The Georgia Public Policy Foundation suggests tiered pricing as a long term solution to their water problems.
Worse, water restrictions can harm conservation efforts by considerably reducing revenue to utilities and local governments, forcing rate hikes or shrinking funding opportunities for growth, maintenance and improvement of aging systems. Repairs and maintenance are a serious concern: Earlier this year, Baldwin in northeast Georgia revealed it loses half the water it buys before the water reaches customers. A leak-detection specialist said the city is just one of 54,000 water providers across the country experiencing high amounts of water loss – and that the loss is typical for North Georgia. The Environmental Protection Division’s goal is a maximum of 10 percent of water unaccounted for; utilities need the revenue to meet the goal.
Worst, Georgia’s mandated water restrictions make a mockery of conservation by offering so many exemptions that they pick only the lowest-hanging fruit: the hapless homeowner. Georgia’s conservation campaign includes a long-term public awareness program to reinforce the sought-after culture of conservation, and perhaps that will work. But nothing is more certain to promote efficiency among homeowners, business and water providers like an appropriate pricing structure will.
Appropriate pricing means eliminating flat rates for water use and encouraging the use of separate meters on every unit in Georgia’s apartment complexes. Of the 21 percent of Georgians who live in multi-family structures, many pay a flat rate to landlords, or utilities are included in the rent. Now that the federal government has lifted the regulatory burden surrounding sub-metering, landlords will find it easier to install meters to bill tenants for the water they use, and tenants will become conscious of the value of water and the price of excess.
Dynamic rates, which usually reflect seasonal supply and demand, also encourage customers to weigh their priorities. Long hot bath or shower? Sprinkler or soaker hose? New pond or xeriscaping?
In Georgia, one of the few water providers that come closest to an appropriate pricing structure is the Cobb County-Marietta Water Authority, which establishes a customer’s average water use at 125 percent of winter usage. Customers face a surcharge of 90 cents per 1,000 gallons in excess of the average; the excess is assumed to be used in outdoor watering. Cobb County and its cities and Gwinnett and Cherokee counties have implemented these summer surcharges.
Tiered rates don’t harm an average user; they motivate customers to use water more efficiently, and they bring home the value of the resource by charging more for excessive use. They delay the need for immediate utility expansions. Best of all, they allow utilities to recover the cost of providing services and adequately fund a business plan for the infrastructure maintenance, capacity expansion and upgrades required by aging, growing systems. Cobb’s good business plan is reflected in the fact that it has met the EPD goal of 10 percent of water unaccounted for.
The market approach is successful without being punitive. A 1999 survey of 12 utilities using a conservation rate structure revealed that yearly average consumption dipped 8 percent and peak-demand-month usage declined 7 percent.
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