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How much should a public utility charge for water? The
Denver Water Board (I know, that outfit currently prefers
to be known as Denver Water,
but I spent several of
my formative years practicing journalism in Grand and
Summit counties on the Western Slope, where it was known as
the @#$! Denver *@#! Water !%*@ Board,
and such
habits persist) is currently grappling with that question,
and there's no simple answer.
In theory, we have a market economy, and that works for bottled water. You have a choice that ranges from Sam's Club to San Pellegrino, and the price is determined by supply and demand.
But utility water is different. The utility company is usually a publicly owned monopoly, and it can't operate like a private company which wants only to maximize its profits. Further, water pricing isn't just an economic matter; it's also a social and environmental issue.
I can see that any time I walk around Salida. When I moved here, there were no water meters or watering restrictions. You paid a flat rate and watered as much as you wanted, whenever you wanted.
After a quarter-century of progress,
we now have
meters and restrictions, and water rates have roughly
quintupled. This is not a rich town (our median household
income is about 60 percent of the state-wide figure). When
water costs more, many people scrimp.
One result is a lot of dead or removed trees that used to shade the sidewalks, thereby encouraging driving by making walking less attractive. I hate to think that there are environmentalists who promote gasoline consumption, but that's one result of raising water prices so that people will consume less.
Some householders have installed attractive xeriscapes. But they're a minority. Many others just let their property go to dirt and weeds, and even that is more attractive than spreading cobbles across the yard for a landscape that you can neither walk over nor admire.
Oh, but they're saving water. The question that never
gets asked is Saving water for what?
As nearly as I
can tell, the more water we save, the more is available for
new subdivisions, strip malls and other threats to our
quality of life. Further, the more that people must spend
for water, the less they have for other things, like
feeding their children.
So raising rates to discourage water consumption means more people coming, and less money for those who already live here. It can lead to more rate increases.
That's because the capital costs of facilities for collecting, storing, transporting, treating and delivering the water don't change measurably just because you use less. It just means that those costs get spread across fewer delivered gallons, and so your reward for saving water is a rate increase.
Electric utilities often consider both factors -- the
cost of power and the capital costs for facilities -- when
they quote prices for big customers. There's a set
demand charge
for capital costs, and a use
charge
based on power consumed. And you really get hit
on the bill if you exceed the demand you agreed to.
Something like that would make sense for water, too, but bills could get a lot more complicated. Western Resource Advocates, a Boulder think-tank, last week proposed a simplified version that might be made to work.
One problem, though, is that with water meters like mine (made to be read by a drive-by electronic device), there's no easy way for customers to read it, and thus no simple way to know how much water I'm using and adjust consumption appropriately.
Another problem extends throughout the state. Agriculture uses about 85 percent of Colorado's water, yet contributes less than 5 percent to the state's economic output. If it's important to reduce water consumption, then maybe we should start where the most water is consumed, instead of killing more urban trees.
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