karen guz director / conservation conservation conundrum; saving water & collecting revenue...
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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
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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
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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 [email protected]
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