Tag Archives: water rates

2017 New Year’s Resolution: Invest in Water Quality to Invest in Your Health

By Trisha Oeth, Commission Administrator, the Colorado Department of Public Health and Environment’s Water Quality Control Commission
The views represented are those held by the author and do not necessarily represent those of the Colorado Department of Public Health and Environment or the Colorado Water Quality Control Commission. 

 

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Credit: Ondrejk, Wikimedia Commons

It’s that time of year again—time for making New Year’s resolutions. Many of our resolutions will involve personal health or investment goals for 2017. But are you tired of setting weight-loss or money-saving goals? This year, consider investing in water quality as an investment in your own and your family’s health.

Safe and readily available water is one of the most vital components of our health. We have already seen our watersheds affected by major floods and wildfires. As climate change occurs and population doubles in Colorado, our waters will come under more pressures. We need to create resilient watersheds that can handle these pressures to avoid catastrophic conditions in our water. Watersheds that support strong ecosystems will produce the ecological diversity integral to our food chain and plants and minerals that someday could be used in medicines.

Water also is fundamental to our mental health. Studies show humans’ mental health improves with time near water. Set a goal this year to stroll on a path along a stream once a week and reflect on the soothing sound of the water. Imagine being connected to the source of our water and where it goes when we flush our toilets, wash our cars and water our lawns. Being connected in this way reminds us about the importance of investing in water, the essence of our existence.

Most of us understand that water is a basic necessity in our lives. We all want clean and safe water in our taps and in our streams. And yet, do any of us know how much we are paying our local utilities to ensure protection of this resource? When was the last time we readily and voluntarily agreed to increase our investment? None of us like increasing costs, but an increase in our water utility bill is not just a rate increase. It’s a proactive step to invest in our health. We know our water and wastewater infrastructure is aging. Reports show if we don’t start investing now, by 2040 we will have a $152 billion funding gap for needed infrastructure. This year, consider changing that trend and instead stand behind your utility when it proposes a rate increase.

The challenges that utilities face are immense. Utilities can use increased funds to protect our water at its source, replace aging pipes that deliver water to our homes, and upgrade treatment processes to keep up with current science and technology. Imagine if we all took the money we might routinely spend on two sugary beverages a month and instead invested it in water quality. Imagine if businesses that provide charitable donations or hold fundraisers directed that money to water quality. Imagine the possible replacement of lead-laden pipes and the removal of arsenic and other metals. Imagine algae-free streams and rivers available for swimming and fishing. Check in with your local utility or watershed group to see what work needs to be done in your area. Maybe it’s aging pipes, stream bank restoration or an upgrade to a water treatment plant. Then ask how you can get involved.

As you are reflecting on the past year and embarking on another, ask yourself how much it is worth to turn on your tap at home and know the water will be good for your health. This New Year, how much are you willing to invest in your and your family’s health?

OLYMPUS DIGITAL CAMERATrisha Oeth is the Administrator for the Colorado Department of Public Health and Environment’s Colorado Water Quality Control Commission. In that role she provides policy advice and analysis regarding rules, regulations, and policy priorities on all aspects of water quality programs in Colorado. She began working on water quality issues after graduating from CU Law School, and practiced law in the private and public sector. In her free time Trisha enjoys trail running, cooking with her husband and daughters, and learning piano.

hw_fall_2016_final_coverRead more about water and public health in the new issue of CFWE’s Headwaters magazine available here.

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Valuing Water

When we don’t witness water treatment plants in action, infrastructure being maintained and the sale and trade of water rights, it can be easy to forget that the cost of water involves more than our personal usage wrapped up neatly in a monthly bill. In reality, what we pay each month may not appropriately reflect the true cost of water. As Colorado’s population grows, the demand on already limited water resources will rise and the cost of water will likely increase—with higher totals often transferred to your water bill.

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Colorado Springs  Credit: Jasen Miller

Beginning Jan. 1, water rates will increase in some towns and cities around the state ̶ including Aurora, Colorado Springs, Denver and Louisville. Depending on where you live, and how your water bill is broken down, utilities may use those monies for standard water treatment and delivery costs, conservation and education programming, infrastructure construction and maintenance, upgraded treatment systems, or even securing new water supplies. Read more about why Denver Water bills are increasing in this new post on Mile High Water Talk.

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Charles Howe. Credit: Maeve Conran

“As water becomes increasingly scarce, prices are going to go up,” says Charles Howe  professor emeritus in the Department of Economics, Institute of Behavioral Science at the University of Colorado, Boulder. Howe joined KGNU’s Maeve Conran for an interview to discuss economics and the value of water on Connecting the Drops, our collaborative radio series between CFWE and Rocky Mountain Community Radio stations.

“Any new [water] use is going to face increasing prices,” Howe says. This is seen in the trade of water rights and reflected in users’ water rates. For water providers and town councils setting rates, the need to stretch scarce water supplies among multiple users and valuable uses increases the necessity of efficient water use and higher levels of conservation. Rates can be an effective tool for encouraging water conservation.

“It is very well established that users are sensitive to water prices. We know that as prices go up, users of every class do reduce use,” Howe says. “They gauge their usage of water so that they are not dumping costly water onto low value uses.”

How can rates encourage conservation? Conservation water rates send a price signal to customers to conserve—a variety of rate structures can accomplish this or can be mixed and combined. Many municipalities including Aurora, Colorado Springs, Denver, Durango, Fort Collins, Grand Junction, Steamboat Springs, Vail, Walsenburg and Westminster use some form of tiered or increasing rate structure. In a tiered or increasing rate structure system, cost to the user increases in steps and is dependent on the amount of water used. Lower pricing steps exist because low-income customers and small households cannot afford to pay high prices for essential water usage. As use increases, price increases per thousand gallons of water used. Very high volume users—whether households, industry, or businesses—are charged the highest prices because their demand determines the peak capacity of the system.

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Denver Water  Credit: Jeffrey Beall

In Denver, the pricing structure moved from a four tier to a three tier system in which anything beyond “essential” use sees a significant increase in price. This, Howe notes, is a mechanism for encouraging conservation. Although prices are on the rise, Howe is of the mindset that municipalities are not charging enough to urban users. An increase of $25-30 per month would better reflect the value of the raw water that is being treated and distributed to the average urban customer, he says. Howe suggests that attention should also be focused on large-volume users in the commercial sector. They can be motivated to conserve water through increased pricing, therefore placing an appropriate value on the amount of water that they are actually using, he says.

hw_summer_coverwebListen to the full interview here and read more about the economics of water in the Summer 2016 issue of Headwaters magazine “Accounting for Water.” Check out the following articles for more information on the value of our most precious resource: A Price for the Priceless and Paying for What’s Ahead.

Not a Headwaters subscriber? Sign up here, or visit yourwatercolorado.org for the digital version. Headwaters is the flagship publication of the Colorado Foundation for Water Education and covers current events, trends and opportunities in Colorado water.

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Interested in water conservation and efficiency? Order your copy of CFWE’s Citizen’s Guide to Colorado Water Conservation for information on efficiency water use in homes and cities, in commerce and industry, and in agriculture.

 

 

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Water Rates: New Financial Sustainability Tool and Webinar

uncdashboardThe cost of everything has increased- movie tickets, food,  and of course water rates– making the cost of water a source of contention from time to time. Still, people don’t always realize how much is factored into water rates. From the Winter 2013 issue of Headwaters magazine, Chris Woodka writes about the Art and Science of Pricing Water:

Today, both the treatment of Colorado’s water and the price structure are far more sophisticated. Just as there is a science to treating water to meet standards for health and safety, the pricing of water is closely studied.

That’s why the Environmental Finance Center at the University of North Carolina developed the Colorado Dashboard, an online interactive tool that helps municipal and special district water and wastewater utility operators as well as policymakers, researchers, citizens and others find the information they factor into  rate setting. Users can virtually adjust water rates and see how that impacts water bills, conservation and affordability.  It’s interesting– give it a try.

This new dashboard uses data from a survey conducted by the Colorado Municipal League and Special District Association of Colorado and represents 112 municipal and special district drinking water and/or wastewater utilities in Colorado so users can easily look into:

  •  Bill Comparisons: How does the chosen bill compare to others in the selected comparison group?
  • Conservation Signals: How strong or weak a price signal is being sent to residential customers at higher ranges of use (the price increase from 10,000 to 11,000 gallons per month)?
  • Affordability: For a chosen residential bill, what percentage of median household income (MHI) does it represent? (See more on the MHI indicator in this recent blog post.)

Interested? Check out this blog post and Learn more about the Colorado dashboard and financial sustainability metrics for water systems through the Environmental Finance Center’s free webinar on August 30 from 12-1 pm. Click here to learn more about the training and to Register now!
Woodka explored some of those differences between utilities’ rates in his Headwaters article:

Every system is unique, and every utility has some sort of rate structure that takes into account the cost to buy water, treat it, pump it and maintain the infrastructure that delivers potable water to consumers’ taps…

The American Water Works Association provides guidelines for utilities in setting water rates, but more depends on the boards that govern cities, utilities or water districts and the nature of water systems. A developed water system with few capital costs likely will be able to keep its rates on a steady plane, while growing communities have to develop strategies that avoid rate shock while paying the bills.

Costs for water might depend on source of supply and whether the water comes from a system owned and maintained by the utility or  purchased from another provider. If new, permanent water supplies must be acquired, the relative seniority and resulting dependability of the water rights also affects cost. In addition, some special districts rely more heavily on property taxes, particularly for capital improvements, which can offset the need for higher customer charges. But this diminishes flexibility—certain constitutional limits apply to property taxes but not service fees. Water bills may also include sewer and stormwater charges.

Beyond those factors, a growing community might require new users to foot the bills. “In simple terms, you’ve built it before they come,” says Rick Giardina of Red Oak Consulting, which assists hundreds of wa-ter utilities across the country with setting rates and other operational issues. Utilities build the cost of new service into one-time, up-front tap fees—virtually invisible charges included in the price of a new home or business. If those fees are set too low, existing customers could wind up footing a larger bill than necessary.

Social considerations also come into play when structuring rates. Some utilities might subsidize a minimum level of consumption to keep the price affordable for those least able to pay. Such an “essential use allowance” is typically based on the amount of water an average household would use for indoor use only. Similarly, a utility could delegate a portion of its revenue toward a payment assistance program.

A community might also use rates to attract large commercial users, charging them lower rates while asking residential customers to make up the difference; the benefit could be realized through economic development and an increase in the local tax base.

The rate structure could also be used to promote other social goals such as lowimpact development or green infrastructure that conserves water, says Giardina. “In the work we do, the first question we’re asked is ‘How do we compare with others?’ But without peeling back the layers of the onion, there are so many variables.”

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