20 Jan 2009

Something Outrageous

Pat Mulroy, of the Southern Nevada Water Authority, is worried about her region's water supplies.

"Mark my words," she continues, "unless we do something considered outrageous by today's standards, the West is going to run dry."

Las Vegas gets to withdraw another gallon from Lake Mead for every gallon it dumps in as treated wastewater. Therefore, her focus has been outdoors, where she has tried many different ways to reduce water use. Some worked, and some did not (outlawing car washing and fountains). But when I asked her about pricing, she seemed to indicate they were doing what they could on that front too. I disagree.

The first tier water price in Vegas is $.87 per HCF for the first 6.7 HCF (5000 gallons). Their next tier doubles that, which is still less than the major California urban areas charge: LA charges close to $3 per HCF for the first 13 HCF (step point is variable depending on household characteristics), Berkeley and San Francisco closer to $2.

Bottom Line:
She may want to try something outrageous (meaning pipelines) but perhaps charging more than $.87/HCF is a better option.