstrated to serve efficiency and cost recovery objectives. Attention to non-accounting opportunity costs is an important system element, but these costs are often not fully borne by the utility or its customers. In situations where this issue is serious, state or federal pricing policy may be necessary.     

Residents’ Assessment of an Urban Outdoor Water Conservation Program in Guelph,Ontario1

Abstract: Many municipalities have implemented demand management of outdoor water use. Measures such as restrictions on lawn watering and promotion of xeriscaping are effective in reducing water demand during summer months, especially during dry spells. However, little research examines a key factor shaping the success of these programs: residents’ perceptions of and satisfaction with such conservation measures. This article describes an urban outdoor water conservation program in Guelph, Ontario, assesses that program from the perspective of residents, and explores socio‐economic, attitudinal and other factors associated with residents’ assessment of the program. A survey of Guelph residents revealed broad support for the program, which includes restrictions on various outdoor water uses and, under certain circumstances, a ban on lawn watering. However, there was much uncertainty among residents about the effectiveness of the program in reducing water use and the effectiveness of program enforcement. Key factors influencing residents’ assessment of the program were neighborhood, gender and environmental attitude. Implications for the design and implementation of outdoor water conservation programs are discussed, including the importance of better communication of information on program effectiveness and enforcement.     

An Ex Post Evaluation of Ohio’s Great Miami Water Quality Trading Program1

Newburn, David A. and Richard T. Woodward, 2011. An Ex Post Evaluation of Ohio’s Great Miami Water Quality Trading Program. Journal of the American Water Resources Association (JAWRA) 48(1): 156‐169. DOI: 10.1111/j.1752‐1688.2011.00601.x Abstract: Market‐based approaches to address water quality problems have resulted in only limited success, especially in trading programs involving both point and nonpoint sources. We analyze one of the largest point‐nonpoint trading programs – the Great Miami Trading Program in Ohio, administered by the Miami Conservancy District (MCD). Our evaluation focuses on the economic and institutional aspects of the program, including cost effectiveness, efficiency of bidding, transaction costs, trading ratios, and innovation. We use a unique dataset consisting of all bids from agricultural nonpoint sources and interviews of soil and water conservation district (SWCD) agents in the watershed. We find that the MCD’s reliance on county‐level SWCD offices to recruit and advise farmers has been essential to achieve relatively high rates of farmer participation. Additionally, the MCD is able to partly free ride on the administrative costs that SWCD offices receive to assist federal conservation programs, which is helpful to lower costs for a fledgling trading program. However, the involvement of SWCD offices reduced the potential cost savings from the reverse auction structure because some agents were able to learn about the threshold price over the six rounds of bidding and help farmers bid strategically. Overall, the program structure serves as an effective model for future trading programs in other regions that seek to involve agricultural nonpoint sources.     

WATER USE RELATIONSHIPS AND PROJECTION CORRESPONDING WITH REGIONAL GROWTH,SEATTLE REGION1

ABSTRACT: The paper outlines both the methods used and the results obtained in a study of the demand for municipal and industrial water for the Seattle region. The study was made as part of a regional water management study program, one objective of which is to “… identify, quantify, and set priorities for all current and future water uses …”. A basic concept in the study of municipal and industrial water use is that the demand for water is derived from the demand for output and the direct services that water provides. Principal characteristics of the study are: (1) Water use is studied by type - residential, commercial, industrial and public -with identification of factors affecting each; (2) Water demands are studied by season as well as on an annual basis; (3) Projections of future water use are tied directly to projections of economic change in the service area; and (4) The effects of alternative policies on water use are estimated. Water use levels are projected under alternative regional growth assumptions provided by the Puget Sound Governmental Conference, a regional planning agency. Thus, the water use planning is consistent with other regional planning programs in this respect. The results can be varied according to changes in specific factors affecting water use. The factors considered in the present study include: single-family residential lot size, distribution of population between single- and multi-family units, per capita water use by multi-family unit residents, and industrial and commercial water use per employee. An income elasticity of demand was estimated for single-family residential water use.     

A Level‐of‐Service Concept for Planning Future Water Supply Projects under Probabilistic Demand and Supply Framework

One of the most challenging tasks of water supply utilities is planning the timing and quantity of new water supply sources as demand for water consumption grows. Many water supply utilities target on meeting 100% of their customers' needs based on scenario‐based deterministic demand projections numbers even though there are uncertainties in both supply and demand values. This may result in under or overly conservative approach in assessing future needs. In this article, a level‐of‐service concept is introduced to capture a utility's willingness to accept a given level of risk, plan for it, and invoke a management strategy during extreme events than build a facility to accommodate those in planning for new water supply sources. Accounting for uncertainties in both supply and demand help quantify reliability by achieving a prescribed level of service. The major benefit of such an approach for planning future water supply is that it allows policy makers to evaluate the use of adaptive water management strategies and develop supply in an incremental fashion as demand warrants it. For example, if a given level of service cannot be reliably met with the existing system at a future time t, an incremental water supply project would come online to bring the required reliability level up but no more.     

Residential Demand for Water in the Chicago Metropolitan Area1

Mieno, Taro and John B. Braden, 2011. Residential Demand for Water in the Chicago Metropolitan Area. Journal of the American Water Resources Association (JAWRA) 47(4):713‐723. DOI: 10.1111/j.1752‐1688.2011.00536.x Abstract: This paper provides the first contemporary analysis of residential water demand in humid Northeastern Illinois, in the vicinity of Chicago, and explores seasonal and income‐based differentials in the responsiveness of water use to water prices. Using a panel of system‐level data for eight water systems and controlling for seasons, weather, incomes, and community characteristics, the analysis yields low estimates of price elasticity of demand for water in line with other studies. Furthermore, price response is greater in summer and less in higher income communities. We suggest that use of seasonal pricing can help mitigate equity issues arising from differential income elasticities while taking advantage of the greater price responsiveness of summertime water use.     

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.     

CONSERVATION PRACTICES AND ATTITUDES AMONG MARYLAND WATER SUPPLY MANAGERS1

ABSTRACT: In addition to offsetting water supply shortages, water conservation is recognized as serving many purposes, ranging from reduced energy consumption to lower capital costs. Since the discussion of these benefits has been a recent development and has generally excluded local water supply managers, a question arises as to whether supply managers are implementing conservation programs to exploit these benefits. A survey of the managers at 35 Maryland water utilities provides insight into the prevailing attitude toward conservation in a water rich eastern state. The results indicate that most managers continue to view conservation only as a short term response to temporary supply shortages. Only 12 Maryland utilities have undertaken any form of water conservation activity and just two systems have ongoing, comprehensive conservation programs. Institutional, perceptual, economic, political, and time constraints all contribute to the managers’attitudes and general inaction. If water conservation is to be widely practiced, these issues must be addressed and the benefits attributed to conservation must be better documented and articulated to supply managers.