12 April 2010

Hail Rob Davis!

He's got another excellent article on water prices, supply and subsidies in San Diego (via DW).

Many businesses buy reclaimed water, which is a good because it reduces demand for fresh water. The trouble is that they pay 78% less for that water, when the industry standard is 10% less. How about they pay more, and residential water customers pay less?

1 comment:

The Outsider said...

Unsurprisingly, a regulatory failure. EPA mandates a reclaimed water system, so in order to entice customers the City sells water at less than cost. If reclaimed water could be sold at cost or higher, some private entrepreneur would already have been selling it. As long as tap water is sold below cost, reclaimed water will be a bad investment.

Who is being hurt, though? Users of reclaimed water benefit because they get cheap water. Users of non-reclaimed water benefit because of reduced demand. Your complaint seems to boil down to the fact that the City is not collecting as much revenue as it could from the evil, corporate water users.