Upload
sybil-walters
View
227
Download
0
Tags:
Embed Size (px)
Citation preview
4. Water Pricing and Metering
2
Water use responds to changes in price
An effective water pricing is an important mechanism
of water demand management.
Water rate structure should be such that it
- generates sufficient revenue to cover costs,
- allocates costs to different types of water uses, and
- provides incentive for conservation.
In principle, there are many different rate structures
that could generate the same total revenue for a
water utility.
Water Pricing (1)
3
Water pricing levels should be such that the associated
costs are recovered to ensure a sustainable operation and
that it guards against water wastage.
So long as the water price remains low, there is no
incentive for the consumers to install water-saving devices or
technologies.
A pricing solely based on a flat rate regardless of volume
used or a system based on property value would not be
effective in water conservation.
Progressive block rates encourage conservation and
reduce waste. A proper well maintained metering
system is a pre-requisite condition for that.
Water Pricing (2)
4
Fixed monthly charge ($ x/month)
Uniform ($ y/m3)
Uniform but adjusted seasonally
Block rate
- Increasing (progressive) block rate
- decreasing block
Seasonally adjusted block rates
Water Tariff Structures
5
Pricing Structures for Water Services Source: (Prasifka, 1994)
6
Domestic Water Tariff Structures (Examples)
0
0.2
0.4
0.6
0.8
1
0 10 20 30 40 50 60
Monthly Household consumption (m3)
Tari
ff (
US
$ p
er m
3)
Hong Kong
Seoul
Taipei
Singapore
Shanghai
Source: Second Water Utilities Data Book 1997 (ADB)
7
Water Tariff Structures (as share of utilities)
Source: Water Tariffs and Subsidies in South Asia Paper 1 World Bank – UNDP Water Supply Program, December 2002
8
Source: Cavanagh et al., (2001) Muffed Price Signals: Household Water Demand Under Increasing-Block Prices.
Percent of sample utility Rate structure
1982 1987 1991 1997
Flat fee for service regardless
of volume
1 0 3 2
Uniform volumetric charge 35 32 35 33
Decreasing block 60 51 45 34
Increasing block 4 17 17 31
Total 100 100 100 100
Number of utilities in sample 90 112 145 151
US Residential Public Water Supply Rate Structures (1982-1997)
9
A universal (complete) and appropriate metering is a
basic and essential tool for successful water demand
management.
Water metering is the basis for the link between
consumption and price. It puts the burden for water
conservation to the consumers, which is the most
effective means of ensuring water conservation.
The costs of meter installation, maintenance, and
regular reading and billing need to be weighed against the
benefits in choosing pricing options to conserve water.
Water Metering (1)
10
Source: (Coe, 1978)
Economics of Meter Exchange Periods
11
Water metering can be implemented in stages
starting from the large water consumers like industry,
commercial users, high income domestic users and
others.
Well-maintained and working meters, read accurately
and regularly, followed up by efficient billing
procedures ensure that consumers do not abuse
municipal water supplies.
It has been demonstrated that regulations combined
with pricing and tariff policies have resulted in
savings ranging between 20%-30% or more.
Water Metering (2)
12
Meters that have been tampered with or are faulty
or broken are a major cause of commercial water
losses. Meters may break from excessive network
pressure, freezing temperatures or malicious
damage.
Meters may under-register consumption if water
pressure is unusually low or over-register it
because air has infiltrated the system.
Other major causes of commercial losses are
incompetence, inadequate training or corruption of
water meter readers.
Water Metering (3)
13
Outrageous water bills shock Phoenix residentsPHOENIX (USA) — Water officials said that for the last 12 years homeowners in areas around Phoenix have been underbilled, reported The Arizona Republic, a situation water officials initially tried to correct last week by sending residents large bills to make up the difference.
Hundreds of county residents should have been charged 50 percent more than Phoenix residents, according to city code. Instead, they were charged the same rate for basic water services until adjusted bills for the past three years were sent to 335 homes last week, the newspaper said.
Some bills sent to residents soared as high as $3,000, according to the paper.
Water Technology Online 4/30/2003