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Show WATER PRICING POLICY STUDY Table ES- 1 Rate Structure Evaluation Criterion Rate Structure Uniform Seasonal Drought Year Surcharges Increasing Block Ratchet Spacial Marginal Cost Goal Based Revalue Sufficiency WW + H WW + 1 w wv WW • fW Revenue/ Rate Stability WW WW WW w w w^ WW w Equity WV WW W w w VW w w Legality WW WW • 4- H ww wv WW w wv Simplicity WW + H WW w w • w V V Ease of Implementation + H W W w w w V V Water Conservation W + M ^ WW ' WW w WW w- v WW= Excellent WV- Good W= Fair • V= Poor ADMINISTRATIVE TOOLS The key to realizing any conservation through pricing policies is to effectively send a price signal to the customer that reflects the value of the commodity ( water), and allows the customer to make rational decisions regarding the consumption of that commodity based on the customer's personal valuation of the commodity. There are a number of administrative tools available to the utility that will assist the customer in making rational decisions. Without the use of some ( if not all) of these tools, no rate structure will effectively promote conservation. Metering The first requirement in implementing a pricing system that successfully sends a price signal to the customer is the ability to measure the quantity of water used by the customer. Water can not be priced on a per unit basis unless it is metered. If water is not priced on a per unit basis, price will not affect consumption. The California Department of Water Resources estimates that demand can be reduced from 20 to 45 percent simply by metering due to the sudden correlation between the bill and consumption. 6 Most utilities in the CUWCD service area meter their customers' consumption. Metering issues to be resolved include the metering of outdoor use on dual water systems and the frequency of meter reading by utilities. 6 State of California, Department of Water Resources. Water Conservation Guidebook No. 9: Guidebook on Conservation- Oriented Water Rates. Department of Water Resources, Office of Water Conservation. October, 1988. Page 11. Executive Summary ES- 24 |