karen guz director / conservation conservation conundrum; saving water & collecting revenue...

Karen GuzDirector / Conservation

Conservation Conundrum;Saving Water & Collecting Revenue

January, 2015

Customer Profiles by Program

January, 2015

Conservation ConundrumPage 2

Conservation = Lower Long-Term RatesWater rates reduced by avoided new supplies

January, 2015

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Conservation = Lower Long Term RatesSewer capacity is extremely expensive

January, 2015

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Good News: Conservation Works!8% Municipal water use reduction across Texas in ten years

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Bad News: Price of Water Will Go Up

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Downward Use: What’s Going On?Many reasons point to continued reduction in water use

Water use will continue to decline everywhere. It will decline faster with active water conservation programs.

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Why Will Water Cost More?

• Fixed Costs Going Up; labor, material, fuel• New Water Supplies Expensive• Aging Sewer Infrastructure Costs• Aging Water Infrastructure Maintenance• Water quality and environmental expectations

Nothing is getting cheaper over time

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Revenue

• Average 80% of revenue from variable rates; change with weather

• Production Forecasting is NOT easy– Weather..rain and

temperature– Economy– Growth– Changing customer habits– New technology– Drought

Costs

• 80% of costs fixed; will not change as consumption drops

• During drought costs can INCREASE as sales decline

• Variable costs like fuel can be problematic

Revenue Stability Challenge

January, 2015

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Conservation Conundrum

A Unique Business ChallengeWet years = no peak sales Dry years = excessive peak sales

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Tiered inclining block rates

Water Budget Rates

Peaking capacity charge

Higher First Block Rate

Drought Surcharge

Lifeline Rate

Use more then pay more

Need estimated per site

High summer users pay

More fixed charges

Excess use drought rate

Low Income Needs

Options Come Down to PoliticsWhich technical rate option works for your community?

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Averages NOT HelpfulResidential Average Water Use 2013

– Summer : 8,500– Winter: 6,700

Residential Top 1% Water Use 2013– Summer: 32,000

Current Billing Tiers– 0 to 5,985– 5,986 to 12,717– 12,718 to 17,205– 17,206 +

June-August 2013 Bills

San Antonio Water Use Profiles

83% of customers used under 12,718 gallons/month during the hottest months

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Rate Approval = Community Process

• Water costs are going up• Conservation mitigates but

does NOT eliminate increases

• Rates Advisory Committees of customers

• Public Outreach• Constant Conversation

We all need to talk water reality MORE with EVERYONEProcess Steps Needed

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Free Water Rate Resourceshttp://www.financingsustainablewater.org

• Informative videos

• White papers

• Case studies

• Demand Forecast Model

• Resource Library

• Rates Workshops

• Case Studies

• Rates Analysis Resources

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Questions? More Information?

Karen Guzkaren.guz@saws.org

210 233-3671

SAWS Web Resources www.saws.org

http://www.saws.org/who_we_are/community/rac/http://www.saws.org/service/rates/

GardenstyleSA.com

Karen GuzDirector / Conservation

Conservation Conundrum;Saving Water & Collecting Revenue

January, 2015

Customer Profiles by Program