Water Rates Counter-Intuitively Will Go Up If We Conserve Water

water-rate-iconThere was a very nice letter to the editor in the Enterprise that argued that costs of water will encourage conservation.

Writes Chris Lambert of Davis, “The negative reactions so far to the Sacramento River water project are a perfect illustration of the Tragedy of the Commons. We are depleting at least two shared resources: the groundwater basin, and the health of downstream aquatic life. This is the inevitable result of too many water users and a limited supply.”

Mr. Lambert continues, “We could, of course, use much less water, if the Commons could agree on a few things. The city could allow composting toilets, graywater use, rainwater collection. It could prohibit lawns, car washing, swimming pools and any new housing construction. All of these done together might cut the pumping enough to allow for groundwater recharge.”

But tragically he concludes, “We won’t be able to agree on doing it.”

He writes, “So I think tripling the water bill might be just the perfect solution, in several ways. It’ll get us a second, better source of clean water, and prod all of us to be more careful with it. I’m aware that some of us will have a hard time with the increased cost, and the city should look into financing a relief program for those people. However, this seems to be a clear case of choosing the essential thing, and letting go of what isn’t.”

Sounds good, right?

But he is wrong.  As we have noted for a couple of years now, conservation always sounds like the right thing to do and it is in fact the right thing to do.  However, what it won’t do is lower the costs of water, because those are fixed capital costs. 

The project will be built and it will cost a certain amount.  Our rates are going up to pay for that cost.  That cost is fixed.  That means it does not matter how much water we collectively use, the costs will be the same.

Now, on an individual level you could reduce your usage and if your neighbors do not reduce theirs, then you could save some money. 

But Bob Dunning has it right.  He writes, “If they triple our water rates to pay for this new ‘system’ to bring us liquid refreshments from the Sacramento River, the logical assumption is that some of us will begin to dramatically conserve water,” adding, “Actually, most of us probably will do so … some will tear out lawns and put in rocks and cacti … others will let landscaping die … some will even stop showering and flushing and brushing their teeth …”

However, as he notes, “All of which is well and good if the goal of the rate increase is water conservation, which it isn’t … given that the rate increases are based on current consumption, what’s going to happen when we all cut our water use? … you’re right, the resulting revenue shortfall will cause yet another rate increase …”

He doesn’t explain it correctly but that is fine.  His point is correct.  Conservation will not work.

What the city should have done is work on conservation for the past ten years, save money by banking a rate hike, and then putting forth a smaller and less costly version of this plan.

Unfortunately, that would have required foresight and leadership, something this city has woefully lacked for at least the last decade.  So no matter how much you conserve, your rates will go up unless you do something to stop the project.

—David M. Greenwald reporting

Author

  • David Greenwald

    Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

    View all posts

Categories:

Budget/Fiscal

11 comments

  1. Actually – Conservation WILL work. It WILL conserve water.

    But you are correct when you say this City has failed miserably in encouraging water conservation.

  2. Where is the water to be conserved ? If we don’t use it, it flows to the ocean . Is there a dam or reservoir downstream of Oroville of which I am unaware ? ” Water conservation ” is a myth propagated by politicians and promoters to divert attention from the real problem of industrial and agricultural users’ waste and pollution . Once again the public is offered only the stick, there ain’t no carrot !

  3. [quote]Conservation will not work.[/quote]

    I believe this is NOT CORRECT. Water conservation may not save on the capital costs of the surface water project – but it is supposed to cut down on the costs of the wastewater treatment plant upgrade by $100 million if all goes well. That is my understanding.

    [quote]What the city should have done is work on conservation for the past ten years, save money by banking a rate hike, and then putting forth a smaller and less costly version of this plan.[/quote]

    The reason the money was not “banked” earlier is bc there was vehement disagreement over what was best to do. The surface water project decision wasn’t finalized until recently. Hence water rate increases were not possible until now because the actual project and its cost was not known…

    “Smaller and less costly version of the project”? And exactly what would that look like/be?

  4. If water supplies are ample in Northern California, it should not be necessary for gardeners to conserve water. During drought years, conservation can be called for. With surface supplies augmented with ground water, cities on this side of the Yolo Causeway will be in better shape than those that rely exclusively on one or the other. Compare Fairfield and Vacaville to East Bay MUD in terms of their ability to sustain a 4 to 6 year drought, for example.
    I am unaware of any “smaller and less costly” water project.

  5. D. Greenwald: [b]”But [u]he is wrong[/u]. As we have noted for a couple of years now, conservation always sounds like the right thing to do and it is in fact the right thing to do. However, what it won’t do is lower the costs of water, because those are fixed capital costs.”[/b]

    Chris Lambert is wrong? You seem to think he said that this project will “lower the cost of water.” Where did he say that? He never even implied it, let alone said it. In fact, he conceded it will be much more expensive, so he advocates a relief program for lower income residents.

    Your larger point, nonetheless, is correct: tripling the rates will at once greatly encourage conservation; but conservation across the board will require the rates to go up such that the revenues are high enough to match the fixed costs.

    As you know, I wrote that a long time ago. Let me quote from a comment I posted on May 26 on the Vanguard ([url]https://davisvanguard.org/index.php?option=com_content&view=article&id=4390:commentary-water-rate-hikes-mean-city-and-taxpayers-will-have-to-meet-reality-soon&catid=58:budgetfiscal&Itemid=79[/url]):

    [i]”I have to think that one likely reaction among a large percentage of homeowners in Davis over the next few years will be a large cutback in landscape irrigation. I am aware of the fact that that is one of the goals of the new water district–that we use a lot less water.

    “However, there is a bit of a beggar-thy-neighbor aspect to cutting back on water usage. If everyone does it, the rates will have to go up even more in order for the water district to raise enough money to pay off their capital expenses. So for awhile it will be a struggle for everyone to rip out their lawns and rid their yards of all but native plants. Having a vegetable garden will become an unbearable expense for many in Davis.”[/i]

  6. One of the sad ironies is that when our water/sewer/garbage bills start to reflect the cost of the surface water project, the annual bill will average about $2,300 a year for a single-family house (according to staff estimate). This will mean that almost everyone will be aggressively conserving. Low income people and people on fixed incomes will be at a relative disadvantage compared to today.

    In other words, today low-income people can choose to conserve more than their neighbors and save money. If the neighbors are doing to same thing, the low-income persons’ relative costs will go up, since the total fee collected city-wide will have to remain the same to cover the fixed cost. Since their is a lower bound to how much water people can save, the those with low income will not have much ability to lower their water bills through their own efforts.

  7. Corrected sentence: Since there is a lower bound to how much water people can save, those with low income will not have much ability to lower their water bills through their own efforts.

  8. E. Roberts Musser: There is in fact the ability to save money by scaling back to project and also by refraining from purchasing more summer water.

    The current reworking of salinity requirements by the WRCB could also give us more flexibility.

    Our deep aquifer water is safe, and it is not clear at this time that we will need the surface water to meet legal discharge requirements.

    The issue is one of long-term supply of our deep aquifer water (and preference for softer water for those who can afford the luxury). As Chris Lambert said, and as I also said in today’s Enterprise, we don’t know the amount of water in the aquifer or the recharge rate. We never did the level of study of the deep aquifer that we could have done (this is an opinion I am relaying from one of our preeminent groundwater experts). With conservation that would come from a rate structure that rewards it, the deep aquifer supply could last a hundred years — or not.

    The surface water project is a very expensive insurance policy for a very important resource. Pushed forward during a deep recessionary era, it could also have profoundly serious economic repercussions.

  9. Here is a link to my Enterprise forum piece today:

    [url]http://www.davisenterprise.com/opinion/get-real-on-water-risksbenefits/[/url]

  10. [quote]We never did the level of study of the deep aquifer that we could have done (this is an opinion I am relaying from one of our preeminent groundwater experts). With conservation that would come from a rate structure that rewards it, the deep aquifer supply could last a hundred years — or not. [/quote]

    So who is this groundwater expert? Would s/he be willing to come to the City Council, and discuss the issue?

    It “could last a hundred years — or not”. What if it doesn’t, what then? Any contingency plans for that eventuality?

    [quote]The surface water project is a very expensive insurance policy for a very important resource. Pushed forward during a deep recessionary era, it could also have profoundly serious economic repercussions. [/quote]

    Is it not possible not doing the project now could have serious repercussions?

Leave a Comment