20 May 2009

Aguanomic Metering

A reader asks:
  1. What is your opinion on the billing structure for the other “classes” business/government, irrigation users (same treated water used in a separate meter for home owner associations, outdoor irrigation for strip malls, freeway irrigation), residential, and multi-use?

  2. Do you believe that water should be charged differently amongst classes and different base rate cost per unit of water (commodity rate)? Or should the water cost the same based on what it costs to purchase/treat/deliver etc.?

  3. Should the classes be looked at separately and independently, thus, if each class is asked to reduce a different amount of water (estimated reduction) than the cost per unit is determined and would vary. Do you concur with this type of evaluation?
These questions give me the chance to clarify how things I repeat here and there fit together.

First, I think that residential water should be priced with increasing block rates that are "wide" based on the number of people in the household.

Second, I think that multi-family residences should have sub-meters.

Third, I think that non-residential customers should ALL be treated the same. Their meter rates should have HIGH fixed costs (to encourage them to adopt the smallest meter size) and increasing block rates within each meter class. The larger the meter, the larger the initial cheap block of water, but the next block is ALWAYS much more expensive.

My inspiration for prices is that they should be cheap where "human rights" are concerned (residential rates). All other rates should recover costs AND be high enough to choke demand (so there's no shortage).

Finally, rate increases should occur at the highest blocks first. After that, I'd narrow blocks before I'd raise rates in the earlier blocks.

Bottom Line: Prices should be FAIR for the basic unit(s) of human right water. After that, commodity water should have similar prices to all comers.