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How Conservation Helps Keep Water Costs Down

Water rates may be rising in some places, but new research shows that they don’t rise as much with conservation, says Mary Ann Dickinson of the Alliance for Water Efficiency.

Written by Mary Ann Dickinson Published on Read time Approx. 3 minutes
A sign alerts visitors to water conservation efforts at the state capitol in Sacramento, Calif., in July 2014.AP/Rich Pedroncelli, File

By many accounts, California’s efforts to manage the strains placed on its water supplies by the recent and unprecedented five-year drought can be considered an unqualified success. Urban water agencies stepped up to meet the challenge posed by a bold state order: Reduce use by 25 percent. Their creative approaches and sustained efforts helped avoid significant damage to local economies and community well-being throughout the state.

But success did not come without pain. As mandates piled up and water use plummeted, some water agencies found themselves struggling to cover operating costs, let alone pay for mounting infrastructure expenses. Many agencies adjusted rates to deal with this new reality and found themselves facing ratepayer rebellion. Conservation was frequently pinpointed as the culprit.

A simple question fueled much of the customer frustration: “Why am I paying more for using less?”

Efforts to answer this question have often omitted a critical point: Although water rates will continue to rise over time, conservation will help keep those rates as low as possible.

How does this happen? The costs of updating aging water systems and investing in new technologies are the primary drivers of most rate increases. Using less water keeps those costs down over time. By stretching the lifespan of supply sources, water agencies can avoid or delay the costs of securing new supplies; building and maintaining new infrastructure; and treating more water and wastewater. Those savings are passed on to customers.

The question that should drive conversation is not, “Why am I paying more for using less?” but rather “How much more would I be paying without conservation?”

The Alliance for Water Efficiency recently worked with communities in Arizona and Colorado to answer this question.

The answer is straightforward. Rates may be rising, but they don’t rise nearly as much with conservation. In Tucson, 30 years of conservation reduced per-person-per-day use from 188 gallons to 130 gallons. Without this reduction, Tucson would have needed to invest $350 million in new infrastructure to deliver and treat more water and wastewater. Because these costs were avoided, rates are at least 11.7 percent lower today, and customers save an average of $112 annually on their water bills.

In Gilbert, Arizona, two decades of water conservation have brought water use down by 29 percent from 244 gallons to 173 gallons per person per day. Gilbert and its ratepayers have avoided just under $341 million in water and wastewater treatment expenses. Thanks to conservation, Gilbert customers pay rates that are 5.8 percent lower than they would be without conservation.

A 2013 analysis revealed that residents of Westminster, Colorado, also reaped significant benefits from more than 30 years of conservation. Because the community conserved, a single-family household’s average bill in 2012 was 47 percent lower than it would have been – a saving of $596 per year.

Conservation doesn’t only keep rates lower for existing customers; it can help make communities a more attractive place to move or build a business. The development fee for a single family residential unit to join Gilbert’s water and wastewater system is 45 percent lower today – a saving of $7,700 for each new homeowner – thanks to conservation. In Westminster, development fees in 2012 were 44 percent less than they would have been.

These findings are good news for Californians, since water professionals and regulators agree that it’s time to double down on commitments to conservation and efficiency. In the face of population growth and potential future droughts, California’s State Water Resources Control Board is embarking on an ambitious endeavor to make water conservation a way of life. And for many of California’s neighbors – such as Arizona, where Lake Mead is being drained faster than it can be replenished – conservation is a cost-effective, no-regrets strategy to avoid future shortages.

Successful sustainable water management and drought preparedness will clearly require more than creative conservation programs.

Water rates will continue to rise as communities catch up on needed improvements and ready their systems for the future. Technical solutions – such as regular rate evaluations and probability management techniques to plan for prolonged conservation and multiyear droughts – can help reduce the need for double-digit rate increases. Agencies are also beginning to pioneer innovative rate designs that can better balance revenue stability and conservation objectives – while keeping rates affordable and fair.

But transparent communications to customers will be just as, if not more, important. Future droughts will require even more savings in urban areas. Helping customers understand that conservation is a win-win for both utility finances and customer wallets will help get them on board with efficient plumbing fixtures and drought-tolerant landscapes.

Let’s start changing the conversation on conservation before the next drought comes along, and build an understanding that when it comes to water and money – when everyone conserves, everyone saves.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Water Deeply.

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